Hi-tech the Key to Boosting Oil Reserves, Say Experts

Posted 06 November 2006 @ 10:20 am EET     Print     Reprint     E-Mail     Comments

ABU DHABI Officials and experts at an oil and gas conference in Abu Dhabi have said that advanced technology was essential in boosting oil reserves to meet increasing global demand.

"We will be soon facing a challenge of producing difficult oil. Easy oil is slipping away from our hands," Omani Oil and Gas Minister Mohammad bin Hamad al-Romhi told the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2006).

"We are already experiencing this in Oman. It is painful and costly. This disease is contagious and will spread to other Gulf nations," Romhi told the first plenary session of the conference titled "Meeting the increasing global demand through innovations".

"We must use advanced technology to increase the recoverability rate of the oilfields... The key is unlocking the oil and gas resources" in the ground, Romhi said Sunday.

He said only 20 percent of proven oil reserves and 10 percent of gas reserves in the six Gulf Cooperation Council (GCC) states, Iran and Iraq have "been extracted".

The Gulf region is estimated to have well over 700 billion barrels of crude reserves and more than 2,000 trillion cubic feet (60 trillion cubic meters) of natural gas.

"These figures are comforting with regards to demand," said Romhi. "Plenty of oil has been discovered. The challenge remains how to get it from the ground."

Growth in energy demand has been rising rapidly in recent years and is forecast to grow further, mainly because of new demand from emerging economies, but new oil and gas discoveries have failed to match the rise.

That has forced producers and consumers to focus their attention on developing new technology to extract more oil from matured oilfields as a way of increasing resources.

British Petroleum (BP) Chief Executive for Exploration and Production Tony Hayward said that resources of crude and gas sufficient for several decades do exist.

But recovering oil from matured fields remained a "major challenge".

"Consumer countries want to see low-carbon constant supplies while producers want to see a stable market to forge ahead with investments... The way to achieve both is through technological innovations," Hayward said.

High technology has been able to boost both production and reserves, he said, while explaining new technology adopted by BP. Hundreds of oil companies from 54 countries are attending the four-day ADIPEC, which opened Sunday.

Mohammad bin Dhaen al-Hamli, energy minister of OPEC member the United Arab Emirates, said in an opening speech that the cartel's decision last month to cut oil output was taken to "absorb oversupplies from the market in order to achieve a balance between supply and demand".

The 11-member Organisation of Petroleum Exporting Countries decided to slash output by 1.2 million barrels per day (bpd) to 26.3 million bpd, effective November 1. Several members have already announced they have implemented the cut.