Samuel Oben Djan, Lead Geoscientist at GNPC - Upstream challenges & opportunities

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Samuel Oben Djan, Lead Geoscientist at GNPC spoke at the Oil & Gas Event June 2013

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  • Commensurably on the global scene, Ghana is a new entrant in the club of oil and gas producing countries. Our industry is now emerging from the doldrums when the notion was that our sedimentary basins were dangerous geologically to invest and that it did not hold any promise. And after Jubilee some have asked what’s next?The recent discoveries and producing fields have negated those axioms. And there are still yet to find resources in our sedimentary basins indicating that the future of the hydrocarbon industry in Ghana is still bright!
  • Various estimates have been made as to remaining resources and this keep changing as the years pass by.So what is the point? Is there a peak oil really?
  • This picture is based on Esson Mobil’s revisions from 2002. if this is a true reflection of future discovery,Then the future really looks bleak. But just look at the next slide
  • This is the global picture of oil production to 2100 the resource based production forecast. By describing oil as a fossil fuel, everyone admits that it was formed in the past, which means that we started running out when we consumed the first barrel. That much can surely be agreed, even if opinions differ about how far along the depletion curve we are. The global trend shows that we are at the peak production. Despite this assertion, Many new discoveries continue to be unearthed. It could also be indicated that, the West African Gulf of Guinea is a virgin area in terms of exploration and that with improved exploration technology and data, new discoveries holds sway. This is so because the Gulf of Guinea has not seen the aggressive exploration in terms of drilling that has occurred in other parts of the world and this is attested to by the recent activities unearthing discoveries. Global deepwater oil production forecast indicates Africa, in general, as producing a larger percentage of oil. The graph shows a comparison of the world production of deepwater oil and the contribution from Africa. Certainly, Africa is the destination for future investment opportunities especially, GHANA!!
  • I agree with John Mitchel, who said that Peak oil is a misleading idea!!.The potential for future oil production depends on resources being converted into reserves by the application of technology, economics and investment.
  • These are but a few of the discoveries made in just 2011.The implication is that the potential for future discoveries are there and hence the idea of peak oil is indeed misleading.
  • The story has now began. These recent discoveries which are all at various stages of appraisal and development.
  • Inland Voltaian Basin – 103,600sqkm after Phase I of the initial reconnaissance study.At the moment, an aggressive exploration activity in the Voltaian Basin is underwayTo unearth the potential of this basin. This is being done in phases. The initial Phase IIs expected to be completed early next year and investors will then be invited to partake in the Exploration activities. Farm-in/ Joint venture partnerships still existValue addition to hydrocarbon resources especially in the downstream sector – Production Of Fertilizer, Methanol, petrochemicals etc
  • Meeting the energy demand of Ghana is a challenge. Increasing energy demand puts pressure on the Upstream industry to produce moreOil & gas needed in thermal Power generators as reliance on hydro is becoming more and more insufficient.
  • The ramification of this will translate into the economy here in Ghana.
  • Uncertain reservoir upstream operators have largely implemented production optimization processes in an isolated and independent manner at different levels of the production process. For example, production is optimized at the business level by focusing on maximizing recovery and net present value of the asset or reservoir. Or a producer may focus on the installed or operational levels of the production chain by optimizing specific wells, gathering networks, or surface facilities. Each of these efforts can improve production, but it isn’t until these divided processes are fully integrated that operators will realize the true value of production optimization.
  • The industry has just began in Ghana. Emissions of carbon dioxide management Managing properly the environment may seem to be in order. Maintenance and drills may be in order So that in the event of any such disaster, we will not be taken unawares.Certainly managing offshore hazards should be a team responsibility.
  • This is a global statistics but reflects well on the condition in Ghana as well.Improved methods of exploration, such as directional drilling, completion engineering, and purification technologies have all dramatically improved, thereby intensifying the need for highly qualified technical specialists.
