Hydrocarbon Exploration and Production: A Strategic Outlook

To establish a daily hydrocarbons production rate and maintain this production in the medium and long term, there need to be proven reserves that have been detected and evaluated. That is, those with a 90% probability of being extracted, where the characteristics of the reservoirs and their fluids have been well analyzed and a production profile established. Also necessary are production facilities and resources to guarantee operation, among others, or we can have a robust exploration portfolio that guarantees the reserves restoration, or both. 

How do we ensure there are reserves? By discovering them. How are the reserves discovered? By exploring. And how is exploration carried out? The experience of performing this task for many years allows us to describe procedures for the hydrocarbons exploration cycle, which have incorporated concepts and technologies that have allowed for increasing efficiency over the years. However, there is not yet an effective mechanism for transmitting knowledge and experience to the newest generations in an orderly manner. 

Older generations are leaving organizations and taking their experience and knowledge with them. Meanwhile, there is a generational gap of at least 10 years, during which companies stopped hiring new professionals. This trend, which began some time ago, has resulted in outsourcing many tasks that companies used to perform and that allowed for the development of specialists and specialized areas, such as surface geology, geophysical data acquisition crews, and seismic data processing centers, among others. These are important challenges that must be seriously considered to ensure the sustainability of hydrocarbon production, as long as nature allows, which is a core part of energy sovereignty. 

However, the outlook is quite challenging for explorers, as the nature of the country’s norms does not allow for the necessary flexibility. Far from facilitating exploration, these norms introduce distractions and obstacles. To use an analogy, it seems that, to overcome an obstacle, instead of building a bridge, the only alternative is to walk a tightrope, while juggling rings. 

To discover commercial hydrocarbon accumulations, in addition to knowledge and methodology, a robust, integrated IT infrastructure is necessary, one that is compliant with essential requirements to keep different teams working seamlessly, securely, and from any location. This should include a dedicated workspace and a scalable architecture that allows for the rapid incorporation of new technologies.

The organizational structure should also allow for the hiring of specialized personnel for specific tasks over specific periods of time, facilitating the adaptation of work teams to meet the requirements necessary to achieve objectives, and, if necessary, contracting services and the technology necessary for specific tasks. 

From the above and other details, it follows that the strategic plan should somehow specify the actions to be carried out to achieve the objectives and establish strategic alignment workshops with the leaders involved, where it is understood that to achieve the objectives set and mainly to increase daily production to about 2 million barrels per day, it is necessary to restore reserves and increase them. If with the current personnel, this objective has not been achieved, it is obvious that it is necessary to restructure the focus of the personnel in the areas of study, to rethink the acquisition of information, and reestablish the exploratory strategy to go beyond areas close to production facilities. In parallel, it is necessary to build a comprehensive database of knowledge that allows the use of artificial intelligence and machine learning algorithms for quick information integration. This also requires the modification of the culture of handling information to document in a common repository and in great detail all the findings and pending doubts to be resolved. This will allow the entire organization access to the same information, while having models, captured in maps that allow us to guide the exploration in an orderly manner.

My point is that sustained hydrocarbons production cannot be guaranteed if we don't know where the hydrocarbon is located or where it is most likely to be found. Once discovered, we must understand the characteristics of the reservoir and the fluid, and establish the development model based on a better understanding of all this information.

If the official information at the end of 2024 indicates that we have proven reserves to sustain production of less than 1 million barrels per day for just under 10 years, it is foolhardy to think that this could increase to nearly 2 million barrels per day in the short term, unless there is promising information about new, sizable discoveries that would allow for a gradual increase in production and sustainability in the medium term. Otherwise, forcing production from existing fields to reach an established production rate would run the risk of damaging the reservoirs, reducing the amount of hydrocarbons that could be recovered. 

Therefore, planning should prioritize exploration. From my perspective, this should occur when we do not have enough information that allows us to reduce the risk of the geological model that underpins the elements of the petroleum system, and to advance toward frontier areas where there is greater risk, but a greater probability of discovering something interesting. All of this while continuing to work closely on production facilities, which ensures that new discoveries can be brought online almost instantly. However, experience tells us that, in mature areas, the probability of discovering large fields decreases.

The task seems complicated, but not impossible. With good organization and the goodwill of the leaders involved, good results should be achieved in a reasonable period of time.