Emmanuel Emielu

Managing Partner, Oil & Gas Soft Skills Limited

Lagos, Nigeria
 OGS - Who We Are

World class training since 2007


Over 1,000 delegates

Upstream and Downstream Operations

Oil & Gas Business and Strategy

Organisational Leadership & Performance

Health Safety and Environment

Renewable Energy Operations


Clients

Oil & Gas

Banking & Insurance

Government

Manufacturing

2
 Emmanuel Emielu, FCIM

30 Plus Years

Sales, marketing, training, analyst

Ex-Halliburton, 2007

Certified Emotional Intelligence

Trainer

Certified International Project
Manager

Fellow, Chattered Management Inst,
UK

Keen follower of energy industry
trends
Managing Partner,
Society of Petroleum Engineers,
SPE, Nigeria Gas Association (NGA)
Oil & Gas Soft Skills Ltd African Renewable Energy Alliance
(AREA)

Council Member, Lagos Business
School Alumni Association.
 OGS - Who We Are

World class training since 2007

Over 1,000 delegates

Upstream and Downstream Operations

Oil & Gas Business and Strategy

Organisational Leadership & Performance

Health Safety and Environment

Renewable Energy Operations

Clients

Oil & Gas

Banking & Insurance

Government

Manufacturing

4
 Programme - Oil & Gas Modules

Oil & Gas Value Chain/Global Energy Scene

Exploration & Production in Non-Technical Language

Oil Well Drilling Operations

Production Operations

Drivers of Oil & Gas Business: Strategic Choices for Insurers
Global Partners
Learning & development strategies
www.strategies4training.co.uk

Ashridge Masters in Management

www.ashridge.org.uk

Executive business and management training

worldwide www.bmtg.org

Assessment solutions the right employee

decisions. www.profilesinternational.com

E-Learning for the Oil & Gas Industry

www.atlasknowledge.com
6
The Oil Industry Overview
 The Modern Day Energy Mix

Oil

Natural Gas

Coal

Nuclear

Biomass

Renewables

Energy the ability to do work

Primary uses electricity and motive power
 Generic Hydrocarbon Schematic
Onshore Oil & Gas Crude Oil Oil Inland Products
Oil Flow Terminals Refineries Distr. Depots Consumers
Wells Stations
Dry Associated
Gas

Onshore NAG Flow Gas Gas Pipelines Systems Gas

Gas Wells Stations Processing/ Consumers
Compressor
Plants

NLNG Plant

Offshore Gas Prod. PIPLELINES

Gas Wells Platforms Crude Oil

Gas
Offshore
Oil Prod. LNG
Oil FPSO
Platforms
Wells
Petroleum
Products

Crude LNG Crude Crude Product

Oil Export Export Oil Export Oil Import Imports

9
 The Exploration & Production Life Cycle
NIGERIAQIT CAMEROUN

Abandonment
LAG
OS Acreage acquisition
Reservoir Mgt
QI
Operations
L T

Basin analysis

Facilities installation

E & P LIFE CYCLE

Prospect generation
Facilities construction

Facilities design
Economic analysis
ATA

Wildcat Drilling Field

development
Field Economic
Appraisal drilling
Development Plan analysis 6
 A Peculiar Industry

A Volatile Game

A complex phenomenon

A Global Phenomenon

A Technological Challenge

A Risky Affair
 A Volatile Industry

Historically crude oil prices were driven by technology and discoveries.

But since the 70s geo-politics and warfare are the dominant drivers.
Recently, technology in the fore again: shale gas, FLNG

SOURCE: BP Statistical Review 2010

 Multiple Drivers

Discoveries and production

Timelines and deliverables

Prices, fees, rates, wages

Royalty, bonus, taxes

Access rights

Limitations of obligations

Payment terms, currency

Disputes, arbitration

Risk Management

Inter-fuel competition

Technology
13
 Multiple Players

IOC International Oil Companies (Shell, Elf, Chevron, Agip,
Mobil)

NOC National Oil Companies (NNPC, DPR, NAPIMS)

Independents

Foreign Independents (Tullow, Heritage, Africa Oil, Afren)

Local Independents (Conoil, AMNI, Pan Ocean)

International Oil Service Companies

Halliburton, Baker Hughes, Schlumberger

Local Oil Service Companies

Nigerdock, Oildata, OGS
 Multiple Players

OIL INDUSTRY

UPSTREAM M/STREAM
D/STREAM

CONCESSIONAIRE REGULATORS SHIPPING MARKETING REFINING STORAGE

PRODUCT
LEASE HOLDER CONTRACTORS
MARKETING

E&P E&P ENGINEERING CONSULTING

 The Energy Value Chain

Exploration
& Development

Hydrocarbon
Production

Shipping

Refining
& Blending
Storage

Distribution

Marketing
M/S
UPSTREAM DOWNSTREAM
 The Energy Value Chain
SUPPORT
SERVICES

Logistics Exploration &

Shipping
Refinery &
Development Petrochemicals
Legal
HSE Seismic Acquisition Export Terminals Plants & Complexes
Finance Processing VLCC Storage Farms
Manpower Interpretation Crude Marketing Trucking
Regulatory Drilling / WE Product Marketing
Training Appraisal Dispensing
Production
Insurance Reservoir Mgt.
Security Abandonment
Technology
Research
Engineering
Procurement
Project Mgt
Etc
 Upstream

