The field of technology in the oil production sector

By José Caleia Rodrigues, Geopolitical and Researcher

New available technology can be used in many existing oil markets, in many different countries including non oil exporters, resulting in new fields of activities and new opportunities for industrial companies, which was unthinkable a few decades ago. In this new window of opportunities these companies can collaborate directly with public sector companies that own the resources or private concessionaires of oil blocks. It becomes obvious that technology will be the keystone in the development of the oil sector, in the medium and long term.

We may conclude that the new reserves available for development are dependent on technologies, difficult to obtain, in locations of high political risk or difficult to access . As we referred in our article: farther, deeper, more expensive .

However, the production and the discovery of new oilfields containing large amounts of new crude oil qualities was just dependant on the access to a new emerging technological expertise both for biotic and abiotic ( non-fossil) oil resources . It should be noted that this discovery will have increased about 2.5 times over from the year 1980 to 2010.

We would also like to stress that this increasing abundance of resources on a global scale will have the risk of promoting the production to a point when it becomes much higher than consumption, leading to an eventual sudden drop in market prices were it not for the high operating costs of the new resources . The consumption forecasts of some international agencies indicate that before reaching the end of next decade the production might have had increased by about 50 million barrels per day, an equivalent to almost half the current consumption of around 93 million.

While the opinion-makers, the decision-makers, the academics and the financial markets seem to have been caught in the fallacy of peak oil and the excessive enthusiasm about the renewable energy alternatives to oil; the market prices and the new technological knowledge that will allow extractions as abundant as we want (such as the shale oil , the oil sand), or deposits located at great depths (beyond 7000 meters ), have evolved in a way that could radically alter the approach energy and geopolitics sectors have followed thus far, placing the control of oil resources and its inherent power in the hands of those with the technological and financial resources to ensure its operation.

Therefore, the states where the oil resources are located and that have the power to award concessions for oil exploration at their own discretion may become hostages of this new field and its power that may even decide when and where projects will be carried out.

The new detection and inventory technologies are followed by the development of others applied to oil exploration that revolutionized the industry, definitively overcoming the fear of a possible oil shortage crisis in the world market.

It becomes clear that the new technological developments will provide great exploration opportunities, either upstream or downstream the supply chain. Therefore the acess to technical resources and mining and synthesizing equipment, when applicable, becomes very important for products resulting from new oil sources. Controlling these sources will give power to those owining them. The sovereign states owning these resources will, however, have to to wait for the technical capacity of the industries that posess the required technology, becoming dependat on their services and technical expertise.

in José Caleia Rodrigues, The Power Oil, Lisbon: bnomics, 2013.