First oil: OTC showcases ongoing importance of offshore sector

KURT S. ABRAHAM, EDITOR-IN-CHIEF & CHIEF FORECASTER 

Fig. 1. The OTC 2025 plenary session on Monday, May 5. Pictured from left to right are moderator Nancy Hungerford, Managing Director, FTI Consulting; Rystad CEO Jarand Rystad, NOIA President Erik Milito (a World Oil editorial advisor); OXY President and CEO Vicki Hollub; and Petrobras President Magda Chambriard. Image: OTC 2025.

Earlier this month, as happens every year at that time, the Offshore Technology Conference was held in Houston, May 5-8. For 3 2/3 days, some of the industry’s brightest minds gathered together to discuss the latest offshore technology trends, as well as regulatory changes, both in the U.S. and abroad. 

For sure, there were some highlights, including the Opening Ceremony and plenary session (Fig. 1) that featured Petrobras President Magda Chambriard, OXY President and CEO Vicki Hollub, NOIA President Erik Milito, and Rystad CEO Jarand Rystad. This year’s agenda featured nine executive dialogues, 18 keynote addresses, 53 technical sessions and more than 360 technical presentations. The exhibition featured more than 1,000 companies showcasing cutting-edge solutions—from virtual reality to interactive installations—that are moving the offshore sector forward. And let us not forget that attendees represented more than 100 countries. 

But then there is the matter of attendance, and the fact that three of the “Big 5” service companies had no stand at OTC. More than one industry friend, who was out at OTC during that week, told this editor that attendance “felt light.” The intimation was that attendance at OTC 2025 was no more than in 2024 and maybe less. But we’ll never know, since SPE chose not to give an attendance figure again this year, just as it failed to last year. When an organization fails to talk about attendance at an event, one can believe that they are not happy with the number. The best that anyone can guess is that the number in the 30-thousands. Whether it’s 32,000 or 35,000 or 38,000, one can only guess. One thing is for certain: OTC is going to have to solve the problem of stagnant attendance. 

Fig. 2. There seems to be a question as to whether former President Joe Biden made all of his administration’s oil and gas decisions himself. Image: Official portrait.

Effects on oil and gas industry from Biden’s mental acuity crisis. One recent book in particular, as well as a flood of revelations from former staffers and current Democrat operatives, have shown that the mental decline of former President Joe Biden (Fig. 2) was in full bloom during the last two years of his term. And really, when you take a further look, it appears to have encompassed his entire term. It is shocking and unacceptable that so many people deliberately covered up Mr. Biden’s inability at times to handle the job and make good decisions. 

The concern about decisions certainly affects oil and gas policy in the U.S. Perhaps the most famous example of Biden having no clue what his own people were doing was when Speaker of the House Mike Johnson (D-La.) visited with him in the Oval Office during early 2024, ostensibly to discuss an aid package for Ukraine. According to a New York Post story earlier this year, Johnson in that meeting asked Biden why he had signed an executive order pausing new permits for American LNG exports to European allies. It’s a crucial issue for Johnson’s constituents in Louisiana, which in 2023, handled 61% of U.S.  LNG exports, according to the U.S. EIA. 

“Why would you do that,” Johnson said he told Biden. “Cause you understand we just talked about Ukraine, you understand you are fueling Vladimir Putin’s war machine, because they gotta get their gas from him.” According to the speaker, Biden was stunned and said, “I didn’t do that.” Johnson replied, “Sir, you paused it, I know. I have the export terminals in my state. I talked to those people in my state, I’ve talked to those people this morning, this is doing massive damage to our economy, national security,” Johnson said. Biden continued to deny that he put the pause on export licenses, and that’ pretty much how the meeting ended. Johnson said he left the meeting with the thought, “‘We are in serious trouble—who is running the country?’”   

Indeed, one might ask, if Biden didn’t sign that export license pause, who did? And was it done with the now-infamous “Auto Pen?” And if some power-grabbing, idealogue in The White House made this decision, it’s fair to ask what other policy items important to the upstream oil and gas industry were handled without Biden’s knowledge or comprehension? Who decided that it was a good idea in Biden’s final five-year Gulf of Mexico leasing plan, announced in 2023, to reduce offshore leasing to just three rounds in 2025, 2027 and 2029? That was the lowest number of leases ever offered in a five-year plan. 

