By Friso Veenstra, Director of Market Management, Elsevier While the idea of peak oil in itself may not be so controversial, there is still substantial debate on when it will be reached, or if it already has. Despite the fact that global oil output is still increasing, the yields of traditional areas such as the US and large parts of the OPEC nations are still showing a decline. As a result, oil and gas companies are already exploring options beyond the tried and tested areas, not just to help ensure profits but also to keep producing oil at the rate the globe demands. While production is still high, this is still only delaying the inevitable: oils and gas are, essentially, finite reserves. Regardless of the time scales involved, peak production will one day be reached and, further down the line, global reserves will finally run dry. The knowledge that global reserves are finite is, in part, driving the impetus to explore alternative energy sources. However, there are so many uses for oil beyond simple energy production that even if we were to adopt alternative fuels worldwide tomorrow the globe would still be utterly dependent on oil. From detergents to medicines, plastics and synthetic materials, the world relies on petrochemicals to keep running. As a result, whatever the true amount of oil left under the surface of the globe may be, oil and gas companies must be sure that they can, if necessary, reach and extract it. This means searching further and further afield from more established areas. However, there are a number of obstacles to this. Finding Resources First is the challenge of actually identifying where resources are. Established locations such as the Middle East, the southwestern US and North Sea are very much a known and heavily trafficked quantity. Indeed, the size and accessibility of the reserves is what gave these areas prominence in the first place. Instead, exploration needs to take place in previously ignored areas. Whether this involves deepwater exploration, remote areas, or locations that may be politically sensitive, oil and gas companies must prepare for identifying and reaching resources that become even more challenging endeavors. Increased Competition Second, there is increasing competition for those reserves that remain. Growing economies such as the BRIC (Brazil, Russia, India, and China) nations are demanding increasing amounts of oil as these industrialize and seek to advance the economies. As more and more nations worldwide seek to do the same, this demand will only increase. At the same time, national oil companies are beginning to step up exploration. Previously confined to their own nations, internationalizing national companies are spreading their wings and increasingly searching for resources beyond their own borders. Thanks to this, oil exploration is becoming an increasingly competitive field regardless of location. Extraction Challenges Third, even when resources are identified, these still have to be extracted. This can produce a number of complications beyond simple logistical difficulties based on depth, location, or geology. The political situation in an area can be of prime importance: if the area is contested, for example in the Sea of Japan, or is otherwise experiencing political upheaval, it can be difficult to begin extraction in the first place, let alone guarantee the safety of any operations. There can also be local resistance to extraction, particularly when it comes to unconventional resources such as shale oils that must be accommodated before any work actually begins. Geoscientists’ Time To Shine? These challenges provide a conundrum for exploration companies. Due to the importance of locating and successfully extracting resources, these must be as diligent as possible in identifying potential areas for exploration in order to ensure that no effort is wasted in the search. Yet at the same time, increasing competition introduces a strong time pressure: spend too long researching a particular area and a rival company may beat you to the punch. Thanks to this, the role of geoscientists in oil exploration is more crucial than ever. By providing the initial research and risk assessment of where organizations should focus energies, geoscientists can make all the difference between organizations reaching vital resources or missing out completely. In order to provide this, geoscientists need to make sure that the information they are both using and providing to colleagues meets three criteria. First, it has to be available quickly: ideally on-demand. With increased competition for resources, time spent collating information from disparate sources in order to gauge the potential of a basin or other area is time lost. Second, any information needs to be comprehensive. If acting on limited information, geoscientists cannot predict risk factors for new exploration areas with any degree of accuracy or confidence. Lastly, any information needs to be easy to share and understand beyond the geoscientists themselves. In order to be successful, geoscientists must be able to share the results of their research up and down the exploration chain, from workers performing more detailed investigations on-site to the financial and legal teams that will be responsible for facilitating the ultimate decision on any new exploration. If these non-specialist workers cannot understand geoscientists’ data, then even the most accurate predictions, produced in the fastest possible time, can ultimately prove fruitless. The search for new oil resources will occupy the industry for many years to come. If they can ensure they have all the information they need close to hand and ready to share, geoscientists can be huge assets to helping our oil-dependent world keep turning.
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