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IEA forecasts unrelenting demand for energy

Despite current recession-driven contractions in energy demand and pricing, a new report by the International Energy Agency (IEA) forecasts that the long-term energy scenario is one of steady growth. The report expects that world oil demand will rise to 106 million bbl/day by 2030, an increase of 24% from 2007’s 84 million bbl/day. Meeting overall energy demand will require more than US$26 trillion. While the power sector will account for $13.6 trillion (52%), most of the rest, according to the report, will go to oil and gas, mostly for exploration and development.

The IEA says that the entire projected increase in world oil demand will come from non-OECD countries, with 80% coming from China, India and the Middle East.

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At IADC Annual Meeting, drillers outlook for 2009 is mix of caution, optimism

Despite the global financial crisis and the election of a Democratic president just a few days earlier, IADC kicked off its 2008 Annual Meeting on 6 November in Scottsdale, Ariz., amid a general mood of cautious optimism. In the Drillers Outlook session, executives from Hercules Offshore, Precision Drilling Trust and Transocean provided insight into the volatile market and key issues contractors face.

John Rynd, Hercules CEO and president, noted the drilling industry has dealt with reduced CAPEXes many times in the last couple of decades. By now, we know how to deal with that and make it work. Experience has also taught us how to work around declining commodity prices.

However, we’ve not had to deal with a global financial crisis, and that is a great unknown causing this industry a lot of concern. “Given that, I think everyone will go into 2009 being very, very conservative with their cash,” he said.

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Devon's Rick Mitchell: Plenty of growth opportunities ahead

 Delivering the keynote address on the opening day of the IADC Annual Meeting on 6 November, Rick Mitchell of Devon Energy called for more collaboration among industry sectors and an increased focus on environmental and safety performance, as well as improvements in enabling technologies to help the development of difficult fields. He also discussed Devon’s current activities and future plans, such as with the Barnett Shale on land and the Lower Tertiary plays offshore.

Devon’s 2008 plans called for the drilling of about 2,400 wells worldwide, including more than 800 horizontal wells. North America onshore certainly remains a key operating area – taking up about 57% of 2008 capital allocation – but projects in the Gulf of Mexico, Canada, Brazil and China also are strategically important.

“For Devon, it’s really more about asset quality,” Mr Mitchell said. That includes strong land positions and large concentrated assets such as the Barnett Shale and East Texas’ Carthage area. It also includes exposure to emerging plays like the Haynesville Shale and the ultra-deepwater Lower Tertiary plays.

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2009 IADC chairman Claus Hemmingsen calls for improved environmental integrity

 There has been an increasing focus on the “E” in HSE, and the industry should take a more proactive stand on improving our environmental performance, said Claus Hemmingsen, Maersk Drilling CEO and the incoming chairman for IADC.

Speaking at the Annual Meeting on 6 November, Mr Hemmingsen noted that the drilling industry has “a long history of environmental awareness” and that “reduce, reuse and recycle” has become a common way of thinking.

The industry’s efforts to safeguard the environment have been mainly focused on three areas – equipment, systems and culture (or people).

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National oil companies: the new face of drilling contractors

The faces of drilling contractors’ clients are changing, and we must learn to adapt to new cultures, business styles and risk management strategies, speakers said during a presentation at the IADC Contractors & Risk Management Conference on 29 October in Houston. Alex Cestero, deputy general counsel-business affairs for Pride International, kicked off the presentation, titled “The Advent of National Oil Companies: Risks, Opportunities, Idiosyncrasies & Practical Tips on Contract Negotiations & Contract Management.”

An increasing percentage of the world’s oil and gas production and reserves are controlled by national oil companies (NOCs). In fact, it’s estimated that by 2005, NOCs had about 50% of global oil production and over 70% of reserves, and “Top 10” lists measuring reserves/production don't include many – if any – independent oil companies (IOCs). “Fundamentally, who you’re dealing with has changed and will continue to change at an accelerated rate,” Mr Cestero said.

When considering operations in unfamiliar, foreign countries, one fundamental question that has to be asked early on is, “Do we want to work where the NOC is taking us?” Issues such as the political climate of the country and the relationship between that country and your home country must be considered. It’s also important to look at nationalizing/privatizing trends, local content requirements and Foreign Corrupt Practices Act compliance, he said.

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DC readers tell us their US presidential preferences

By Mike Killale, Editor & Publisher

Your favorite for the next president of the United States depends in large part on your geography. A shamelessly unscientific survey of DC’s readers worldwide by eNews from DrillingContractor.org found topsy-turvy results between North American readers and those elsewhere in the world.

However, a strong minority (averaging 14% globally) suggested that neither John McCain nor Barack Obama is a good choice. Or, as the bluntly worded survey expressed it, “A donkey would be better.” The proportion of Donkey voters was actually highest in Europe, followed closely by the USA, where some one in six respondents demurred from championing either of the two major candidates.

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Shell to accept WellCAP for worldwide training

IADC WellCAPIn a move that could greatly benefit drilling contractors, Shell International Exploration & Production has certified the use of IADC’s WellCAP as an acceptable form of well control training worldwide.

“The latest revision of the global Shell Pressure Control Manual now acknowledges WellCAP as an acceptable well control certification for both Shell company and contractor supervisors,” said Jeff Campbell, senior staff training specialist for Shell EP Americas.

Mr Campbell, currently a member of the IADC WellCAP Review Panel, was a member of the internal team at Shell responsible for  scheduled updates of the company’s well control manual and certification of well control training programs.

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Vote to be held on WellCAP changes

Changes to the WellCAP instructor qualifications criteria have received worldwide review and will undergo a vote for approval at the next meeting of the IADC Well Control Committee, scheduled for 12 November, according to committee chairman Mark Milne of Transocean.

If approved, the changes will impact new instructors, instructors seeking upgraded approval status, and instructors seeking reinstatement as approved instructors. The proposal also includes requirements for maintaining approved instructor status.

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