Despite the volatility in oil prices and the continuously changing business environment over the last two decades, the exploration and production (E&P) industry continues to increase production volumes and improve economic performance. Research and technology advances are recognized as a key driver of this success. Future E&P performance may be even more dependent on continued technological advances and the R&D system.
Responding to a powerful combination of the changing business climate and major scientific and technological advances, new models and trends for industrial R&D have emerged. In this paper, we explore consequences of these trends in view of future business and technological challenges facing the oil and gas industry.
The E&P industry has always been successful in adapting new technology trends, most notably information technology. Exponential growth in computation, global network connectivity and automation technologies are expected to continue to be incorporated into E&P technologies to raise business performance. How will trends in these key technologies impact applications for E&P? In this paper, we will discuss these major technology trends and examine possible impacts on both the E&P technology base and the industry's R&D system.
The research environment in universities and government research organizations are also facing major changes and challenges. Will new expectations from industrial organizations significantly change their key contribution to long-term basic research and graduate education? In this paper we examine some important trends that are affecting the role of universities in research as related to E&P.
We will conclude with an examination of the pathways and potential business models to continue the role of R&D as a driving force for future E&P.
Business drivers It is deemed that the demand for oil and gas will continue to rise due to the increase in world and trends: population and the spread of economic and technological prosperity in regions considered less developed. It is estimated that over the next 25 years the world population will increase by about two billion citizens. In 2020, oil and gas is expected to provide more than 66% of total global energy needs. The biggest challenge facing the oil and gas industry is to meet the future world demand for energy at an affordable price.
The oil companies were, so far, able to meet the challenge of securing the supply for energy despite the severe instability of oil prices. In January 1997, the price for oil was about US $23/bbl, less than two years later the price plunged to about US $10/bbl and in February 2000, it reached close to US $30/bbl in response to planned production cuts. Currently, and due to economic slowdown, oil prices are below US $20/bbl. This is more than 70% lower when adjusted for inflation