Specialized knowledge

Risk/Capital intensive

Technology and service dependent

QHSE emphasis

Multicultural, global

Knowledgeable, widely travelled employees

Conglomerates but some small, too
 Downstream

Typically all comers mixed background

More commercial than engineering

More local work force

Varying emphasis on QHSE

Lots of small scale enterprises

Service based/focused
 Midstream

Commercial/speculative

Shipping logistics

Oligopolies/ Cabal
 Varying Business Models

Streams up, down, mid

Services E&P, Drilling, Refining, Legal, etc

Products Oil, Gas, products, tools, etc

Scope International, local, marginal, etc

 Multiple Activities

Exploration and production: search for oil explore,
discover, develop, produce, abandon

Drilling: proof of discovery, making holes

Engineering and construction: Facilities and resources

Refinery and blending: Plants construction, operation,

maintenance



Storage & Distribution: marketing, importation, haulage,
outlets, depots, pipelines

Support Services everything from catering to consulting
 Industry Maze
STREAMS SCOPE PRODUCTS
UP MID DOWN IOC NOC IND MF OIL GAS REFINED TECH

E&P

DRILLING
SERVICES

REFINERY

STORAGE

MARKETING

ENG & C

SUPPORT
Reality - Things Do Go Wrong!

Hurricane Katrina

Exxon Valdez

Piper Alpha

GoM Blowout 2010

Hundreds of other big and small incidents that may or may
not make international headlines

Good Business for Insurance!

 The Concept of Reserves

The major driver of value for oil companies and

nations

The underlying factor of many geopolitics, and wars!

The bargaining power of many nations

The basis of investments and strategies

The prospect of economies and societies
 Reserves Definition

There is no definitive answer until the end of a reservoirs
producing life.

All reserves estimates involve some degree of uncertainty.

To take into account of this uncertainty resources and

reserves are classified according to the level of certainty
associated with their recoverable volumes and the potential
for reaching commercial producing status
 Reserves Classification
RESOURCES

DISCOVERED
UNDISCOVERED

PROVED
UNPROVED
RESERVES
RESERVES

DEVELOPED UNDEVELOPED

PRODUCING NOT
PRODUCING
 Classification of Oil Reserves
Resource a concentration of naturally occurring solid or liquid
petroleum or natural gas, in or on the earths crust in such a form
[that] the economic extraction is currently or potentially feasible

Reserve that portion of the identified resource from which a

usable mineral and energy commodity can be economically
extracted at the time of estimation.

Proved reserves material for which estimates of the quality and

quantity have been computed from analysis and measurements
from closely spaced and geologically well known sample sites
 Classification of Oil Reserves
Developed reserves - proved reserves to be recovered through
existing wells and with existing facilities

Undeveloped reserves proved reserves to be recovered from new

wells on undrilled acreage or from existing wells with major capital
expenditure intervention

Probable reserves reserves that have not been proved by

production at a commercial rate of flow and must be proved by
additional drilling and testing

Possible reserves reserves that may be present in non-producing

regions where geological or other reservoir information suggests that
producible hydrocarbons may be present.
World Proved Reserves, 2011 (BBL)

0 50 100 150 200 250 300

SAUDI ARABIA 263

VENEZUELA 211
CANADA 175
IRAN 137
IRAQ 115
KUWAIT 104
UAE 98
RUSSIA 60
LIBYA 46
NIGERIA 37
KAZASTAN 30
QATAR 25
USA 23
CHINA 20
BRAZIL 13
ALGERIA 12
MEXICO 10

SOURCE: Energy Information Agency

Africa Regional Oil & Gas Reserves
0 300 600 900 1200 1500 1800 2100 2400 2700

7.5
East Africa 11.3

0.015
Southern Africa 2.8

2667
West Africa 184.8 Oil Rserves
Gas Reserves
17.1
Central Africa 23.2

65
North Africa 293.2

127.6
TOTAL - Africa 515.4

Oil 2012 Reserves (bbl)

Gas 2013 Reserves (tcf)
Source: EIA
Crude oil prices 1861-2012
US dollars per barrel, world events

BP Statistical Review of World Energy 2013

BP 2013
 Recap

In this section we looked at how energy is closely related with mans
civilization and economic growth

We saw that the oil and gas are the dominant energy sources will
continue to be far into the future

We saw an industry buried in complexity of multiple dimensions, and

how the concept of reserves is at the centre of it.

We examined the various segments of the energy value chain.

and the activities in each stage

Finally we saw how the complexities translates to risks and ultimate

insurable value creation