Oil & Gas in the 21st Century

1. Oil & Gas in the 21st Century The role and status of OG21 Presentation at the Force seminar “New Strategies in Petroleum Research” 13. May 2004 Per Gerhard Grini www.OG21.org

2. OG21 –Oil & Gas in the 21st Century Main Objectives Develop new knowledge and technology to ensure economic and environmentally sound development of the resources on the Norwegian Continental Shelf --------- Strengthen the industry’s competitive advantage in a global market by developing new and attractive technology products and systems

3. OG21 Board 2003-2005 Terje Overvik, Statoil (leader) Alfred Nordgård, Norske Shell Jens Hagen, Norsk Hydro Manfred Budny, Esso Norge Rune Strømquist, Demo2000 (ABB) Jarl Arve Kosberg, AkerKværner Åsmund Bøe, Schlumberger Ann Christin Gjerdseth, FMC Kongsberg May Britt Myhr, SINTEF Petroleum May Britt Hägg, NTNU Karin Refsnes, Norges Forskningsråd Bente Nyland, OD Jostein Dahl-Karlsen, OED (observer)

4. Development perspectives for the Norwegian Continental Shelf 300 ”We can have a perspective for the Norwegian Continental Shelf of 50 years of oil production and 100 years with gas.” 250 200 Annual production of oil and gas (mil. Sm3 o.e.) Long-term scenario 150 100 Closing the gap must to a large extent rely on development of new knowledge and technology 50 Decline scenario 0 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038 2042 2046 2050

5. Faster, more cost-effective exploration Reduce the average lead time from licence award to discovery to 3 years. Faster, more cost-effective development Reduce the average lead time from discovery to production to 4 years. Reduce the average CAPEX for new fields on the NCS to USD 3/boe. Reduced operating expenses Reduce the average total OPEX on the NCS to USD 3/boe. The environment Reduce CO2 emissions on the NCS by 30 % compared with today's level Zero harmful discharge to sea. Gas value chain Enhance value creation by 50% through additional/new export capacity and more cost-effective technology Exports Increase exports of Norwegian technology by NOK 50 billion, equivalent to sales of NOK 70 to 80 billion in 2010. Enhanced recovery 60% for large oil fields 80% for gas fields OG21 target figures

6. OG21: Focus Areas &Technology Targets Areas (TTA) • Zero harmful discharge to sea • 30%red. emissions to the atmosphere Environment • Stimulated recovery • Cost effective drilling Increased recovery • Real time reservoir management • Deep water floating technology Deep water • Long range transport of well stream • Seabed and downhole processing Small fields Gas value chain • Competitive gas production and offtake

7. Implementation of the OG21 Technology Strategy Exploration and Reservoir Characterisation will be handled through FORCE (Arild Haugen)

8. Technology is the key to realise new and demanding projects Statfjord/GullfaksIOR New technology Åsgard Lufeng Norne Troll 1999 Statfjordsatellites 1998 Sleipner A/ Sleipner West 1997 1996 Gullfaks Statpipe 1994 1993 1986 Time 1985

9. Recommendations from the OG21 TTA groups on new activities (1) • 30% Reduced Emissions to Air: • Develop technology that facilitates the use of CO2 for EOR • Fuel cells/ membrane technology for efficient power generation • Zero harmful discharge to sea: • Develop improved separation systems and water blocking techniques • Improve produced water cleaning technology • Competitive Gas Production and Offtake: • Develop technology that facilitates the use of CO2 for EOR • Develop compact technology for offshore LNG production www.og21.org

10. Recommendations from the OG21 TTA groups on new activities (2) • Seabed/ Downhole Processing: • Develop wet gas compression systems • Develop cost effective subsea separation systems • Long Range Wellstream Transport: • Develop improved prediction tools • Develop wet gas compression systems • Develop environmentally friendly flow improvers • Deep Water Floating Technology: • Develop harsh environment riser systems • Qualify polyester mooring systems for NCS Courtesy Aker Kvaerner

11. Recommendations from the OG21 TTA groups on new activities (3) • Stimulated Recovery: • Develop monitoring technologies to identify sweep efficiency. • Improved modelling capabilities regarding CO2 for EOR. • Real Time Reservoir Management: • Develop down hole sensors with improved quality and reliability. • Develop systems for integration of data form different sources. • Cost Effective Drilling: • Develop technology for low-cost exploration wells. • Develop new extended-reach drilling technology.

12. Implementation of the OG21 strategy • The OG21 strategy shall to a large extent reflect the technology strategies of the individual companies. • TTA groups were challenged to focus efforts through Joint industry projects: • The TTA groups were challenged to outline the 3 most important projects/activities to be performed within the TTA. • View of group members. • Proposals including possible participants, funding model, including relevant public funding, milestones and deliverables. • OG21 Board evaluation of proposals, For most projects the Lead party company were asked to organize the JIPs to have the projects started. • Optimistic view: up to 10 of the proposed JIPs will be started

13. OG21:New activities and funding Public Funding OG21 Technology strategy Governmental agencies Lead Parties Technology Target Areas(TTA) Research Council Norway Demo2000 Industrial Funding TTA White Papers Gap Analysis O&G companies Recommended activities JIPs

14. Export of technology Added value from gas - New areas Increased recovery Fields in production 2002 2010 Development perspectives for value creation from the petroleum industry Coordinated National R&D efforts Annual Value Creation