  • Direct Employee costs are the costs related to identifying, hiring, training, and retaining qualified employees and include the following:1. Hiring and replacement costs ƒ 2.Training and lost productivity costs ƒ 3.Compensation; including the cost of: - Salary increases - Annual and long–term bonus increases
  • The petroleum industry lost almost half a million jobs between 1982 and 2000 (API 2004 survey). The cyclical nature of the industry contributed to increased layoffs while hiring has been at an all time low since the early 1990s. Currently, the average age of an experienced employee in a management or technical position (e.g. petroleum engineer) is approximately 48 to 50 years. The Average Age of a Technical Employee is 48-50 Years As evident in the graph, the impact of workforce reductions is not being addressed from the strategic viewpoint of long-term succession planning. The current domestic workforce composition reveals that the majority of employees are Baby Boomers. The Oil & Gas Industry on the edge of a demographic Cliff.
  • 35000/12= 2916.66 = GHC 8749.98130,000/12= 10,833= GHC 32,500
  • The high salary levels makes it difficult to employ and pay such highly qualified professionals for the industry.
  • 1. The potential of the oil & gas business in Ghana has just began. There is still yet to be found resources both in the inland Voltaian Basin, and the offshore deepwater sedimentary basins.2. Peak oil is a misleading idea. The potential for future oil production depends on the application of technology, economics and sound investment practices3. The long term Impact of the workforce crisis should be addressed by all interested parties in the oil & gas industry to prevent damage in the form of market corrections and diminished domestic energy security.
  • Samuel Oben Djan, Lead Geoscientist at GNPC - Upstream challenges & opportunities

    1. 1. Upstream Opportunities & ChallengesGhana in a global context, the future & thechallenges of the oil and gas industryS. Obeng-DjanLead Geoscientist
    2. 2. ©GNPC 2013Outline• Ghana in a global context• Global production outlook• Peak Oil?• What The Future Holds– Sedimentary basins of Ghana– Recent Discoveries– Future Opportunities & Time Lines• Upstream Challenges• Conclusion
    3. 3. ©GNPC 2013Ghana in a global context
    4. 4. PROSPECTIVE RESOURCESROBERTSON0 500 1000 1500 2000LIQUIDSGASUSGS(2000)CAMPBELL(1998)MASTERSet al(1994)(2000)Robertson
    5. 5. ©GNPC 2013
    6. 6. AUSTRALASIASource: Global Deepwater forecast of oil production from 1987 – 2050 (Energyfiles)Global Deep-water forecast of oil production from 1987 – 2050
    7. 7. ©GNPC 2013PEAK OIL REALLY?• ‘Peak oil is a misleading idea’• Technology is the key.• Oil reserves have more than doubledsince 1980 – more than the increasein production: oil is not running out.
    8. 8. ©GNPC 2013Peak Oil Really?• A variety of new technologies is creating newreserves outside the traditional oil-exportingcountries: in pre-salt reservoirs, ultra-deepwater, impermeable deposits (such asshale), accessed by a combination ofhorizontal drilling and ‘fracking’• Reserves are also increasing in manytraditional exporting countries, with newtechnology focused on their particularconditions, e.g. enhancing ultimate recoveryfrom mature reservoirs.
