MEOs 2013: Middle East Oil Gas Show and Conference in Bahrain

Manama, 10 March 2013: Press Conference held on March 7th concerning the event of MEOs – Middle East Oil Show and Conference 2013.

Speakers:
Abdulaziz Al Abdulkarim, MEOs 2013 Chairman, Saudi Aramco
Anwar Salman Khalaf, National Oil and Gas Authority (NOGA, Bahrain)
Fawzi Al Shebabi, Arabian Exhibition Management

 Abdulaziz Al Abdulkarim: The effort of the executive committee and of the several committees that have been working together for the last two years was to prepare a heavily condensed technical program that supports all disciplines of oil and gas. We are focusing on oil exploration, drilling and production activity, unconventional resources, and environmentally greener petroleum among others.
The conference will have more than 36 technical sessions; we have more than 200 papers that we will be going through throughout the duration of the conference. The main opening will be on Sunday, of which the highlight will be the Minister of Oil of Bahrain giving the opening speech on Sunday afternoon.

What are the main differences between this year’s event and the last one which took place in 2011?

Abdulaziz Al Abdulkarim: The Middle East Oil Show happens every two years and as a matter of fact perhaps this is a good opportunity as it is back to back with the GEO (The Middle East Geosciences Conference and Exhibition). One year the GEO takes place and the following year the MEOs is held. The GEO focuses on exploration activity and the MEOs concentrates on petroleum engineering activities. Although here we cover both of them, the biggest difference that I can see is that this year we have a greater number of papers being presented. The technical focus for this year is the transformation for future energy; that is the theme for this conference. The Executive panel will hold a discussion on Sunday which will focus on preparation for the future, how we are transforming our oil and gas energy for the future.
Another new addition for this kind of conference is that we have introduced a new session which will introduce the finance sector to the conference. There will be “Industry Breakfast Session: Financing the Change” on Tuesday, hosted by H.E. Abdullatif A. Al-Othman, Governor and Chairman of the Board of Directors at Saudi Arabian General Investment Authority (SAGIA). The focus of this breakfast session will be to discuss the investment for oil and gas over the coming 20 years; we will bring together several investors interested in oil and gas, bankers, oil and gas executives and oil and gas officers.

The focus is on expansion activities with participation of bankers – would that mean that this is the focus of the conference?

Abdulaziz Al Abdulkarim: In that particular session, absolutely. The same applies to the Executive panel session; we are looking towards the future, keeping in mind that oil investment is expanding right now. If I can bring the attention to the Gulf, I know that Saudi Aramco is currently expanding their exploration activity to cover new territories such, including the Red Sea. In order to maintain the oil and gas production level and to support the oil economy, the rest of the region in the Middle East needs a lot of emphasis on investment to support the industry.

Anwar Salman Khalaf: Also with this year’s program we are focusing on the community involvement; bringing in high school students and teachers; during at least one of the days in order to introduce this science and industry to the new generation. It was noted that interest in geoscience and petroleum related disciplines has subsided of late, so this is one of the objectives of this year’s MEOs.

Abdulaziz Al Abdulkarim: On the first day, Sunday, before the conference opening, we have a workshop, a full day workshop, that is focused on how to promote women in oil and gas leadership and in support of men in this industry, at the same time bringing the young talent to the workshop, and during the following educational days using their talent to introduce the new generation to the oil and gas industry. Several executives will be speaking in those workshops to promote the oil and gas industry and to encourage the younger generation – the students – to consider this industry. The oil and gas industry right now is making a huge effort to make sure we are protecting the environment and we want to promote that kind of industry and awareness.

What do you think are the main industry challenges and how is the conference going to resolve some of these?

