Prospecting in new regions key to oil growth-Shell

Reuters, 05.06.03, 5:38 PM ET

HOUSTON, May 6 (Reuters) - Oil companies will have to prospect in new regions while developing new technologies to maximize production if they hope to meet exploding energy demand in the coming decades, Royal Dutch/Shell's exploration and production head said on Tuesday.

Drastic declines in oil and gas fields in the United States and United Kingdom are making geographic diversity crucial to meeting that demand, Shell Exploration and Production chief executive Walter van de Vijver said.

"That will force us to go into areas we haven't been before but also will force us more and more into OPEC countries while seeing some major countries ... that will be the real growth areas of the future," van de Vijver told an audience of oil executives at the Offshore Technology Conference in Houston.

By 2030, Shell <RD.AS> <SHEL.L> sees Russia as the largest growth prospect in terms of oil production, followed by Kazakhstan, Mexico, China, Azerbaijan and Angola. Iran has the largest growth prospects for natural gas, followed by Qatar, Saudi Arabia, Russia, Nigeria, Venezuela and Norway, he said.

But while the industry will shift money and effort into new producing regions, it must also spend the money to develop new technologies to maximize production capabilities, he said. A key example of that is in deepwater drilling, which is one of the last frontiers left in the Gulf of Mexico's fast-declining fields. Deepwater drilling is expensive by dint of the tremendous technological resources required.

Most players have deepwater reserves that are four times their current annual production, so bringing the production online is critical, van de Vijver said.

"It is still going to be very difficult for the future to be able to deliver those reserves and the technology required to do so," van de Vijver said.

Oil companies must also develop technologies to help them increase their returns from declining wells, he said.