And on land, who was really behind Biden’s slow-walking of Bureau of Land Management permits? For that matter, who was really prodding the EPA to use methane emission rules, water use rules and other environmental regulations as weapons and punish the upstream industry. This editor supports efforts in both Congress and the Trump administration to determine which individuals in the White House were doing Biden’s job for him (because he couldn’t). 

Trump takes out after Starmer on oil and gas. Meanwhile, U.S. President Donald Trump on May 23 did something that Joe Biden would never have contemplated/tried: He chastised UK Prime Minister Sir Keir Starmer about the North Sea in a very public way. His comments relate to the current British regime’s emphasis on Net Zero emissions and renewable energy, as well as the raising of the Energy Profits Levy last November by 3%, to 78%. The upstream industry has criticized Starmer’s action heavily, saying that the high tax makes the UK North Sea “unworkable.” 

In chastising Starmer, Trump said in a Truth Social post, “I strongly recommend to them, however, that in order to get their energy costs down, they stop with the costly and unsightly windmills, and incentivize modernized drilling in the North Sea, where large amounts of oil lay waiting to be taken. 

Trump went on further, saying that there is “a century of drilling left with Aberdeen as the hub. The old-fashioned tax system disincentivizes drilling, rather than the opposite. UK’s Energy Costs would go WAY DOWN, and fast.” Trump is mostly right, of course, but will Starmer & Co. ever realize it? 

The Iberian Peninsula’s blackout nightmare. Speaking of too much blind reliance on renewables, Spain, Portugal and a part of France suffered an historical electrical blackout on April 28, at about mid-day. This grid blackout affected tens of millions of people. While power was restored by that evening for more than 50% of customers who lost electricity, it took almost 23 hrs for Spain's electrical grid to get back to fully normal.  

So, what caused the blackout? Some folks point to the fact that 70% of Spain’s electrical power comes from wind and solar sources, and they maintain this is part of the problem. Trying to be a bit more analytical, the MIT Technology Review says that one theory floating around is that things went wrong, because the grid diverged from its normal frequency. (All power grids, says the Review, have a set frequency: In Europe, the standard is 50 hertz, which means the current switches directions 50 times per second.) The frequency needs to be constant across the grid to keep things running smoothly. 

The Review further said, “there are signs that the outage could be frequency-related. Some experts pointed out that strange oscillations in the grid frequency occurred shortly before the blackout. Normally, our (U.S.) grid can handle small problems like an oscillation in frequency or a drop that comes from a power plant going offline. But some of the grid’s ability to stabilize itself is tied up in old ways of generating electricity.” 

Accordingly, power plants that run on coal and natural gas have massive rotating generators, explained the Review. If the grid has brief issues that upset the balance, those physical pieces of equipment have inertia: They’ll keep moving at least for a few seconds, providing some time for other power sources to respond and pick up the slack.   

However, solar panels, explained the Review, “don’t have inertia—they rely on inverters to change electricity into a form that’s compatible with the grid and matches its frequency. Generally, these inverters are ‘grid-following,’ meaning if frequency is dropping, they follow that drop.” 

In the case of the blackout in Spain, Portugal and parts of France, it’s possible that having a lot of power on the grid coming from sources without inertia made it more possible for a small problem to become a much bigger one. Perhaps more evidence will come out shortly.  

IN THIS ISSUE 

Special focus: Well Completion Technology. We have four articles gracing this month’s lead theme. In one article, two Weatherford experts discuss the revolutionizing of intelligent completions and how an e-ICV enhances production through downhole insights and operational efficiency. In a second piece, a TAQA author details the latest advancements in well integrity and refrac operations using SwellPlug technology. A third feature offers an explanation from a Caterpillar manager discusses the next generation of completion technology, which includes the firm’s Gas Mechanical System (GMS). Finally, an author from Nine Energy Service describes how an innovative plug design derisks ball recovery and screen-out operations in long laterals. 

Drilling technology.  This month, an expert from Halliburton details the efforts required to drill the deepest relief well in history. When an operator experienced loss of well control at a depth of more than 21,000 ft, HPHT challenges came into play. An active magnetic ranging system helped the operator navigate these challenges, ultimately allowing the drilling of the deepest relief well in history.  

EOR-IOR/Carbon capture. The managing director of the firm, Carbon Capture & Commercialization says the industry is eyeing modular carbon capture solutions for EOR and emissions reductions. He says new carbon capture technology promises to gather carbon dioxide directly from the atmosphere and could reduce costs by up to 50%, compared to existing methods, as well as increasing efficiency. This breakthrough may enable enhanced oil recovery, while significantly minimizing environmental impact.