PROFESSIONAL CAREERS PROFESSIONAL CAREERS IN THE COMING GLOBAL IN THE COMING GLOBAL

ENERGY TRANSITIONENERGY TRANSITION

Peter R. RoseAAPG PRESIDENT

November 2005

THINKING ABOUT CAREERS - 1

Career “Not just what happens to you between

University and Retirement.” A Life Journey that, despite Life’s

uncertainties, needs planning, guiding, preparation, execution, decision-making, and help from others.

“Career crises” -- Dangers? or Opportunities? Prepare for them before they occur. Chance favors the prepared mind.

THINKING ABOUT CAREERS - 2

Mentoring Archetypal human relationship

Mutual decision to join into by older person and younger person

Essential for professional careers

THINKING ABOUT CAREERS - 3

What are you now? Student? Scientist? Employee?

What will you be in 6 years? Technician? Scientist? Employee?

PROFESSIONAL

PROFESSIONAL

“. . . continually pursues and becomes proficient in a specialized occupation requiring substantial skill and/or education, and involving elements of learned study, personal dedication, and service to mankind.”

“. . . traditionally Law, Medicine, and the Clergy; now Engineering, Architecture, and Accounting.”

“An attitude involving personal endorsement of consistently high standards of knowledge, work performance, and conduct . . . and requiring a willingness to be accountable.”

OBLIGATIONS OF E&P PROFESSIONALS

Recognize Inherent Fiduciary Responsibility

Honor Professional Tenets:

Objectivity

Technically Current

Thoroughness

Candor

Team Work

Inescapably Tied to Ethics

IHS

INCREASING TECHNOLOGY

Status of World Exploration: Well Advanced (Conventional)

INCREASING NEW

THEATERS

SMALLER, LEANER, MORE CHALLENGING!

0200400600800

1000120014001600

1960's 1970's 1980's 1990-99

> 1BBOE 500 MMBOE -1 BBOE 200 - 500 MMBOE 100 - 200 MMBOE 50 - 100 MMBOE 25 - 50 MMBOE

Petroconsultants

WHILE THE RATE OF DISCOVERY FOR GLOBAL SCALE (>1 BBOE) DISCOVERIES HAS DECREASED SINCE 1980, OPPORTUNITIES FOR SMALLER (BUT SIGNIFICANT) FIELDS HAVE REMAINED HIGH

GLOBAL LARGE FIELD DISCOVERIES (> 50 MMBOE)

(Excludes U.S. / Canada)

1

10

100

1000

1920‘s 1930‘s 1940‘s 1950‘s 1960‘s 1970‘s 1980‘s 1990‘s

MM

BO

E, O

R N

UM

BER

OF

FIEL

DS

MEAN

MEDIAN

NUMBER OF GIANTS (> 1000 MMBOE)

IHS

GLOBAL FIELD SIZES AND NUMBERS

Status of World Exploration: Discovery Parameters over Time

0

5000

10000

15000

20000

25000

WILDCATS 12250 13864 19297 15842FIELDS 2955 3734 5117 3794

1960's 1970's 1980's '90-99

‘WILDCAT CHANCE’ (RATIO OF WILDCATS TO FIELDS) HAS REMAINED REMARKABLY CONSTANT THROUGH TIME.

24%27%

26%24%

(Excludes U.S. / Canada)GLOBAL DISCOVERY PERCENTAGES

Petroconsultants

0

5000

10000

15000

20000

25000

NUMBER WILDCATS 12250 13864 19297 15842FIELDS > 100 MMBOE 503 581 394 303

1960's 1970's 1980's '90-99

THE RATIO OF WILDCATS TO DISCOVERIES >100MMBOE HAS DECREASED MARKEDLYSINCE 1980, BUT MAY HAVE 'LEVELED OFF'.

4.1%4.2%

2.0%1.9%

(Excludes U.S. / Canada)GLOBAL DISCOVERY PERCENTAGES

Petroconsultants

GLOBAL ENERGY DEMAND, BBOE per yr

Edwards (1997)

ALTERNATIVE

COAL

NATURAL GAS

CRUDE OIL

1900 2000 2100

ENERGY SOURCES

NGL

TAR SANDSOIL SHALE

OIL, NGL & TAR SANDS

100

120

80

60

40

20

Status of World Exploration

A CHALLENGING DECADE• Growing Demand• New Technologies• Challenging Theaters

20052015

Status of World Exploration

• Advancing Technologies• Challenging Theaters• Need for Efficiency• Declining Resource Base• Growing Demand• Fewer Elephants, Plenty of Antelopes• Adequate Capital• Previous Loss of Credibility

Do we have the Vision, Discipline, and the Do we have the Vision, Discipline, and the Will?Will?Can we do it Efficiently with Exploration?Can we do it Efficiently with Exploration?

