1. Oil & Gas in the 21st Century The role and status of OG21 Presentation at the Force seminar “New Strategies in Petroleum Research” 13. May 2004 Per Gerhard Grini www.OG21.org

2. 2 OG21 – Oil & Gas in the 21st Century Main Objectives Develop new knowledge and technology to ensure economic and environmentally sound development of the resources on the Norwegian Continental Shelf --------- Strengthen the industry’s competitive advantage in a global market by developing new and attractive technology products and systems

3. 3 OG21 Board 2003-2005 Terje Overvik, Statoil (leader) Alfred Nordgård, Norske Shell Jens Hagen, Norsk Hydro Manfred Budny, Esso Norge Rune Strømquist, Demo2000 (ABB) Jarl Arve Kosberg, AkerKværner Åsmund Bøe, Schlumberger Ann Christin Gjerdseth,FMC Kongsberg May Britt Myhr, SINTEF Petroleum May Britt Hägg, NTNU Karin Refsnes, Norges Forskningsråd Bente Nyland, OD Jostein Dahl-Karlsen, OED (observer)

4. 4 Development perspectives for the Norwegian Continental Shelf 0 50 100 150 200 250 300 2002200620102014201820222026203020342038204220462050 Annual production of oil and gas (mil. Sm3 o.e.) Decline scenario Long-term scenario Closing the gap must to a large extent rely on development of new knowledge and technology ”We can have a perspective for the Norwegian Continental Shelf of 50 years of oil production and 100 years with gas.”

5. 5 OG21 target figures 4Faster, more cost-effective exploration Reduce the average lead time from licence award to discovery to 3 years. 4 Faster, more cost-effective development Reduce the average lead time from discovery to production to 4 years. Reduce the average CAPEX for new fields on the NCS to USD 3/boe. 4 Reduced operating expenses Reduce the average total OPEX on the NCS to USD 3/boe. 4The environment Reduce CO2 emissions on the NCS by 30 % compared with today's level Zero harmful discharge to sea. 4 Gas value chain Enhance value creation by 50% through additional/new export capacity and more cost-effective technology 4 Exports Increase exports of Norwegian technology by NOK 50 billion, equivalent to sales of NOK 70 to 80 billion in 2010. 4 Enhanced recovery 60% for large oil fields 80% for gas fields

6. 6 OG21: Focus Areas &Technology Targets Areas (TTA) Environment Increased recovery Deep water Small fields Gas value chain Zero harmful discharge to sea 30%red. emissions to the atmosphere Stimulated recovery Cost effective drilling Real time reservoir management Deep water floating technology Long range transport of well stream Seabed and downhole processing Competitive gas production and offtake

7. 7 Implementation of the OG21 Technology Strategy Technology Target Areas (TTA)Lead Party Zero harmful discharge to seaConocoPhillips, (Ole Lindefjeld) 30% Reduced Emissions to AirShell, (Helge Skjæveland) Stimulated RecoveryStatoil (Håkon Rueslåtten) Cost Effective DrillingExxonMobil (Stu Keller) Real Time Reservoir ManagementBP (Morten Heir) Deep Water Floating TechnologyNorsk Hydro (Thore Thuestad) Long Range Wellstream TransportStatoil (Leif Aaberge) Seabed/Downhole ProcessingTotal (Oddgeir Johansen) Competitive Gas Production and OfftakeShell (Geir Vollsæter) Exploration and Reservoir Characterisation will be handled through FORCE (Arild Haugen)

8. 8 OG21 Implementation of the Technology Strategy The implementation of the Technology Strategy started at the end 2002 and has continued through 2003. The different phases in the process have been:  Nomination of seven oil companies as Lead Parties and ”managers” of the nine TTA  Participation of the oil and gas cluster (supplier industry, universities, R&D institutes, etc.).  Each TTA group has performed gap analysis and given recommendations on the most important activities and focus areas for the future.  The TTA groups are now working on initiating the implementation of the strategy.

9. 9 OG21 Responsibilities and assignments for Lead Party (LP) 4The Lead Party (LP) is the TTA-”pusher” on behalf of the O&G cluster. 4The Lead Party is the catalyst of technologic and scientific drive in the TTA process, together with the rest of the O&G-cluster. 4LP shall lead the ”feasibility” project which includes: - ”as is” analysis” and a state of the art description for a given TTA - a gap analysis report - evaluate the need for additional detailing - provide a road map for the TTA. 4LP shall recommend future activities which include market evaluation, promotion of the new technology to potential users, prepare project plans.

10. New technology Time Technology is the key to realise new and demanding projects 1985 Statfjord/ Gullfaks IOR 1986 1993 1994 1996 1997 1998 1999 Åsgard Lufeng Norne Troll Statfjord satellites Sleipner A/ Sleipner West Gullfaks Statpipe

11. 11 Recommendations from the OG21 TTA groups on new activities (1) 430% Reduced Emissions to Air: Develop technology that facilitates the use of CO2 for EOR Fuel cells/ membrane technology for efficient power generation 4 Zero harmful discharge to sea: Develop improved separation systems and water blocking techniques Improve produced water cleaning technology 4Competitive Gas Production and Offtake: Develop technology that facilitates the use of CO2 for EOR Develop compact technology for offshore LNG production www.og21.org

12. 12 Recommendations from the OG21 TTA groups on new activities (2) 4Seabed/ Downhole Processing: Develop wet gas compression systems Develop cost effective subsea separation systems 4Long Range Wellstream Transport: Develop improved prediction tools Develop wet gas compression systems Develop environmentally friendly flow improvers 4Deep Water Floating Technology: Develop harsh environment riser systems Qualify polyester mooring systems for NCS Courtesy Aker Kvaerner

13. 13 Recommendations from the OG21 TTA groups on new activities (3) 4Stimulated Recovery: Develop monitoring technologies to identify sweep efficiency. Improved modelling capabilities regarding CO2 for EOR. 4Real Time Reservoir Management: Develop down hole sensors with improved quality and reliability. Develop systems for integration of data form different sources. 4Cost Effective Drilling: Develop technology for low-cost exploration wells. Develop new extended-reach drilling technology.

14. 14 Implementation of the OG21 strategy 4The OG21 strategy shall to a large extent reflect the technology strategies of the individual companies. 4TTA groups were challenged to focus efforts through Joint industry projects: The TTA groups were challenged to outline the 3 most important projects/activities to be performed within the TTA. View of group members. Proposals including possible participants, funding model, including relevant public funding, milestones and deliverables. OG21 Board evaluation of proposals, For most projects the Lead party company were asked to organize the JIPs to have the projects started. 3 Optimistic view: up to 10 of the proposed JIPs will be started

15. 15 OG21:New activities and funding OG 21 Technology strategy JIPs Public Funding TTA White Papers Gap Analysis Lead Parties Technology Target Areas(TTA) Recommended activities Industrial Funding Governmental agencies Research Council Norway Demo2000 O&G companies

16. 16 Development perspectives for value creation from the petroleum industry - Export of technology Added value from gas New areas Increased recovery Fields in production 20022010 Annual Value Creation Coordinated National R&D efforts