The great promise of exploration and production in Brazil was the backdrop for the largest international meeting held thus far by the American Association of Petroleum Geologists, as over 2,200 persons gathered in Rio de Janeiro in November.
The 2,279 attendees had 445 technical sessions to choose from as presentations ranged from new technology to the latest in geologic theories.
The Rio conference also attracted over 130 companies to the Rio Centro Convention Center as they exhibited state-of-the-art technology and data.
Attendees from 43 countries registered for the conference. Fifteen countries exhibited at the International Pavilion, the first to be held in South America and the second at a venue outside North America.
David Zylbersztajn, General Director of the newly established National Petroleum Agency, (ANP) was a special noon-time speaker for the conference's first day of session, and he set the tone for the conference with the announcement that the ANP would invite bids by year's end for Brazil's first licensing round.
He also said the invitation to bid will include some of the 46 blocks that the state oil company Petrobras was not allowed to retain.
Zylbersztajn, speaking in Portugese, told attendees the history of the Brazilian petroleum industry and its present metamorphosis into an open, competitive environment.
Zylbersztajn, who is the son-in-law of Brazil President Fernando Cardoso, drew much interest from the Brazilian media at the Rio meeting with his position of the head of the new government agency that determines the areas are offered as concessions in competitive auction as Petrobras eventually is privatized.
It was announced at the meeting that Petrobras was allowed by ANP to retain rights to explore and develop 397 of the 433 blocks it requested. Zylbersztajn said the first round bid request was expected to be available in late December, followed by a prequalification process in early 1999 with a yet-to-be-set spring deadline for bids. Zylbersztajn also said a second licensing round is likely in late 1999.
Renowned oil finder and international geologist Roy M. Huffington also presented a special noon session, noting that an entrepreneurial spirit can create new opportunities for both explorers and the countries in which they explore.
Huffington, an independent geologist from Houston, expanded his business to Indonesia in 1968 and is credited for successes of a magnitude that vaulted Indonesia into a producing country large and important enough to become a member of OPEC.
While acknowledging that current times may be difficult for many in the profession, he said opportunities remain -- often in unlikely places.
Huffington repeatedly cited technological advances as the crucial element for geologists involved in exploration.
"Constant and rapid development (of technology) has helped us to be better," he told the noon audience. "Continually improving computer technology and other advances will help to tell us more about where the oil is."
Still, he said, technology can do only so much. "One must have a fine understanding of the geology and geophysics" of a play to increase chances of success, he said.
Huffington agreed with most experts who say the industry will go through some difficult times in the short term.
"U.S. independents are a little shaky right now with the price of oil, and they're all holding back just a little," he said. "The price (of oil) will range between $10-$17 a barrel for the next year or two, because there is a tremendous amount of crude available."
But Huffington mostly had words of encouragement and guarded optimism for geologists, encouraging them to know their geology, know the technology and be smart in their exploration ventures.
Some of his observations:
- He expects wells in the Gulf of Mexico will soon be drilling in water depths of 10,000 feet or more, which "opens up the basin of the Gulf of Mexico.
"Of course, all of this will depend on the price of oil and gas," he added.
- Established areas such as Saudi Arabia will "need outside help to develop resources" due to the combination of current low prices and regional economic and political turmoil.
- "I do not see us running out of oil and gas," he said. "There are so many unexplored regions -- as long as the price stays low, explorationists will keep busy."
- The cost of exploration will continue to increase, due mainly to the increased efforts in hostile areas.
- Bigger exploration costs mean smaller independents will survive mainly by becoming involved in joint projects that require local expertise.
- He sees nuclear energy as "coming back into greater use in the coming century."
- In the future the world will not have oil and gas companies, but energy companies. (This was said before the industry mega-mergers of November and December were announced.)
- Smaller independents can have success in international areas, but that success may rely on political and economic stability of the region, their knowledge of the region's geology and, on top of that, "timing is the most important thing of all."
- For geologists, the future isn't as bleak as some believe.
"Because of the speed of development of computers, I think that soon geophysics will be used for direct oil finding," he said. "But, you'll also need a good knowledge of the geology.
"We (geologists) are going to have plenty of work -- there's a lot of things geologists will be able to do, (but) it won't be in the old way of finding oil."
Exploration of the universe alone makes the future bright for tomorrow's geologists, he said, and "looking for water may be more valuable than looking for oil in many ways.
"Interpretations will still be needed."
The Opening Session, which included a video of the Brazilian countryside and culture, featured a welcome by conference general chairman Joel Mendes Renno, head of Petrobras; general vice chair Nahum Schneidermann, of Chevron; and technical program co-chair Pinar Oya Yilmaz, of Exxon. Technical program co-chair Marcio Rocha Mello, of Petrobras, also was a presenter as well as a recipient of the AAPG Distinguished Service Award.
Hans Krause, of Caracas and formerly of PDVSA and Maraven, also received the AAPG Distinguished Service Award.
AAPG Special Commendations were awarded to Celso Fernando Lucchesi, executive general manager of Petrobras Exploration and Production; Raul Mosmann, international consultant in Rio and former Petrobras exploration executive; and international consultant Edward G. Purdy, of London.
The Brazilian Association of Petroleum Geologists, host for the conference, awarded its Special Commendation Award to the late Rodi Avila Medeiros, formerly of Petrobras; Antonio Carlos Sobreira de Agostini, director of exploration and production for Petrobras, received the Distinguished Achievement Award; and Carlos Walter Marinho Campos, formerly of Petrobras, received the Distinguished Geological Achievement Award.
The conference also featured geologic field trips to the Reconcavo Basin, the Tapajos River in the Amazonas Basin, the Coral Reefs of the Abrolhos area, the Sergipe/Alagoas Basin and the Parana Basin and Iguassu Falls.
Latin America-area participants in the International Pavilion included Bolivia, Colombia, Costa Rica, Nicaragua, Falkland Islands and Trinidad and Tobago.
African countries exhibiting at the International Pavilion were Equitorial Guinea, which announced at the conference a deep water licensing round with broad terms available; Algeria, Gabon, Namibia, South Africa, Ghana and Morocco.
Other international exhibitors included Latvia and Portugal.