Opportunities in petroleum

I WAS in Houston last week at the annual Offshore Technology Conference, touted as the world's largest gathering of oil and gas professionals.

Just over 75,000 delegates attended the conference, including an Australian delegation led by the American Chamber of Commerce in Australia.

In all, 2,500 companies from 35 countries exhibited there.

It was a mammoth undertaking, just like the global petroleum industry.

The overall theme was of enormous investment in very large energy projects around the globe, as the industry seeks to boost supply at a time of record oil prices and rising demand.

Closely related to this theme was discussion about the prevailing challenges.

International engineering company Technip's chairman and chief executive, Thierry Pilenko, highlighted the increased scale of energy projects, which he said was completely different from what the industry was used to just a few years ago.

In Qatar, for instance, Technip is managing the construction of six LNG gas trains.

At the project's peak, it will have 75,000 workers from 85 countries on site.

Mr Pilenko expressed concerned about the ability of the industry to handle all of the proposed projects.

He saw the shortage of experienced project managers as a major bottleneck.

US engineering company Fluor had similar concerns.

One of its presentations highlighted three regions around the world where skilled labour shortages are most acute - one of those was Australia.

Apart from labour shortages, speakers at the conference cited a range of other hurdles standing in front of the industry, including tighter environmental scrutiny, operating in deeper water, and dealing with unconventional reservoirs.

Chevron vice-president global exploration, Bobby Ryan, stood out as one of the most optimistic speakers.

While not dismissive of the challenges, he said the industry had faced all of these issues in the past.

Mr Ryan believes new technology, new skills and access to new regions will enable the industry to meet the anticipated 50- 60 per cent growth in global energy demand by 2030.

Where does Australia fit in all of this? Research by US investment bank Goldman Sachs found that globally there are 191 'mega' energy projects, each worth more than $US8 billion, under way or planned.

This includes seven projects off Western Australia's northwest coast.

Of these, only one is underway - Woodside's $12 billion Pluto gas project.

These numbers can be read in two ways.

They indicate that Australia has bright growth prospects and will attract more attention from global engineers and service providers.

They also indicate that the Australian energy industry is coming off a low base and remains only a small part of the global industry.

The big opportunity for Australian engineers and service providers is to build on the skills and networks acquired in Australia so they can tap into the global market.

-Mark Beyer is being sponsored by Chevron to attend the Offshore Technology Conference 2008.