COMMENTS EDITORIAL COMMITTEE

J.C. Cunha, Drilling Manager,

Ecopetrol America, Chairperson
Francisco J. Alhanati, Director E&P,
C-FER Technologies

Optimism Reigns Syed Ali, Research Advisor, Schlumberger

Renzo Angeles,
Senior Research Engineer, ExxonMobil
Mohammed Azeemuddin, Research
John Donnelly, JPT Editor Scientist-Rock Mechanics, Chevron
Baojun Bai, Associate Professor of
Petroleum Engineering, Missouri University
of Science and Technology
Ian G. Ball, Director, Subsea Domain
This year promises to be another one of healthy upstream
Luciane Bonet, Senior Reservoir Engineer,
spending. Perhaps the only thing that can derail the optimistic Petrobras America
outlook is the global economy. Paul D. Cameron, Well Intervention Advisor,
BP Exploration
Strong oil prices will lead 2012 worldwide E&P spending
Robert B. Carpenter, Senior
to a record high of USD 598 billion, according to a new report Advisor–Cementing, Chevron
by Barclays Capital, which annually tracks oil and gas indus- Simon Chipperfield, Team Leader Central and
Amadeus Gas Exploitation Development, Santos
try upstream spending. That reflects a 10% increase over 2011
Gerald R. Coulter, President, Coulter Energy
E&P spending, which also set a record, according to the survey
Martin Crick, Product
of 350 oil and gas firms. But Barclays notes that the rate of growth will be slower than Champion-Interpretation, Schlumberger
last year’s because of the global economic uncertainty that is hanging over most indus- Martyn J. Fear, General Manager Drilling
and Completion, Husky Energy
tries. If that uncertainty were to disappear, the E&P forecast would appear very con-
Emmanuel Garland, Special Advisor to the
servative, the report said. HSE Vice President, Total Exploration–Production
Spending is forecast to increase by 8% within North America and by 11% outside Robert Harrison, Consultant Petroleum
Engineer, Soluzioni Idrocarburi
of it. The increase in spending is across the board, with strong increases in the former
Delores J. Hinkle, Director, Corporate
Soviet Union and CIS countries (42%), Latin America (21%), and Africa (14%), and Reserves, Marathon Oil
smaller increases in Europe and the Middle East. Latin America is seeing aggressive George W. Hobbs, Director, Strategic Chemistry
E&P spending by Brazil’s Petrobras, Colombia’s Ecopetrol, and Mexico’s Pemex. Mex- John Hudson, Senior Production Engineer, Shell
ico is trying to reverse rapidly declining production rates and Colombia is trying to Gerd Kleemeyer, Head Integrated Geophysical
Services, Shell
jump-start an upstream profile that has largely languished since the mid-1990s. Brazil
Gregory Kubala, Global Chemistry
is forging ahead with its promising pre-salt development. Other large upstream spend- Métier Manager, Schlumberger
ers this year are expected to be ExxonMobil, PetroChina, Lukoil, and Chevron. Cam Matthews, Director, C-FER Technologies
The survey said that oil and gas companies were basing their 2012 capital spend- Casey McDonough, Drilling Engineer,
Chesapeake Energy
ing budgets on an average oil price of USD 87 a barrel for West Texas Intermediate and
Stephane Menand, Managing
USD 98 a barrel for Brent. Global benchmark Brent was set to finish 2011 at its highest Director, DrillScan US
annual average price, in both real and nominal terms, since the modern oil industry John Misselbrook, Director Global Coiled Tubing,
BJ Services
began, according to an IHS Cambridge Energy Research Associates analysis released
Badrul H Mohamed Jan, Lecturer/Researcher,
just before the end of the year. Continued strong global demand, concerns about sup- University of Malaya
ply constraints in some regions, and higher production costs all combined to support Alvaro F. Negrao, Senior Drilling Advisor,
the record-level price. Brent was expected to average USD 111/bbl last year. Woodside Energy
Shauna G. Noonan, Staff Production
In short, the supply/demand balance and higher labor and material costs are driv- Engineer, ConocoPhillips
ing the highest prices. Upstream production in challenging areas is also a factor. Drill- Karen Olson, Completion Expert,
ing in North America should continue to be strong, although low natural gas prices Southwestern Energy
Michael L. Payne, Senior Advisor, BP
have caused companies to shift away from gas and toward liquids plays. Companies
Mauricio P. Rebelo, Technical Services Manager,
responding in the Barclay’s survey said that the biggest factor in determining their Petrobras America Inc.
North American activity was oil prices, followed by gas prices and then cash flow. John D. Rogers, Vice President of Operations,
Spending growth in North America is forecast to last until at least 2015. JPT Fusion Petroleum Technologies
Regis K. Romeu, Petroleum Engineer, Petrobras
Jon Ruszka, Drilling Manager, Baker Hughes
Hisham N. Saadawi, VP Engineering, Abu Dhabi
Jacques B. Salies, Drilling Manager,
Queiroz Galvão E&P
Helio Santos, President, Safekick
Luigi A. Saputelli, Senior Production Modeling
Advisor, Hess Company
Jerome J. Schubert, Associate Professor,
Texas A&M University
Brian Skeels, Emerging Technologies
Manager, FMC Technologies
Erik Vikane, Manager Petroleum Technology, Statoil

To contact JPT’s editor, email jdonnelly@spe.org. Scott Wilson, Senior Vice President, Ryder Scott

16 JPT • JANUARY 2012