Speakers
Peter M. Jackson Senior Director IHS CERA (Chair)	Jay Pryor Vice President, Corporate Business Development Chevron
Bill Schrader Chief Operating Officer TNK-BP	Jakob Thomasen Chief Executive Officer Maersk Oil
Michael Yeager Group Executive and Chief Executive, Petroleum BHP Billiton Petroleum Ltd.

IHS CERA Senior Director Peter Jackson chaired a plenary panel that explored the key lessons for the upstream oil sector from the recent economic crisis and the main challenges the sector faces going forward. In Mr. Jackson's view the upstream oil and gas sector is currently very healthy. The increasing rate of investment in exploration and production despite the temporary collapse in oil prices shows that the industry has avoided making a mistake typical of past economic crises. However resource access will be the key obstacle facing international oil companies in the future.

Jay Pryor, Vice President of Business Development at Chevron, highlighted how the oil industry landscape has changed dramatically over the past year. An extremely tight market in 2008 has given way to a loose market characterized by high spare production capacity. However, despite current conditions energy demand will clearly increase over the next 20 years. For example, over the next 5 years new global production of 30 to 45 million barrels per day (mbd)--equivalent to three times today's oil production in Saudi Arabia--will be needed to keep up with increasing global energy demand and decreasing production from existing fields. Therefore all sources of energy, including oil and gas, are crucial to meeting future demand. Mr. Pryor noted that Chevron's long-term approach to the upstream sector consists of steady investment in exploration regardless of fluctuations in the price of oil, given that current production is as important as investments in new production. He listed four key drivers to meet long-term supply challenges: legislation should open access to new areas for production, such as the US Outer Continental Shelf; growth in supply requires a stable investment climate with clear fiscal terms; continued technological improvements must increase production while meeting environmental challenges; and collaboration among the business community, governments, and the environmental community will aid energy supply growth. Mr. Pryor believes that Chevron's LNG project in Northwestern Australia is a good example of this type of effective collaboration.

J. Michael Yeager, Chief Executive Officer of Petroleum Business at BHP Billiton, emphasized the importance of steady investment rates in the upstream sector. He said a strong balance sheet is a necessary condition for every successful company in the upstream sector, as it allows them to invest through the business cycle. BHP Billiton increased its oil production from 350 million barrels per day (mbd) in 2006 to 450 mbd in 2009 and has continued to invest throughout the recession. The company's investment model is to focus on market fundamentals and not on short-term price fluctuation in its decision-making process. This strategy has been critical to BHP Billiton's success and lies at the core of the company's investment strategy in all of its commodity businesses, such as copper, metallurgical coal, aluminum, and other minerals. Mr. Yeager is confident that companies that maintain strong financials will be well positioned during future economic crises and will emerge strengthened by the opportunities that economic crises present.

Bill Schrader, Chief Executive Officer at TNK-BP, discussed the key challenges facing upstream oil companies in Russia today. TNK-BP is the third largest producer of Russian oil, with 2009 production levels of 1.7 million barrels of oil equivalent per day. However, the recent slowdown in Russia's oil industry has raised a number of challenges for the upstream sector. Mr. Schrader summarized two challenges. The brownfield challenge, as he described it, consists of sustaining production levels from mature oil fields. The Samotlor field in Siberia and the Orenburg field in the Urals region are both examples of TNK-BP's successful efforts to achieve this. On the other hand, the green challenge requires establishment of new production centers. TNK-BP is currently exploring the Uvat field in western Siberia and the Verkhnechonskoye field in eastern Siberia, which could bring substantial new production onto the market. Mr. Schrader believes that TNK-BP is an example of a western company working successfully in Russia and delivering world-class technology and experience.

Jakob Thomasen, CEO of Maersk Oil, believes it is critical for the oil industry to change the public's negative perception of the industry as old-fashioned and environmentally unfriendly. The strong demand for oil projected for the next 20 to 30 years indicates that there is a bright future for the industry. However, attracting the best talent and accessing resource areas will be key challenges facing independent oil companies over the next couple of decades. One way to help change the industry's public image is to lead the way on environmental issues, such as carbon abatement. Maersk is currently looking to combine carbon capture and sequestration with enhanced oil recovery--a large but promising endeavor for the industry. Similarly, oil companies should continue to increase production efficiency and the safety of their operations. Ultimately, collaboration among companies in the upstream industry will be critical to finding solutions to these challenges.