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A great time to be in exploration

The Lamp profiles Steve Greenlee, ExxonMobil Exploration Company president, and how the corporation is competing for the world’s best oil and gas opportunities.

Steve Greenlee, president of ExxonMobil Exploration Company
Photo — Steve Greenlee, president ExxonMobil Exploration Company

When did you first develop an interest in geoscience?

Actually, my passion was to become an oceanographer. My dad, a dentist, loved getting outdoors for fishing, surfing and skiing, so we spent a lot of time on the Jersey Shore. Early on, I enjoyed reading books on just about anything that had to do with the ocean, and if you had asked me a question about coral reefs or ocean currents, I probably could have talked for hours. In planning for college, I discovered the best way to follow my passion was through geology. After obtaining a bachelor’s degree in geology from Duke University, I pursued a master’s in oceanography at the University of Rhode Island.

What led you to ExxonMobil?

I was writing my master’s thesis on the science of seismic stratigraphy. The details of that science were invented at Exxon Production Research (EPR) under the leadership of a fascinating geologist named Peter Vail. I met him at a conference on sea-level changes and got to see his North Sea research. I subsequently decided Exxon was the place for me.

I started at EPR in Houston in 1981, planning to eventually return to graduate school for a Ph.D. and work in academia. But we were conducting seismic stratigraphy workshops all over the world and developing lots of new concepts. It was so much fun that I couldn’t believe I was getting paid to do it. I remained at EPR for 12 years.

What assignments followed?

My first full-time move out of research was a dramatic one. In 1993, the new Exxon Ventures (CIS) Inc. assigned me as a supervisor in western Siberia. I next worked in Kazakhstan before moving to New Orleans as a manager for Exxon’s Gulf of Mexico production unit. After the merger with Mobil, assignments followed in Brazil, Saudi Arabia, Texas and Asia Pacific before I returned to research as president of ExxonMobil Upstream Research in Houston. In 2010, I became president of ExxonMobil Exploration Company.

How would you summarize Exploration’s function?

Our job is to discover new sources of oil and gas that are better than what is already in ExxonMobil’s industry-leading resource base, now estimated at 92 billion oil-equivalent barrels. By better, I mean they have the potential to generate a higher economic return over the life of the resource for all stakeholders. We’re not just in the business of replacing what has been produced. We are after high-value opportunities.

How well is ExxonMobil positioned to carry this out?

We are better positioned than ever to identify and pursue the greatest-value opportunities. This is partly due to how the company’s resource-acquisition effort is structured today. Exploration is focused primarily on discovering new fields rather than its traditional responsibility for adding all resources to the corporation’s portfolio. ExxonMobil Upstream Ventures focuses on securing interests in discovered but undeveloped oil and gas resources. The corporation’s XTO Energy affiliate specializes in North American unconventional resources mainly in shale plays.

How does this provide benefit?

From a corporate standpoint, it benefits us by allowing each business line to focus on a specialized area or role. Our competitors might be good explorers, or good at negotiating acquisitions, or experts in unconventional plays. But we can pursue all three at the same time. With our three organizations working together while focused on our individual specialized roles, we are in a stronger position to look for the most attractive opportunities.

Exploration is not a stand-alone business line. We don’t drill a discovery and then sell it to someone else to develop and produce. We can apply the full breadth of ExxonMobil’s industry-leading upstream organization from exploration and development through production and gas marketing, all supported by a research company that provides the latest technology. Plus we have world-class downstream and chemical businesses. This allows us to generate maximum value through the full life cycle of an energy development. This is ExxonMobil’s prime differentiator, and it is a strength that is particularly attractive to host governments.

Where has the corporation had success with a full life cycle model?

A recent example is the Papua New Guinea (PNG) liquefied natural gas (LNG) project that started up in 2014. It has the potential to produce some 9 trillion cubic feet of natural gas for export to Asian markets as LNG for decades to come. ExxonMobil brought all of its upstream strengths to bear in an extremely challenging environment with minimal pre-existing infrastructure. But we have put in place the ingredients needed for a successful long-term project and a strong relationship with the government and the people of PNG. Best yet, we are still exploring for new resource opportunities.

Of course, we have established long-term relationships all over the world.

In July, we announced a significant oil discovery on a 6.6 million-acre block – about 10,000 square miles – offshore Guyana in South America. We’re optimistic about establishing a long-term presence in Guyana to help the nation build the infrastructure to support development of its oil and gas resources.

Switching topics a bit, how does Exploration develop its geoscience talent?

We focus on having employees experience the full breadth of petroleum geoscience, from the initial exploration concept all the way through the last barrel produced. The best geologist is the one who has worked in teams with the engineers, commercial people, gas marketers and others to learn how to develop a superior project. Those who become technical and business leaders within the corporation will have a complete understanding of what is required to create the most value for shareholders. These opportunities are not necessarily available within many other companies.

ExxonMobil Exploration Company’s employees discuss seismic program at Sakhalin 1
Photo — From left: ExxonMobil Exploration Company’s Kim Begay-Jackson, Steve Greenlee, Norm Allegar and Paul Lee discuss the results of a 2015 seismic program conducted at the Sakhalin-1 project.

How are lower crude oil and natural gas prices affecting exploration?

Some might think we would be significantly pulling back, as many in the industry have. While our capital expenditures are down from last year, we are well positioned to continue competing for the most attractive opportunities. We are organically growing exploration in new areas, and searching for more opportunities in established areas.

Further, we are seeing a lot more exploration prospects coming on the market. Some of these involve situations where financially constrained companies are offering attractive deals in which we can acquire an interest and help them explore their quality properties. This is particularly true in the international and deepwater sectors.

How is ExxonMobil’s technology leadership keeping it more competitive?

We have capabilities to see things others can’t. For example, our new full wavefield inversion technology allows us to model subsurface geology in much more detail than the industry could achieve before. And this is just one of a number of seismic-imaging technologies made possible by our industry-leading use of super-fast, high-performance computing.

ExxonMobil’s technology advantage also spans the upstream to include drilling, engineering and facilities design – all paving the way for exploration, development and production in ultradeep water.

While some of our competitors, for instance, are focusing exclusively on U.S. shale plays, our exploration opportunities span the globe, and we continue to progress into increasingly challenging areas as our technology advances.

Without a doubt, it’s a great time to be in exploration.

3d imaging

ExxonMobil Exploration by the numbers:

  • Employs about 1,000, including 650 geoscientists.
  • Explores in more than 30 countries.
  • Explores on 116 million acres.
  • Our exploration drilling program added 2.7 billion oil-equivalent barrels in 2014, with additions from multiple resource types around the world.
  • Additions from exploration drilling averaged approximately 2 billion oil-equivalent barrels per year over the last decade.
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