Securing the energy supply at the source: Wintershall focuses on expanding partnerships Energy experts in discussion with the Secretary General of OPEC / Wintershall CEO Seele: “We need to score against National Oil Companies through technology and operative performance, otherwise Europe will be left behind.”
Berlin. The global energy market is in flux: “We are experiencing a global race for the most important energy raw materials. A race in which former emerging countries such as China and India are now setting the pace,” explained Rainer Seele, Chairman of the Board of Executive Directors of Wintershall, at an energy debate hosted by the German Council on Foreign Relations (DGAP) in Berlin. Seele discussed the current economic and political developments on the raw materials markets for crude oil together with OPEC Secretary General Abdullah Salem El-Badri and Ulrich Benterbusch, Director of the Office of Global Energy Policy at the International Energy Agency (IEA). All the participants agreed that oil supplies are secured, as it is a well-supplied market.
El-Badri underlines that the world energy demand in 2035 is expected to be more than 50% higher than it was in 2010: “Oil will retain the largest share for most of the period to 2035, although its overall share will fall from 34 to 28%.” El-Badri stressed the necessity to take technology further: “For the future we need to continually develop technologies in all spheres of the oil industry and employ high-calibre people to explore and produce oil in new areas that are often in remoter, harsher and deeper locations.” The OPEC Secretary General said that “we also need management in the oil industry that has the guts to take risks and invest.”
The OPEC states only account for about 40% of the global market. According to estimates by OPEC, oil production by non-OPEC states will be at 53 mb/d (million barrels per day) in 2012 – and thus well over OPEC production. Additional growth is expected in the USA, Canada, Brazil, China, Columbia and Russia. The proven oil reserves of the OPEC states increased slightly last year and make up 81% of the global reserves.
Oil will remain the most important primary energy source worldwide for the foreseeable future in the view of energy experts. Global oil consumption will continue to increase: according to estimates by the International Energy Agency (IEA) from 87 million barrels per day in 2010 to 99 million barrels per day in 2035. The future rise in demand is being dictated by emerging countries, first and foremost China and India. Experts believe that OPEC’s share in global oil production will increase in future. But they also expect non-OPEC production to grow in the coming years, driven mainly by the developments in so-called “unconventionals” (shale oil). “There is potential in unconventionals worldwide. But the technical and economic viability of each individual case must be proven,” Seele said.
However, this doesn’t mean European companies and policy-makers can just sit back and watch: “Europe must strengthen its presence at the sources of energy resources – for that is where supply security begins,” Seele said. “Without long-term and reliable partnerships with producer countries, we will lose the global race for raw materials. That also applies to the much-talked-about rare earths. But it applies even more to crude oil and natural gas, yet they are given scant little attention in the current debate about our Germany raw materials foreign policy,” Seele commented.
Expanding good relations with countries with large supplies of raw materials was a prerequisite for this according to Dr Seele. “We must continue to invest in reliable partnerships, such as the one we have with Russia, a country rich in raw materials, but we must not forget to develop new partnerships. For us, future growth means a clear commitment to the Arab region. Even if the situation there remains troubled for the time being,” Seele said. Two thirds of the world’s oil and gas reserves lie in the strategic ellipsis stretching from the Middle East across the Caspian Sea region to the far north of Russia, and they are mostly in the hands of state-owned corporations. NOCs (National Oil Companies) have 85% of the world’s current oil reserves.
“Today it is not financial resources, but better partnership concepts that are crucial in the race for energy resources,” Seele explained. In this regard Europe needed to concentrate on what it can offer the countries with abundant raw materials: stable markets and companies that prove their worth with technical know-how and operative performance. “A partnership is only stable in the long term and resilient in the future when both sides benefit from it,” Seele explained.
And this is precisely what Wintershall does so successfully, Seele pointed out. “Our projects with international partners in Russia, Norway, Libya and also in the Arab region are good examples of functioning, comprehensive cooperation in the energy sector,” Seele continued. “And our expertise from Germany is proving to be an admission ticket to the world of National Oil Companies.” Wintershall focuses on using sophisticated new technologies to increase the yield from oil reserves that were developed in Germany together with BASF and can be applied worldwide. “In Germany we want to recover more oil from an old oil field with the help of a fungus in a new pilot project. Innovations like this can act as catalysts for the industry,” Seele said.
Wintershall, Germany’s largest, internationally active E&P company, remains committed to its growth course and intends to further increase oil and gas production.
Wintershall Holding GmbH, based in Kassel, Germany, is a wholly owned subsidiary of BASF in Ludwigshafen. The company has been active in the exploration and production of crude oil and natural gas for over 80 years. Wintershall focuses on selected core regions, where the company has built up a high level of regional and technological expertise. These are Europe, North Africa, South America, as well as Russia and the Caspian Sea region. In addition, these operations are complemented by the company’s growing exploration activities in the Arabian Gulf. Today, the company employs more than 2,000 staff worldwide from 35 nations and is now Germany’s largest crude oil and natural gas producer. With the natural gas trading and transport subsidiaries it operates together with Russia’s Gazprom, the BASF subsidiary is also an important gas supplier on the German and European market.
Wintershall. Shaping the Future.