By Collin Eaton and Ryan Holeywell
Increasingly powerful computer chips used to advance seismic imaging have emerged as the most important technological leap for the oil industry as companies dive into deep-water frontier basins, an energy executive told an Offshore Technology Conference luncheon audience Tuesday.
Seismic imaging has plotted out oil and gas fields near Mozambique, which wasn't on the oil industry's radar a decade ago, and has made discoveries around basins in Brazil, where the industry has been for decades, said Dominique Janodet, an executive with French oil giant Total.
Janodet said Total's computing speed for seismic imaging has increased 1,000-fold over the past eight years.
Evolving technology has contributed to the 88 major offshore oil discoveries and the 372 billion barrels of oil equivalent tabulated worldwide in the last decade.
"Countries have emerged in the oil business not on the agenda a decade ago," Janodet said. "We see new oil provinces emerging all over the world."
He addressed a session on new offshore frontiers on the second day of the conference that runs through Thursday at NRG Park.
Total, he said, has identified five prospective plays it considers the largest in the world - in India, Canada, Norway, Libya and Malaysia. But oil companies also can use the new technologies to increase production at established plays.
"If you want to find new barrels, you need something new in your analysis," Janodet said.
Advances in Brazil
In Brazil, seismic advances have allowed oil companies to employ an algorithm designed to reveal where oil is in images distorted by salt formations.
Total owns 20 percent of the working interest in Brazil's massive Libra pro-ject, an offshore field where a consortium led by Brazil's Petrobras is tapping into an estimated 12 billion barrels of oil.
Changes in Mexico
Latin American oil also figured in sessions focused on the historic overhaul in Mexico's energy policy that will open its oil and gas sector to private investment for the first time since the 1930s. That will mean changes at Petroleos Mexicanos, or Pemex, the state oil company that has operated for decades as a monopoly.
Arturo Henríquez Autrey, Pemex's new chief procurement officer, said the company has to modernize the way it spends money.
Pemex's purchasing power within Mexico is so large that its spending represents several percentage points of Mexico's entire gross national product, Autrey said, but spending procures aren't always efficient.
Pemex spends $25 billion to $30 billion annually on goods, equipment leases and other forms of procurement.
But the task of managing that spending falls on more than 2,600 employees spread across more than 100 separate purchasing offices, Autrey said, and the company lacks standardized purchasing procedures.
In January the company created a centralized procurement division in hopes of getting more bang for its buck. "When you're spending $30 billion, you should be getting the best conditions in the market," he said.
The move should be a harbinger of other reforms the company will have to develop as its faces serious competition from foreign firms for the first time.
"It's a historic time for Pemex," he said. "For Pemex to do this, it needs to modernize and transform the way it does business."
At the same session on Mexican energy reform, another oil executive noted that simply opening up the company for foreign investment doesn't mean it will come in droves.
"It's a very competitive business to get companies to invest their dollars in your country," said Helge Hove Haldorsen, an Offshore Technology Conference board member and vice president of strategy and portfolio for Statoil in North America.
Mexico will have to compete with other nations hoping to attract the top exploration and production companies, Haldor-sen said, and it will have to make the case that Mexico warrants investment.