Abdulaziz Al Abdulkarim: I think one of the main challenges particularly in this region is to develop the younger generation, engineers and geoscientists to support the oil and gas industry. Currently there is a lot of emphasis within the GCC countries and outside the GCC countries as well to promote higher education in these fields, and in a lot of technologies. Technology is the biggest support for the main challenges of maximising the oil fields and gas fields. We have managed to increase the recovery factors of the oil and gas fields by introducing new technologies that include horizontal drilling and multilateral drilling. I think that with this conference we will become more aware of technologies, with the participation of several international companies such as ExxonMobil, Chevron, Baker Hughes or Schlumberger. We also have national oil companies from Middle Eastern countries like Saudi Arabia, Qatar, United Arab Emirates and Kuwait and they are here collaborating and discussing some of these challenges. With the latest technology we can remove some of these challenges.

Anwar Salman Khalaf: There is a lot of oil in the ground, the challenge is how to use it commercially so let’s use the program and the industry breakfast to look at how to manage the oil industry; this is one of the difficult challenges, some of the analysts forecast that we will have to spend about US $15 trillion over the next 10 to 15 years which is an enormous amount of money.

Why have you introduced the industrial breakfast session? It is going to happen for the first  time in the whole history of MEOs.

Abdulaziz Al Abdulkarim: I think one of the main drivers for having new sessions with investors – which supports the point made about the challenges for the future – is to develop complex reservoirs. They dictate investment, technology and the development of human resources. By having all these together, so that the investors and bankers come here with engineers and technological providers, I am sure the challenge of increasing the recovery from these reservoirs underground will be eased. You can see with the current trend of shale gas in the USA, technology was the biggest supporter or factor in increasing the recovery, as a matter of fact now they are increasing by an enormous amount – even trillions of cubic feet (tcf) of gas resources.

Anwar Salman Khalaf: The cost of development is going to be higher than the costs that we have enjoyed over the last decade, so economy is the key: how to produce oil and gas commercially, how to reduce costs and how to maximise the recovery from the reservoirs.

You mentioned that the new feature of this conference is going to be the introduction of investment banking. Do you see a reduced appetite of traditional western banks and investment in the Middle East, or do you see the renewal or the emergence of local appetite to invest in these oil and gas projects?

Anwar Salman Khalaf: No we do not see a reduced appetite, in fact the oil and gas industry is not short of money right now. The forecast of funds that is required over the next few years is a win-win situation. The organisers of the MEOs conference 2013 have an objective that is to get the two communities together, so that the financial participants can look at what is in it for them and this conference is to encourage the collaboration between everyone. I think this is what we need for the future for sure, but to respond to your question, here in Bahrain we don’t see reduced investment appetite.
We have projects that will cost billions of dollars and there is no problem in financing them.

Will there be any discussion at MEOs about shale gas development in North America, China, Europe and the effect that it might have on the region’s oil industry?

Abdulaziz Al Abdulkarim: We have one panel session dedicated to gas challenges. There are several speakers from international companies, service companies and national oil companies.
Definitely, shale gas is a major breakthrough and there is a lot of technology being implemented –  hydraulic fracturing for protecting the environment in that industry and maximising the shale gas reservoirs. There is a lot of emphasis in the Middle East to utilise the successful technologies and to use the best practices. This will all be discussed in the conference.

Anwar Salman Khalaf: It will not be possible to copy what is going on in the USA here but the focus of the conference will be on the unconventional, in the US their call it shale gas, here we may call it tight gas reservoirs, but the idea is the same. It is unconventional because it is not a straight forward process; it requires a lot of treatment before you can mobilise the molecules.

You mentioned earlier that there is a foreseen increase in investment that will be required in order to extract oil, and for the projects in the future, do you have any figures of how much you think it is going to be?

Anwar Salman Khalaf: These are analyst’s forecasts. The forecast that I mentioned earlier was that over the next 15 years the industry will require 15 thousand billion US dollars. These are only forecasts mind you but the idea and concept is that huge funds will be required. The costs of production as we move more and extract more out of the reservoirs compared to the grassroots exploration are going to increase as production increases. The amount of money you have to put in to produce oil will increase. The concept is very clear, whether it is going to be 15, 14 or 10 trillions of US dollars – these are only forecasts.
We will need an increased amount of production. The rate of reserves from grassroots exploration has subsided. Almost all professionals and analysts foresee that incremental reserves from improving the recovery factor from the producing field is going to take over.