    9. 9. ©GNPC 201310 discoveries in the world - 2011Name of basin Operator Block/ basin DiscoveryOnshore Argentina Repsol YPF Vaca Muerta basin 927MMbblOffshore Australia Apache WA-290 – PExploration Permit427ft(130m) of net gaspayBarents Sea Total EP Norge AS Production License53510-50Bscm(recoverable gas)GOM ExxonMobil Keathley Canyonblock 919, 918recoverable resource ofmore than 700 MMboecombinedOnshore Iraq Heritage Oil Kurdistan Region 6.8-9.1 trillion cubic feet(Tcf) with 42-71 MMbbl ofcondensate and 53-75MMbbl of oil.Offshore Malaysia Petronas NC3 and Spaoh-1 wells inBlocks SK316 and SK306offshore Sarawak."2.6 trillion standard cubicfeet (tscf) of net gas inplace.Offshore Mozambique Eni Mamba South 1prospect,696 feet (212 m) of continuousgas payOnshore US Anadarko Wattenberg field, 500 MMbbl to 1.5 Bboe
    10. 10. ©GNPC 2013WHAT THE FUTURE HOLDSFOR GHANA
    11. 11. ©GNPC 2013SEDIMENTARY BASINS OF GHANAVOLTAIAN BASIN
    12. 12. ©GNPC 2013Ghana Offshore Activities! !!! !!! !!! !!!!!!!!"ª ªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªª ªªªª ªª ªª ªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªª ªªªªªªª ªª ªªªªªªªª ªªªªªªªªªªªªªªªªªªªªª-50m-3500m-4000m-500m-200m-4500m-2500m-2000m-5000mADAAXIMKETATEMAAPAMACCRAANLOGAELMINAESIAMAATUABOWINNEBADIXCOVEBONYERESALTPONDCAPE COASTPRINCES TOWNKUMASIJ-06J-05J-01J-07TP-1ST-8ST-6ST-9HCTP-1ODUM-2ODUM-1NAK-1XKETA-1GH5-B1CUDA-1SANKOFADZATA-1WCTP-1XTEMA -1DZITA-1NUNYA-1XSAPELE-1 SHAM 9-1S.DIX-1XDOLPH-1XDIX 4-2XATIAVI-1AXIM 4-3XPARADISE-1KOMENDA-2XCHAOS 13-2AMOCO 16-1TAKORADI 11-12°00"W4°00"W 2°00"E1°00"E0°00"1°00"W3°00"W7°00"N 7°00"N6°00"N 6°00"N5°00"N 5°00"N4°00"N 4°00"N3°00"N 3°00"N
    13. 13. ©GNPC 2013Recent Discoveries besides Jubilee inGhana
    14. 14. ©GNPC 2013Post Jubilee Discoveries and Status14
    15. 15. ©GNPC 2013! !!! !!! !!! !!!!!!!!"ª ªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªª ªªªª ªª ªª ªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªªª ªªªªªªª ªª ªªªªªªªª ªªªªªªªªªªªªªªªªªªªªª-50m-3500m-4000m-500m-200m-4500m-2500m-2000m-5000mADAAXIMKETATEMAAPAMACCRAANLOGAELMINAESIAMAATUABOWINNEBADIXCOVEBONYERESALTPONDCAPE COASTPRINCES TOWNKUMASIJ-06J-05J-01J-07TP-1ST-8ST-6ST-9HCTP-1ODUM-2ODUM-1NAK-1XKETA-1GH5-B1CUDA-1SANKOFADZATA-1WCTP-1XTEMA -1DZITA-1NUNYA-1XSAPELE-1 SHAM 9-1S.DIX-1XDOLPH-1XDIX 4-2XATIAVI-1AXIM 4-3XPARADISE-1KOMENDA-2XCHAOS 13-2AMOCO 16-1TAKORADI 11-12°00"W4°00"W 2°00"E1°00"E0°00"1°00"W3°00"W7°00"N 7°00"N6°00"N 6°00"N5°00"N 5°00"N4°00"N 4°00"N3°00"N 3°00"NFuture opportunities & timelines
    16. 16. ©GNPC 2013Upstream Challenges
    17. 17. ©GNPC 2013Upstream Challenges• The upstream oil and gas industry faces acomplex set of conflicting issues, including:• Increasing energy demand,• Reserves increasingly difficult to locate andproduce• Environmental challenges• Shortage of qualified professionals and theImpact
    18. 18. ©GNPC 2013Upstream Challenges-IncreasingEnergy Demand• Energy demand is projected to increase 40–50% by 2035.• Global consumption of natural gas is forecastto rise 52 percent, to 169 trillion cubicfeet, from 2008 to 2035.• Economic growth continues to look good inemerging nations like Ghana,• China and India will consume 31 percent ofthe world’s energy by 2035 (IEA)
    19. 19. ©GNPC 2013Upstream Challenges-ReserveOptimization• Uncertain reservoir parameters– Prognosis vrs actuals• foreseeable and unexpected eventssuch as maintenance and intervention
