The world's largest oil and gas trade show, the Offshore Technology Conference (OTC), kicked off in the U.S. energy hub of Houston on Monday, with nearly 100,000 attendees from around the globe flocking to see the cutting-edge technologies on display.
The annual event, a conference and exhibition, was unveiled Monday morning in the sprawling complex of NRG Park near downtown Houston. More than 2,700 companies from over 40 countries will showcase their top-notch equipment and high-tech solutions during the four-day event, in a bid to network with peers and attract customers.
Attendees lined up to watch simulated models of rig platforms, drilling wellheads and lifeboats, while outside the crowded halls, hundreds waited for shuttle buses to carry them to different venues and parking lots, sweating in the Texan summer heat.
The scale of the conference, as OTC Chairman Edward Stokes told Xinhua, manifests offshore drilling's strong appeal in the face of a burgeoning onshore shale boom in North America.
As demand for energy is expected to rise worldwide, oil companies are looking deeper into the ocean for profitable resources. British oil giant BP estimates that by 2035, the world will need around 40 percent more energy than it uses today.
But since 2007, an industry revolution has been changing the landscape of world energy, especially in the United States and Canada. With the cost-efficient use of hydraulic fracturing and horizontal wells, companies are able to extract oil and gas from hard rock formations and make huge profits.
Today, more than one third of United States' natural gas output comes from shale plays. The United States is fast approaching switching from a net oil and gas importer to a major exporter.
Many oil companies, especially smaller-sized independent firms, are taking advantage of the shale boom. Huge investments have been injected into the shale industry. Some analysts worry that resources might be relocated into shale plays from offshore drilling.
But Stokes on Monday told Xinhua he is optimistic about deep-sea exploration and the industry retaining its allure because "there is still a lot of room for growth."
Indeed, experts argue though offshore wells can be at least 30 times more expensive than the ones on land, they promise bigger yields with production that can span decades. Plus, the economic return is more predictable and risk is easier to manage.
The unconventional shale wells, on the contrary, have high depletion rates; namely, their production capacity could plummet by 60 to 70 percent after merely one year. In order to maintain a stable output, oil companies have to drill new wells ceaselessly.
Jackson Sandeen, an analyst with consulting firm Wood Mackenzie, noted there is a resurgence of drilling activity in the Gulf of Mexico.
The drilling level now is higher than before the slowdown prompted by the deadly 2010 blowout of BP's Macondo well, which killed 11 workers and spilled oil for three months. "These numbers have not been seen in the Gulf of Mexico before," said Sandeen.
OTHER HOT TOPICS
Several sessions and panel discussions will cover the impact of the onshore shale boom on the offshore exploration, Stokes said, while another hot topic of the conference will be Mexico's energy reform.
Last week, the Mexican government unveiled energy reform legislation proposals designed to regulate the opening up of the country's long-nationalized energy sector to foreign investment.
The law proposals allow foreign companies to participate, for the first time since 1938 when the energy sector was nationalized, in the national energy industry, including in exploration and production.
Foreign companies will not yet be able to operate filling stations in Mexico, where the state oil company Pemex controls all gas stations, but will gradually be allowed to do so.
Mexico is one of the largest oil producers in the world and has huge reserves untapped. The U.S. Energy Information Administration estimates Mexican proved reserves to be 10.3 billion barrels as of 2013.
The compression in capital spending, and what it means for the offshore sector, will be yet another hot topic, Stokes said. Other areas of focus include how the industry can improve safety; the biggest projects in the industry pipeline; and what types of technology hold the most promise.