From the swampy gas fields of Louisiana to Alberta’s cold tar sands to the jungles of Colombia, the best is yet to come for oil and gas production, panelists predicted during a discussion at IHS CERAWeek.
“We have drilled a very small percentage of the opportunities that exist in the U.S.,” said Doug Lawler, chief executive officer of Chesapeake Energy, adding that improved technology and efficiency gains in well drilling make plays that had one been considered too expensive economically viable.
Lawler was one of three panelists discussing the future of upstream, and he said that the nimble nature of independents in the U.S. have been a key factor in the shale renaissance, because of their abilities to innovative and make quick decisions on future plays.
Fellow panelist Javier Gutierrez, president of Colombia’s national oil company, EcoPetrol, agreed that the speed and success of US shale exploration has provided a model that the rest of the world, including Colombia, is trying to emulate.
Gutierrez noted that mineral rights law in the U.S., which give private property ownership to the landowner, are unique, but said that Colombia is working on ensuring its regulations are capable of overseeing shale development, while not squelching international investment interest.
“You have done something speculate in the US, but it is not so easy in other parts of the world,” Gutierrez, noting that other additional challenges such as water sourcing remain.
The success of shale development has also been the result of imaginative geology and cutting-edge technology resources, Lawler said, noting that Chesapeake has a geological resource center that has sped up the time for decision making on new plays by months. Many of these strategies could be used overseas, Lawler said.
“I look forward to those opportunities, both in Colombia in other parts of the world, because I think absolutely it can be done,” Lawler said.
Chesapeake is also bullish on future opportunities to develop Mexico’s side of the Eagle Ford said, but is focusing on its domestic plays for the foreseeable future, Lawler said.
But while the talk in Houston has focused on the deepwater plays, Gutierrez said that many international companies are eyeing Mexico’s unconventional sector, because of the huge amount of resources.
“I think it is going to be a huge opportunity for Mexico, but also for those in the industry around the world,” Gutierrez said.
Colombia’s national oil company, EcoPetrol made the transition that Mexico is attempting, and now successfully competes for projects throughout Latin America, Gutierrez said. It has doubled its production since 2007 – a feat that Gutierrez attributes to the regulatory, investment-minded frameworks it put into place.
“We have a competitive royalty structure, we have a strong institutional framework with clear responsibilities,” Gutierrez said. “It is commercially oriented.”
Opportunities will also abound for the infrastructure needed to transport the oil and gas, said Russ Girling, president and CEO of TransCanada Corp.
TransCanada is developing the Keystone XL pipeline project, but Girling said it is one of many projects for the company, noting that the company has $38 billion of projects it plans to finish by the end of the decade, and another $40 billion of projects already under construction.
But even with the delays it has faced, Girling said he is confident about the future of Keystone, because of the continued demand for oil in the United States and because of the economics of pipelines over rail for transport.
“The market will dictate that this pipeline will get built,” Girling said.