HOUSTON — At a time when the surge in U.S. onshore shale production is getting a lot of headlines, leaders of the energy industry will turn their attention seaward this week in Houston.
Domestic offshore production is set for a surge of its own, and that will be part of the buzz as more than 90,000 executives, scientists, engineers and others converge on NRG Park through Thursday for the annual Offshore Technology Conference.
Four years after a massive oil spill and a resulting partial drilling moratorium slowed things down,
large development projects in deep and ultradeep Gulf waters have come online. Gulf production is expected to increase 35 percent to a record 1.9 million barrels per day by 2016, according to analysts at Wood MacKenzie.
“The offshore industry is alive and well — and growing,” said Ed Stokes, marine project manager at ConocoPhillips and chairman of the OTC, now in its 45th year.
That doesn’t mean the seas are completely smooth.
Offshore challenges
Some offshore projects beyond the Gulf have struggled.
Shell has put its offshore work in Alaska’s Arctic on hiatus. North Sea production declines continue yearly.
And the consortium developing Kazakhstan’s Kashagan field recently announced another major setback.
“The cost for project implementation is going up,” Stokes said. “The problem is the oil price is not going up with it. Companies have an amount of money to spend, and they’re going to spend it the most effective way they can.”
The compression in capital spending, and what it means for the offshore sector, is among the hot topics on the OTC’s extensive agenda this year.
Other areas of focus include how the industry can improve safety; the biggest projects in the industry pipeline; and what types of technology hold the most promise.
Ramanan Krishnamoorti, a University of Houston petroleum engineering professor who leads the school’s energy initiatives, will tout the university’s new graduate certificate program in upstream safety at the conference. The school views OTC as a prime opportunity to target the offshore workforce.
“We talked to a lot of industry folks,” Krishnamoorti said. “They told us (safety) has become a real critical challenge for them in various places.”
Conference features
Last year, the conference at NRG Park, then called Reliant Park,
drew more than 104,000 attendees from some 130 countries, according to event organizers. In addition to high-level policy talks and technical panels on topics such as down-hole sensing, pipe technology and well capping, attendees strolling 650,000 square feet of exhibition space will encounter more than 2,700 vendors and suppliers hawking their offerings — and no doubt their swag as well.
Among the big-name speakers at this year’s event are John Mingé, BP America’s president, who speaks Monday morning about the country’s changing energy landscape as oil imports are falling and liquefied natural gas exports — unheard-of before the surge in conventional production from dense rock — are poised to increase.
Return to the Gulf: BP builds its largest-ever Gulf of Mexico fleet
Marathon Oil CEO Lee Tillman joins a panel of energy-sector executives that afternoon to discuss how the unconventional revolution is affecting the offshore business. In particular, the panel will examine how the two compete for talent, investment and technology.
On Tuesday morning, attendees will get the Washington perspective from U.S. Rep. Bill Flores, R-Bryan, a member of the House Committee on Natural Resources, and Christopher Smith, principal deputy assistant secretary for fossil energy. That afternoon, Brian Salerno, who leads the Bureau of Safety and Environmental Enforcement, will join Smith to discuss federal oversight of the industry.
General Electric Chairman Jeff Immelt addresses attendees Wednesday. He’s slated to highlight the industry’s need to invest in education and research and development. GE made waves in the energy sector following an announcement earlier this year that it plans to spend an additional $10 billion through 2020 on “ecomagination” projects such as its collaboration with Statoil to evaluate the potential for carbon dioxide to replace water in hydraulic fracturing.
Many speakers from abroad join the lineup, including Michael Fallon, the UK’s Minister of State for Business and Energy, who will discuss what declining production in the North Sea means for his country and what can be done to stimulate production in the future.
Gustavo Hernández Garcia, head of exploration and production at Petróleos Mexicanos, or Pemex, will attend several sessions throughout the week as well.
