Global Offshore Development: Opportunities and Challenges

 Panel moderated by Nick Coleman, S&P Global Platts

Given the recent drop in oil prices, is there still an attraction to deepwater, and if so, is it still worth the effort?

Mr. Chabas said the deepwater industry has been prepared for moments like this. Since 2014, the industry has focused on decreasing development time and being more proactive to keep up. Mr. Chitangueleca added that he thinks it boils down to flexibility, contractual and legal, and to having a more streamlined approval process. Mr. El Bakly shared that most new discoveries are in deepwater, so he believes it is worth the effort—but the challenge is to find ways to improve economic viability.

Is old-fashioned diplomacy still needed to get deepwater products going?

Mr. Stover said that, although customer and business relationships may be in place, you must engage with governments early to get the support needed to move forward—that getting everybody’s objectives and needs on the table upfront is the key. Although some might call it diplomacy, he just calls it being a good partner to everyone he’s working with.

There is always a story for local content, creating jobs and local wealth. How do you see that that dynamic changing?

Mr. Chabas said the need to develop a field quickly and bring wealth to the nation was a dilemma for which SBM views standardization as the solution. Standardized products make localized training easier, and helps with development time and economics.

Regarding energy transition and the pressure to reduce emissions, is there a difference between a mature field like the North Sea versus Luanda for example? Is it a primary or secondary consideration?

Mr. Chitangueleca said that for a long time, they weren’t banning flaring because they were only interested in oil, but they’ve since realized it was wasting resources. Now they rely on best practices from European IOCs who are committed to lower carbon emissions, and have solutions built into their proposals. For its own part, Angola is now targeting zero flaring. It already has one LNG plant, and is starting a big gas-to-power project. It also approves projects based on how they will manage gas, for which there are two options: injected to increase recovery, or as LNG.

Gas-to power is a key focus in Egypt too, said Mr. El Bakly, as part of its work to control carbon emissions, along with improving the efficiency of its power generation. He said energy transition is part of the country’s daily agenda now.