JLL Energy Forum on October 24

[dan_s]

I attended the JLL Annual Energy Forum this morning along with over a dozen EPG members.

The keynote speaker was Dr. Nansen Galeri, President & CEO of QRI Group: https://www.qrigroup.com/

Dr. Saleri is the former Chief Reservoir Engineer for Saudi Aramco. He once reported to EPG member Lou Powers: http://theworldenergydilemma.com/about-the-author

He talked about the potential of Artificial Intelligence ("AI") to have a significant impact on the upstream oil & gas industry.
> AI is getting smarter.
> It should be applied to the most expensive areas on the business
> Global crude oil production (black oil) is now 93 million barrels per day
> Consumers (nations, business and individual people) want "Clean BTUs" and demand for BTUs (energy) will go up each year for decades.
> Oil, gas and coal will provide most of the energy for decades to come and even coal can produce "clean BTUs". < We have the technology to do this today.
> In November, 2017 wind moved ahead of coal for producing electricity in Texas. Texas has the most wind energy.
> "The Oil & Gas Industry should be the leader in cleaning up the environment."
> Pollution from oil, gas and coal is much lower today than it was ten years ago, but there is lots more work to be done.

Saudi Arabia:
> Their Ghawar Field is still the largest oilfield in the world (by a wide margin).
> Ghawar was discovered in 1950 and today it is producing ~5 million BOPD, which compares to the Permian Basin that is producing ~3.3 million BOPD.
> "Coning" not the risk that it used to be in Ghawar thanks to Maximum Reservoir Contact ("MRC") wells used to develop the field. MRCs are horizontal wells "on steroids".
> Saudi Arabia produces about 10 million BOPD. It can increase exports, but production will likely stay around 10 million BOPD.
> Raymond James supply/demand model shows Saudi Arabia producing 10,675,000 BOPD in 2019.

Artificial Intelligence has lots of potential in the upstream M&A area.
> Analysis of a target company that used to take six months by a team of engineers & geologists can now be done in a few days.
> Large databases (millions of well lever data) have been built
> Energy Industry upper management MUST learn the potential of AI for their companies.
> The management teams that figure out how to use AI will have the most successful companies.
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MY TAKE: The upstream oil & gas industry is extremely capital intensive. Several hundred $Billion will be spend to develop the Permian Basin. Efficiency gains from utilizing AI or "Big Data" can make BIG DOLLAR differences in this business.