Rising costs and a lack of resources are hampering the oil and gas industry's efforts to meet increasing global demand for petroleum products, industry chiefs said June 12. The chairman of U.S.-French oil services group Schlumberger, Andrew Gould, told the Asia Oil and Gas Conference that producing organizations were facing strains in a number of areas, including a lack of expertise.
"We need to recognize that our industry is suffering from a long period of under-investment with the result that we have only a limited capacity to respond," Gould told industry delegates. Problems include limited investment opportunities in reserves which are dominated by national oil companies, as well as a lack of construction capacity for equipment for new projects, he said.
But the real constraint to increasing supply is a lack of expertise, he said, citing dwindling numbers of petroleum engineer graduates in the U.S. from 1,500 in 1984, to just 260 in 2000. "The only serious constraint to a smooth, steady increase in new supply is in the availability of people with proper experience and sufficient technical education," he told the conference.
Hassan Marican, president of Malaysia's national oil company, Petronas, said that rising costs involved in finding, developing and producing oil could lead to projects being delayed or deferred. Hassan said steel prices had shot up over the past few years and supply was also tight. There was a shortage of drilling rigs and other specialized equipment due to increased activity in the industry. "These shortages will continue for a while," he said.
Copyright Agence France-Presse, 2006