Speakers
Daniel Yergin Chairman IHS CERA (Chair)	Kjell Pedersen President & Chief Executive Officer Petoro S.A.
Andy Inglis Chief Executive, Exploration and Production BP

IHS CERA Chairman Daniel Yergin led Tuesday's Global Oil Plenary session, which explored the challenges of frontier exploration and production (E&P) and of maximizing output from mature fields.

Andy Inglis, Chief Executive, Exploration and Production, BP, described the challenges of frontier E&P and the relevance of international oil companies (IOCs). E&P frontiers are not only physical, but also geopolitical and environmental, he said. The challenges include overcoming complex exploration conditions, maximizing recovery, minimizing the environmental footprint, and achieving sustainability--a diverse energy mix that includes low-carbon fuels. He also cited as crucial the "X factor"--the "frontier mindset."

In frontier E&P national oil companies require IOC expertise. IOCs, governments, and businesses must form partnerships based on mutual interest, he noted. BP will continue to use leading-edge technologies to identify and unlock frontier resources and to replicate best practices around the globe.

Companies can "never afford to stand still; each frontier requires a step change in capability," he stressed. BP's latest step is into deeper water in the US Gulf of Mexico and offshore Africa. Game-changing developments in information technology, seismic imaging, and digital data are essential to this effort. Enhanced oil recovery (EOR) techniques involving low-salinity water and trials of "bright water" flooding promise to maximize recovery rates from mature fields. These technologies are being transferred to BP TNK for use in Russia's Samotlor field, where they have doubled proved reserves over the past five years. Alaska has also become a test bed for EOR, he said.

BP will turn this momentum into "sustainable delivery for the next decade," linking opportunities with the appropriate technologies to strengthen portfolios. Mr. Inglis urged companies to "make excellence the norm, prioritize the right activities, and standardize functional structure for regional businesses." BP is also developing the capabilities to use the technology fully and effectively--creating road maps for E&P professionals through its state-of-the-art learning center in Houston that transfers expertise around the world via high-definition video. Mr. Inglis concluded that the industry needs technology and strategy, but more importantly the right mindset that "wants to win, wants to lead, and won't give up."

Speaking on the importance of mature fields, Kjell Pederson, Chief Executive Officer, Petoro, said that 50 percent of oil production in 2020 will come from fields that are more than 20 years old. Assuming flat demand in 2030, a staggering 45 million barrels per day from the decline of existing fields would need to be replaced to meet global needs. Mature fields present both daunting challenges and big opportunities.

Early in Norway's oil industry, officials invited participation from international oil companies (IOCs) to benefit from the best technologies and resources available. Policymakers also made maximizing economic opportunity a primary goal. Norway has always had a strict regulatory system with a focus on safety and the environment, Mr. Pederson said. Petoro aims to maximize the financial results of its portfolio, focusing on enhanced oil recovery (EOR) in mature fields, while maintaining the highest standards of platform and equipment maintenance.

Globally there is higher production from existing fields than from new discoveries. Petoro started very early to use water and gas injection to improve recovery, establish a reservoir management plan, and continuously drill new wells and work over wells. With production facilities already in place, improved oil recovery from mature fields is good business, he said. Petoro employs intense exploration programs in the areas around big fields, "vacuum cleaning" all possible reserves in the area. The uncertainties of EOR in mature fields include applying the right technologies to drive these reserves out, such as "bright water": "If it works elsewhere, why not use it?"

Mature fields are essential in meeting world oil demand. The biggest challenge, concluded Mr. Pederson, is lack of an obvious trigger for creating a sense of urgency to invest in these fields before it is too late.

With Dr. Yergin, David Hobbs, IHS CERA Vice President and Managing Director of Global Research, led the question and answer session, which focused on the long-term need for fossil fuels, the role of technology in frontier and mature fields, and production potential in Iraq and the North Sea.