Better days will come, now is the time to secure project partners and investors.
This was one of the key messages from Mike Lakin, Managing Director of Envoi, in yesterday’s “Let’s connect”, part of AAPG’s series of webinars during the lockdown.
His talk “The current status and future potential of Global E&P and need for Hydrocarbon A&D to satisfy even the Green Army’s demands” covered the future of A&D within the E&P sector, the influence of Global events including the pandemic and the inevitable need for more hydrocarbon than is predicted.
Energy transition is not something new, it has been going on for a long time already, Lakin emphasized.
The situation in the industry has never picked up again as before the crash in 2008. Then another crash hit in 2014.
Too many experienced geologists and geophysicists fell out of the industry as a result of the 2014 crash, leading to an important lack of experienced personnel in the industry.
This leads to fewer successful projects, which again lead to fewer wells being drilled, as it became more difficult to be trusted by the investors. We have to educate and communicate to close the gap between the investors and the technical people.
Lakin also claimed that from 2014, the oil companies have been paying high salaries for less experienced and successful employees.
On a global basis, it has become more difficult to find hydrocarbons. A number of small oil companies with few and highly experienced people make successful discoveries, then major oil companies farm into these or take full control over the resources. According to Westwood, TOTAL was the most active farm-in company between 2014-18.
UK is an example of a fantastic place to go to explore for gas. There are so many opportunities overlooked in the past, due to companies’ need to focus on lower hanging fruits. The more challenging, but probably highly rewarding prospects have not been prioritized yet. Again, as a result of lack of knowledge and willingness to take the risk to invest in these.
There is currently not enough energy in the world to keep people without hydrocarbons. As the world’s population is growing, the demand for hydrocarbons keep rising, and in China, the demand for coal keeps rising.
Lakin concluded by saying “Yes, we are needed, we will be needed after the pandemic and for a long time going forward. Only geologists, geophysicists, geoscientists can save the world, as they know where and how to find hydrocarbons. “
This is the time to do business because it will all come back.
TEXT: TORIL LEITE