1. The Role of New Technologies in the Sustainability of the Upstream Oil Industry
Dr. Roger N. Anderson
Energy Research Center
Lamont-Doherty Earth Observatory
Columbia University 10

2. Technological Business Drivers:
Shorten Cycle Time, Time-is-Money,
Allow the application of only those Technologies that Improve the business process,
Allow New Perspectives on Manufacturing Problems,
Truly Integrate Field Management with the Business Case!

3. The New Business Environment9

4. Evolution of Oil Price/Cost per Barrel Profit Mix
From Lynch, Jarchow and Cura, MIT
100
Forecast Prices
1995 $$/BBL 50
Real Price
Real Cost

5. NPV, Return-on-Capital and Growth are all over Map!
ROCE

6. Growth = Function of Discoveries - Production & Depletions
Phillips
BP/A
Shell
Agip
Texaco
Exxon
Chevron
Amoco
Elf
Arco
Mobil
Unocal

7. Companies are good at Production Growth or Reserves Replacement, but not often both!II I
Texaco
Amoco
Shell
Agip
Chevron
BP/A
Mobil
Arco
Hydro BP IV
III
Elf
Exxon
Phillips

8. Earnings Performance = Function of Production Growth2 4 6 8 10 16
Earnings Performance = Function of Production Growth 14 12
Texaco
Earnings Growth (%)
BP/A
Arco
Shell 10
Agip
Hydro
Chevron
Exxon 8
Mobil
Elf
Phillips 6

9. Cum $$ NPV Time Exploration Appraisal Development Production
Abandonment
NPV
Cum $$
Time

10. Exploration Performance: Replacement Costs (Boe/$)
New Reserves
Replacement Costs (Boe/$)
Replacement %

12. Barrels per day
Time

13. Production Performance: Production Costs ($/Boe)
Profit/boe

14. Increased Productivity from 4D: 20 Case Studies used
Increased Productivity from 4D: 20 Case Studies used. 2D baseline in 1986, 3D from 1986 to 1995, 4D since 1995! 4D 3D 2D

15. How do we get to 4D Immersion into the Business World?
Injected Gas Breakthrough
Secondary Gas Cap
Hydrocarbon Indicator
Bypassed Oil
Water “Fingers
Bounding Water
Water Injection
3DSeismic
4D Seismic Differences
New Multilaterals!

16. In the Manufacture of Oil and Gas is what really improves Business Performance!
R&D/E&P
(%)
ROCE
Net Profit

17. To get there? Must allow management in a rigorous Business Sense.
Powerful new Far-Field technologies are being introduced not only to visualize portfolios, but to improve the manufacturing process itself.
Growth and Profitability of Oil Industry is being profoundly changed.
There will be No return to Business-as-Usual, no matter what the price does.