The Fall and Rise of Oilfield Ethics

Abstract

The oilfield is in many ways the backbone of the world economy. Historically economic recessions and booms were linked directly or indirectly to the oil price, itself governed by supply and demand. Since the start of this industry, it has experienced multiple scandals and major accidents that have affected its path to date. In 2001 the Enron scandal of poor accounting practices shook the entire stock market, and it contributed to the complete recession in the same year. Not too long after, a supermajor revealed in 2004 a reserves accounting error that surprised the world. In 2010 the Deepwater Horizon blow out known as the "Macondo Incident" caused serious damage to the environment and significant fines to be paid in compensation due to poor engineering practice. Incidents like these arise concurrent with times of high demand and are instructive as we study their causes and effects on the oil industry and therefore the global economy. Areas of study for this paper include reserves/production estimation as well as ethical considerations for the oil industry at large. Our study is based on the review of uncertainty in both the subsurface and surface parts of oil and gas production. We refer to the previous classifications of uncertainty for the subsurface part and focus on the uncertainty currently existing within the surface production system. Current surface production monitoring methods are discussed. We propose a more automated process to reduce the current uncertainty about hydrocarbon production. Artificial intelligence applicability in the surface production system is investigated. Additionally, in this paper we review the previously mentioned poor practices and accidents briefly and use them to guide our suggestions about preventive actions to avoid future wrongdoing and incidents. We attempt to provide an objective for oilfield ethics and advocate for a unified oilfield industry code of ethics. However due to the large diversity that exists in the wide range of oilfield disciplines, a single code of ethics may not be applicable. Accordingly, we propose a guideline that may be used by different parts of the oilfield industry to develop an application-specific code of ethics. It is hoped that this guideline will guard against the gaps that may foster errors that affect the oilfield industry and global markets.