FUTURE AND ULTIMATE POTENTIAL ESTIMATES THROUGH TIME

1,000

2,000

3,000

4,000

5,000 TOTAL

DISCOVERED

FUTURE POTENTIAL

ULTIMATEPOTENTIAL

1,000

2,000

3,000

4,000

5,000

USGS'88 '90 '94 '94'91'85

WHILE MORE AND MORE OIL AND GAS HAVE BEEN DISCOVERED, ESTIMATES OF FUTURE POTENTIAL HAVE CONTINUED TO RISE

OIL CO

MMBOE

Brown, 1999

GLOBAL ULTIMATE ENDOWMENT*

*Gas converted at5.6BCF = 1MMBOE

CUMULATIVE PRODUCTION

REMAINING RESERVES

FUTUREUNDISCOVERED (MEAN)

28%

45%

27%

2,500 BBL

700 BBL

1,100 BBL

670 BBL300 (Campbell ‘97)680 (USGS ‘95)

1,020 ( O & GJ ‘97 )

12%

50%

38%

2,100 / 11.6BBOE / MTCFG

1,400 TCFG/ 250 BBOE

5,800 TCFG/1,000 BBOE

4,400 TCFG/ 770 BBOE

OIL /NGL GAS

2,400 (Campbell)5,800 (USGS)

4,900 ( O & GJ )

HIG

HE

R P

RIC

E

IMP

RO

VE

D T

EC

HN

OLO

GY

LOWEST GRADE RESERVOIRS

LOWER GRADE RESERVOIRS

FIRSTCLASS

SMALL TARGETSSEISMIC - GEOLOGY

HUGE TARGETSRESEARCH

LARGE TARGETSENGINEERING - GEOLOGY

RESOURCE TRIANGLE

1999 NPC Study (NPC, 1999b)Recoverable Portion of In-Place US Gas Resource (Tcf)

Reserves (1,004)

Reserve Growth (305)Undiscovered, Unconventional

Unassessed Unconventional Reserves (400)

Geopressured Brine (Up to 24,000)

Gas Hydrate (Up to 300,000) Not Assessed by NPC

Increasing developmentcosts, technology needs,

uncertainty, and decreasing concentration

Natural Gas Resource Availability

Cumulative Production (811)Reserves (157)

Known Reserves

Tinker, 2005

Tinker, UTBEG, 2004Tinker, UTBEG, 2004

Tinker, UTBEG, 2004

MAJOR GAS BASINS OF THE WORLD (Resources in Tcf)USGS World Petroleum Assessment 2000

Natural Gas Resource BaseN. Caspian Basin

(156.9) Tcf

Amu-Darya Basin(230.4 Tcf)

West Siberian Basin(1,271.8 Tcf)

Volga-Ural Region(99.2 Tcf)

Western Gulf(251.6 Tcf)

Gulf Cenozoic OCS(140.3 Tcf)

East Venezuela Basin(129.7 Tcf)

Qatar Arch (465.6 Tcf)Zagros Fold Belt (399.4 Tcf)Mesopotamian Frdp. Bsn. (298.3 Tcf)Greater Ghawar Uplift (248.6 Tcf)Rub Al Khali Basin (182.3 Tcf)

NorthwestGerman Basin

(141.7 Tcf)Grand Erg/

Ahnet Basin(114.2 Tcf)

North Sea Graben(160.6 Tcf)

~3870 Tcf in Major Basins~13,000 Tcf Total Resources

Underestimates unconventional gas Does not include brines or hydrates

Current annual global consumption is ~90 Tcf

CRUDE OIL A GLOBAL COMMODITYCRUDE OIL A GLOBAL COMMODITY

SPECIALTIES YOU MAY NOT REALIZE THAT YOU ARE GOING TO NEED - 1

Clear Communication Skills• Speaking• Writing• Active Listening

Interpersonal Skills• Tact• Teamwork• Goal-setting

Practical Statistics• E&P a “Repeated-Trials Game”• Applied to geologic & geotechnical parameters• Statistics, the Language of Uncertainty

SPECIALTIES YOU MAY NOT REALIZE THAT YOU ARE GOING TO NEED - 2

Economics and Finance• Geoscience Results Usually have Economic

Implications• Perceptions of Future Profit drives

Geotechnical Projects• Geoscientists can Take Control of their Destiny

Ethics• Most Geoscience Projects have Fiduciary

Components• Need for Scientific and Personal Integrity• Importance of Living within your Means

CAREER COUNSEL FOR GEOSCIENTISTS1. You are a professional -- with professional responsibilities

and privileges

2. Join professional associations and be active -- build personal networks

3. Don’t self-limit -- give yourself room to grow -- power in integrating geo-specialties

4. Learn some business economics -- don’t let others assess your projects’ values

5. Become a lifelong student -- your University Diploma is a permanent license to learn, not a “Union Card”.

6. Secrets of success:a) Competenceb) Good work habitsc) Integrity

d) Responsivenesse) Contactsf) Enterprise

PROFESSIONAL CAREERS PROFESSIONAL CAREERS IN THE COMING GLOBAL IN THE COMING GLOBAL

ENERGY TRANSITIONENERGY TRANSITION

Peter R. RoseAAPG PRESIDENT

November 2005