Tough Financial Future in Offing?

APPEX Forum Sees Demand Growth, Price Crunch

Although APPEX is designed to bring together prospect generators and potential buyers, it is fundamentally about the business of exploration and production -- and that's why the conference's exploration focus is being expanded this year.

A special forum, "Perspectives on the Upstream Business of Oil and Gas," will be offered Sept. 9 at the George R. Brown Convention Center in Houston as the unofficial kick-off to the three-day APPEX event.

IHS Energy is sponsoring the forum, which will include a reception following the presentations.

The forum is an outgrowth of a Petroleum Industry Perspective briefing that IHS has conducted annually in Houston and London, and was introduced at last winter's London APPEX.

Officials figured that what was good for London will be good for Houston, too.

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Although APPEX is designed to bring together prospect generators and potential buyers, it is fundamentally about the business of exploration and production -- and that's why the conference's exploration focus is being expanded this year.

A special forum, "Perspectives on the Upstream Business of Oil and Gas," will be offered Sept. 9 at the George R. Brown Convention Center in Houston as the unofficial kick-off to the three-day APPEX event.

IHS Energy is sponsoring the forum, which will include a reception following the presentations.

The forum is an outgrowth of a Petroleum Industry Perspective briefing that IHS has conducted annually in Houston and London, and was introduced at last winter's London APPEX.

Officials figured that what was good for London will be good for Houston, too.

"At the London meeting in February, IHS officials, who provided an overview of trends and activity in a specific region, were paired with high-level industry executives who discussed their perspective on the region," said Deborah Sacrey, co-chair of the upcoming Houston APPEX.

"The forum was extremely successful, and we felt that the same type of forum focusing on regions important for U.S. companies would be a worthwhile addition for the Houston APPEX," she said.

"The opportunity to learn what is going on around the world, where the major discoveries have occurred and what are the future trends in exploration and production is a valuable addition to the conference," she added.

"IHS brings tremendous insight and analysis of trends in virtually all of the significant oil and gas basins in the world," co-chair Paul Hoffman said, "and our goal here was to couple the perspective that they bring with observations, commentary and discussion from key industry executives in many of these various basins around the world."

"This will be a very worthwhile day."

A Closer Look

The forum will address key trends, business issues, strategic challenges and future directions in two critical exploration and production arenas -- international exploration and production, with a focus on deepwater developments and North American natural gas, according to Pete Stark, IHS' vice president of industry relations.

Chaired by Sacrey and Hoffman, the program features seven sessions. Morning talks will key on international exploration and production outlooks, including a comparison of major deepwater developments. Afternoon talks will focus on North American natural gas.

IHS officials will outline the trends, outlook and major issues expected to impact industry directions for each region through the balance of this decade. The industry executives for each session will give their insights and strategies to deal with the issues.

Following each regional presentation will be a 20-minute discussion period, which organizers hope will stimulate ideas.

"Going forward, the industry faces some challenging issues and paradoxes," Stark said. "For instance, if you look at worldwide oil supplies, we see more oil coming into the market over the next five years than the market demand growth can easily absorb. So, we anticipate a period of chronic oversupplies and waning worldwide exploration discoveries, while oil demand is expected to grow.

"We want to get this issue on the table," he continued. "Associated market volatility and bias toward low oil prices could further strain operators' ability to finance projects and influence industry's directions for the balance of this decade."

Another paradox organizers plan to address is North American natural gas.

"Additional drilling alone in key mature gas producing provinces -- like the Gulf of Mexico and western Canada -- no longer appears to be adequate to meet demand forecasts," Stark said, "and at the same time U.S. energy policies essentially inhibit and restrict access to new prospective areas for exploration.

With the forum, Stark hopes to spark a "dialogue" to help clarify an understanding of the issues, and to generate ideas for addressing the problems.

"This is not a simple set of issues that we are facing," he said, "and it is critical that all facets of the industry and government work to find solutions.

"This forum, and APPEX in general, is an opportunity for AAPG to focus on the business aspects of the petroleum industry versus the geo-technical focus of the annual meeting," he added.