The technical and scientific progress in exploration-production: impact on reserves and costs
by Nathalie Alazard, Daniel Champlon
International Journal of Global Energy Issues (IJGEI), Vol. 10, No. 1, 1998

Abstract: From the 1970s, the petroleum industry made an increasing use of R&D in the upstream sector that lived until then in a technically routine way. The technical and scientific progress that followed had an impact on reserves and costs. In the 1970s and at the beginning of the 1980s, the main objective of R&D in exploration-production was to increase reserves outside of the traditional zones of concentration. At that time, the high price per barrel stimulated activities, imaginations and led to the development of ambitious projects. In consequence, the share of non-OPEC countries (excluding the CIS) in world oil production increased. Today, technical and scientific progress can even provide a great deal to the increase and renewal of reserves. In the future, petroleum discoveries will become smaller and smaller, and will be situated in more and more geologically complex zones. So, the effective continuation of R&D effortsin exploration-production is necessary to lead to the development of techniques, methods and tools that will facilitate access to the reserves of tomorrow. In the 1980s, the technical progress had been a factor that worked in favour of this cost decrease, as well as being a factor that influenced the decrease of interest rates and the reduction of day rates and profit margins of the petroleum equipment and service industry. Today, considering the weakness of the price of oil, costs cutting remains de rigeur, and it must be admitted that future costs cutting will continue largely coming from new technologies and improvements of scientific knowledge. A goal-oriented R&D policy, both when it aims to renew reserves and when it tries to cut costs, therefore remains justified. The problem today is to know how this R&D will be organized in the future, in a context of decreasing R&D expenditures.

Online publication date: Wed, 09-Jul-2014

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