Gould—reservoir characterization portfolio ‘complete’

Schlumberger chairman sees technology as oil’s future. Integration to follow acquisition spree.

Speaking at the 38th Annual Howard Weil Energy Conference in New Orleans last month, Schlumberger chairman Andrew Gould described 2010 as a ‘transition year for energy’ as a nascent recovery in oil demand and OPEC discipline is leading to stronger prices. For natural gas, the picture is very different with short-term supply growth from a rapid increase in LNG capacity and the remarkable phenomenon of unconventional gas. Gould doubts that the gas glut will lead to a price fall as costs of extraction and rapid decline rates make for higher costs. Also the IEA forecasts gas demand to rise constantly out to 2030.

Gould then turned to the relative cost of future oil and gas sources. The world is not short of either oil or gas but the industry is challenged by more difficult types of hydrocarbons. There are ‘ample’ resources but transforming them into reserves will make a significant call on technology. This implies a long-term commitment to R&D and commercialization.

Technology is needed to help recover unconventional oils and gases. Technology again is required to explore and develop frontier areas such as the deepwater and the arctic. And finally, technology is required to target enhanced recovery from fields already in production—where new technology is likely to make the biggest difference in the short term.

Gould sees technology as the basis of Schlumberger’s leadership position noting en passant, that, wireline and MWD excepted, Schlumberger’s technologies all result from acquisitions. In petrotechnical software, the acquisition of ‘a small company building exploration workstations’ has led to the ‘Windows’ of the oil and gas industry [Petrel].

Looking forward, Gould considers that, apart from some niche technologies, both Schlumberger’s reservoir characterization and development portfolios are complete. What remains to be achieved is a major integration challenge—particularly with regard to the Smith acquisition where ‘much remains to do.’

Gould wound up introducing Schlumberger’s new COO, Paal Kibsgaard, who will handle the day-to-day running of the company while Gould concentrates on the technology portfolio and on completing the integration of Smith. More from slb.com.

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