    20. 20. ©GNPC 2013Upstream Challenges - Environmental• Energy-relatedemissions of carbondioxide will rise.• Oil Spill contingencies& Management
    21. 21. ©GNPC 2013Upstream challenges:Shortage of qualifiedprofessionals - The Impact
    22. 22. THE CHALLENGE-PRODUCTIVITY “GAP”STARTINGUNIVERSITYPRODUCTIVEGEOSCIENTIST8 YearsModified from Kaldi, 2004Photo by Bennett, 1885,from Wolf, 1983cac 2006, photoby Wolf 1983
    23. 23. ©GNPC 2013Upstream Challenges-Professionals• In the next 7 years, 40 – 70% ofexperienced Geoscientist will beeligible to retire. [New York Times]• Need for technology and skill transfer• Role of government & IOCs
    24. 24. Katz, 2003 AAPGData normalized to excludenon-geoscience employmentPost Graduation Jobs for Geoscientists, US & Canada
    25. 25. ©GNPC 2013The impact• The impact of this shortage of skilledstaff has effect on two key areas withinthe industry:– ƒ Direct employee costs– ƒ Lost profits from lack of experiencedstaff
    26. 26. ©GNPC 2013Direct Employee Cost• ƒHiring and replacement costs• ƒTraining and lost productivity costs– More time needed to train to appreciablelevel for effective production• Compensation; including the cost of:– Salary increases– Annual and long–term bonus increases
    27. 27. ©GNPC 2013Lost profits from lack ofexperienced staff• Delayed or cancelled projects• An inability to implement growth andexpansion plans• Costs related to safety issues– A lot of expensive mistakes on the job• Costs of alternative staffing methods(consultants)
    28. 28. ©GNPC 2013Another Ugly Situation!
    29. 29. ©GNPC 2013 29Source: Deloitte, 2005AGING WORKFORCE
    30. 30. ©GNPC 2013Case study: Geology Dept. (GNPC)
    31. 31. ©GNPC 2013So why not attract more?31
    32. 32. ©GNPC 2013Salary levels - UK• Range of typical starting salaries: £28,000 -£35,000, depending on level of qualificationon entry. This usually increases significantlyfollowing completion of necessary training.• Range of typical salaries at senior level:£35,000 - £70,000 rising up to £130,000 atmanagement level with over ten years’experience.Source: http://www.prospects.ac.uk/geoscientist_salary.htm
    33. 33. ©GNPC 2013Salary levels - USASource: AAPG Explorer
    34. 34. ©GNPC 2013Salary Comparisons by RegionAssistant Geologist$106,229$113,337$91,864$109,461 $107,103$88,505$92,981$99,296$79,772$0$20,000$40,000$60,000$80,000$100,000$120,000Africa Australia &OceaniaCentralAsiaEurope Far East MiddleEastNorthAmericaSouthAmericaSouthernAsiaAnnual SalaryContinentsSalary/p.aSalary/p.aSource: http://www.rigzone.com/jobs/salary/
    35. 35. ©GNPC 2013Addressing the issue!• Redesign recruiting effortsto accommodate matureworkers• Industry must be attractivewith incentives• Retain talented matureemployees through specialprograms• Preserve critical knowledgebefore it’s lost• Industry should beinterested in academia(school systems)35
    36. 36. ©GNPC 2013Conclusions• The potential of the oil & gas business in Ghanahas just began.• The potential for future oil productiondepends on the application oftechnology, economics and soundinvestment practices• The long term Impact of the workforce crisisshould be addressed by all interested parties inthe oil & gas industry
    37. 37. ©GNPC 2013THANK YOU FOR YOUR ATTENTIONIT REQUIRES COLLECTIVE THINKING

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