Stimulating Exploration Growth

How can oil companies be encouraged to continue exploring in a mature area like the UK Continental Shelf? John Austin, Managing Director of OMV in the UK and Chairman of the Technical Committee for Prospex 2012, has a few ideas.
This article appeared in Vol. 9, No. 6 - 2013


John Austen Can you tell me a bit about yourself and your career to date?

I am a geophysicist originally, and joined the oil industry straight after university because I loved the idea of using technology to find new hydrocarbon resources, and of working in an exciting business, key to global economic growth. Nothing’s changed in 30 years! I have worked in all aspects of geophysics for various contractors and oil companies, so I gained an excellent grounding in the technical side of the business before moving into more management roles over the last 20 years – exploring South East Asia, seeking out business development deals in the Middle East, managing global exploration programs and lastly building a growing business in the UK. My formative years in the business were with Enterprise Oil – regarded at the time as a real innovative explorer – and I gained an enormous breadth of experience in a competitive and collaborative environment there. At OMV, I can bring all my experience to bear on growing the UK business through exploration and business development.

What is your role in Prospex and why did you get involved?

My main responsibility at Prospex is the Technical Program, which is generally the responsibility of the President-Elect of the PESGB (Petroleum Society of Great Britain). It’s a real pleasure to see how best to put a program together that will be of interest to attendees, while also offering a good service to those sharing their prospects with the industry. The key is to get a mix of ‘Prospects to Go’ and presentations by industry bodies and experts who can help with solving exploration problems. I think we’ve got a good balance this year, with a cross-section of presenters from across the industry and across north-west Europe.

The first Prospex was initiated as a way to stimulate UK exploration growth. Was this effective?

Prospex (then called the Prospect Fair) was part of the UK PILOT initiative designed to help reverse the decline in UKCS activity and increase the chance of success. There is no doubt that the initiatives undertaken over the last ten years have helped to re-vitalize exploration in north-west Europe, and Prospex has played its part. However, the effectiveness has been limited and UK exploration activity and success rates are dropping again. I feel passionately that there is much more to come in the UK, as well as in Ireland, Faroes and of course Norway, so we will do our best in PESGB and in future Prospex events to ensure we continue to play our part.

What other initiatives can be used by countries (not just the UK) to stimulate a flagging oil industry? Can you give us some examples of good ideas?

The best stimulant to investment in exploration is for us to all keep a close eye on costs, and for governments to ensure fiscal stability and support. Norway’s exploration activity has expanded in the last few years in response to fiscal stimuli, but whether this actually improves exploration success rates and reduces finding costs is still debatable. The industry does need to see fiscal stability from governments, however, and this has been less obvious in the UK than elsewhere. I think it is important for the industry to work closely with DECC (UK Department of Energy and Climate Change) to increase activity and I am co-chair of their recently established Exploration Task Force, which will look at ways to keep the UK industry motivated.

Why is it important to include service organizations as well as prospecting companies at the exhibition?

The industry can only work well with true partnerships between all companies. Operators and JV partners need to collaborate closely in order to use their collective knowledge wisely and efficiently. Similarly the relationship between contractors and exploration companies should also be seen as more collaborative. Much of the new technology comes from contractors, not explorers, and in order for the explorers to benefit from it, there must be close interaction.

How is the 10th anniversary of Prospex being celebrated?

The 10th Prospex is being marked most notably by a special Panel Session at the end of Day 1, where the question: ‘What are the Prospects?’ will be posed to the panel and audience. This session will look back over the last 10 years of Prospex and the exploration of the UKCS, and speculate on what are the prospects for the future, indeed also where are the prospects, and how big are they!


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