Abdulaziz Al Abdulkarim: The average recovery factor worldwide is in the range of 23-35% from existing fields; the industry’s challenge is how to increase that 35% into 60 or 70 or 80% recovery factor. The challenge for the engineers, geoscientists and human developers now is to look at how we can increase that recovery factor and we have already proven with some of the existing fields that you can increase the recovery factor to between 60 and 65%. Looking at that by itself; if the industry manages to increase by a 5% factor it adds ten billions of barrels to the industry.

About MEOs 2013:

Fawzi Al Shebabi: Here is some information about the MEOs 2013. The exhibition is organised by Arabian Exhibition Management which is a member of the Allworld Exhibitions. The exhibition itself covers more than 14,000 m2. We have about 300 companies participating from 30 countries. The organiser (Arabian Exhibition Management) has also organised two other petroleum events: GEO and PetroTech.

Is there the same amount of companies participating as last time?

Fawzi Al Shebabi: It is the same number as last time. There are some different companies; there are a few new companies that are participating for the first time. There are always a few new companies.
We have two halls: Hall 1 and Hall 2. The new thing in Hall 2 is the ePoster presentations that we talked through with the manager. This is the first time we are using the Hall 2.

There is quite a lot more interest from China this year, isn’t there?

Fawzi Al Shebabi: Yes. Of course we have support from all the national oil companies and service companies. We have a lot of individual companies that are coming in from Saudi Arabia such as Al Abdulkarim holding company (trading), Rawabi holding (trading), Saudi Makamin Oil and Gas Services etc.

Abdulaziz Al Abdulkarim: This is one of the main objectives as a matter of fact for me: how to bring the oil and gas industry into the local economy and how to expand that. You can see within some of the oil services, several companies have started to develop their expertise within the Gulf and you can complement it with the international oil fields. There is huge expansion going on.
I want to thank you very much, I appreciate all the effort. As I mentioned before the Executive committee and the Technical committee spent almost 2 years developing a strong technical agenda. Our objective is to bring one of the most successful conferences and exhibitions into the Middle East, and Bahrain is proving to be one of the most successful places. We have been running this kind of a conference since 1979 and we are looking forward to the success of this conference. We have all the resources to complement it; I want to thank the Kingdom of Bahrain and the people of Bahrain for promoting this kind of industry and the oil and gas conferences in particular. I would like to thank the Prime Minister for supporting this conference. We are looking forward to participation from all aspects of the industry – oil companies, government agencies that support the oil and gas program, the service industry and all the local companies that drive the oil and gas industry.
We are looking forward to a very successful conference.

Fawzi Al Shebabi: The exhibition opens on March 11th (Monday) and will finish on March 13th.

Abdulaziz Al Abdulkarim: The official opening ceremony will take place on Sunday at 4PM with the main speaker H.E. Shaikh Ahmed bin Mohammed al Khalifa (Minister of Finance and Minister in charge of Oil and Gas Affairs of Bahrain). We also have Mr. Egbert Imomoh (2013 SPE President) who will be addressing the opening session.
Immediately following that we have the executive plenary session with 5 executive representatives of the oil industry. The first speaker will be Mr. Amin Nasser (Senior Vice President of Saudi Aramco), the second speaker is Mrs. Sara Ortwein (President of ExxonMobil Upstream Research), the third speaker is Mr. Paal Kibsgaard (CEO of Schlumberger), the fourth speaker is Mr. Sami F. Al-Rushaid, (Chairman and Managing Director of Kuwait Oil Company) and finally the fifth speaker is Martin Craighead (CEO of Baker Hughes).
I shall see you at the opening ceremony. Thank you very much.