Statoil ASA plans to increase North American natural gas and oil production fivefold by 2020 through unconventional plays and in the Gulf of Mexico, CEO Helge Lund said at IHS CERAWeek 2012 in Houston. Lund was one of several top exploration chiefs to speak at the 31st annual week-long conference in Houston.

North America is the company’s “largest growth opportunity” outside energy-rich Norway, Lund told reporters during a press conference. The company in 2011 produced close to 100,000 boe/d in North America. Its goal is to increase output to 500,000 boe/d by 2020 in the United States and Canada.

Statoil in late 2008 paid $3.38 billion to Chesapeake Energy Corp. for a stake in the Marcellus Shale (see Daily GPI, Nov. 12, 2008). In 2010 it secured Eagle Ford acreage in a joint venture with Talisman Energy Corp. (see Daily GPI, Oct. 12, 2010). Last year it paid $4.4 billion to buy Brigham Exploration Co., giving it access to the Williston Basin’s Bakken and Three Forks formations.

To date, output from the Marcellus has been inconsequential compared with overall company output, Lund said. The company, like most of its peers, has reallocated resources to more liquids-heavy areas. However, “we expect to produce about 60,000 to 100,000 b/d in our first phase” of production from the Bakken field, he told reporters.

In his keynote address to delegates, he called on the industry to reform its image by becoming more proactive in exceeding regulatory safety standards. He also encouraged companies to help create a better public persona. “What we do matters. Our products matter. So people should care,” Lund said. “We need access, but we also need acceptance.”

Lund encouraged delegates to embrace legislation to increase transparency for finances and operations to build public confidence. “I believe there is a huge upside working to ensure we have the right regulations, rather than being perceived as the industry that fights regulations.” The industry should “admit” that it didn’t move quickly enough to disclose hydraulic fracturing chemicals.

“I take the view that the industry should continue to be proactive and transparent. That is the only way we can earn the trust we need to develop these valuable resources.”

The Statoil CEO also encouraged the audience to embrace social networks such as Facebook or Twitter and use them to advance a positive agenda. “We cannot ignore that parts of the public that don’t trust our industry and our ability to operate safely,” he said. “Trust must be earned.”

Because of the energy industry’s technology-savvy abilities, it could become a “socially responsible and technically sophisticated” leader.

“We have a responsibility to show leadership and take action beyond what is formally required of us,” Lund said. “Rather than await new governing regulations and legislation on our operations, we can take our own initiatives and exceed the expectations we meet.”

In his keynote address, Royal Dutch Shell plc CEO Peter Voser echoed some of Lund’s comments.

The natural gas revolution is changing the U.S. energy security outlook but its role in energy demand may depend on how policymakers address regulatory challenges and whether the industry is able to earn the public’s trust, he said.

“We all recognize the significance of this opportunity [but] our industry needs to do a better job of convincing the world that natural gas is a force for good,” Voser said. It’s not only by job creation, “but by reducing energy costs and boosting other critical industries, such as chemicals manufacturing.”

Skepticism has grown in areas where unconventional gas and oil is being produced, and the concerns have to be addressed, the Shell CEO said. “As an industry, we have not always done our best to engage in the public debates about these issues,” he said. “We need to do a better job of listening and responding.”

Voser said fracking had been performed more than 1.1 million times in the past 60 years in the United States; documented cases of freshwater contamination are rare. “When problems have occurred, they were simply due to poorly designed wells,” he said. However, Shell supports disclosing frack chemicals and regulations to promote transparency.

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