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Egisto Mannini | Oil & Geopolitics | Intelligence & Interview N.14 | Dr Giangiuseppe Pili

Approved by the Author

Usually, we use to dislike randomness in life. Predictability and railroad-encapsulation of life look promising, comfortable, and easy. However, life is beautiful because of an unexpected chance. I had the luck to meet Mr Egisto Mannini during a recent flight, coming back to Sardinia (Italy). Everything started because I read he was reading a book on the Soviet economic history (Routledge edition). I’m obsessed with the Soviet Union history, which, I believe, is showing us the future of several countries, and I put Italy inside them – but this is another story (see below). Then I thought “If he is reading such a book, then there are just two possibilities. (a) He is a colleague of mine, but I didn’t know him. Then, starting a chat would be profitable. (b) He is not a colleague of mine. Therefore, he has a similar passion of mine. So, starting chat would be very fun – given the fact that I co-authored a book on the history of the Cold War. However, the reality was even better. Since I started to speak with Egisto, we immediately got in his major expertise: the Oil & Gas industry, the evolution of the hydrocarbon, geopolitical implications, and the (sad) Italian place in the current geopolitical scenario. Egisto showed passion, intelligence, and determination, something definitely unusual. We are both Italians, therefore we are both hard complainers about her. This is our National sport, even more practiced than soccer (which is already an achievement!). This is the 14th “Intelligence and Interview”, which already covered AI, military history and geopolitics, and, of course, intelligence. It was time to cover the Oil & Gas industry! And then, without further ados, I will invite you all to read this extraordinary, dense, and insightful interview! In the name of Scuola Filosofica Team, our readers, and myself, Dr Giangiuseppe Pili, Egisto: thank you!

1. Egisto Mannini, let’s start from the basics. How would you like to present yourself to the International readers and Philosophical School (Scuola Filosofica)?

I am a Wellsite Geologist, and I work as a consultant in Norway, aboard drilling rigs for exploration, appraisal, and development wells. In very few words, my job is to be the Oil Company representative for anything regarding the geology while drilling a well. I am a compulsive traveler, and I use to spend most of my free time between my new country of residence, Bulgaria, Italy, and Norway. My main interests are history, and military history, particularly aviation, mining, and mineralogy.

2. Let’s consider your experience closely. How did you start your work in the Oil industry? How did you get there from the Oil-free Sardinia (Italy)?

With a BSc degree in Geology, I embarked on a career in the mining industry. Mineralogy and mining were my first passions. My dream job was to be a prospector, which requires continuous traveling abroad. Always striving for personal improvement and new challenges, I switched to the oil industry by sheer chance. As a student, I did not have any interest in the oil field. However, back then, I was not satisfied with the position I got.  One of my former university colleagues told me about his exotic new job: mud logging geologist. It immediately got my attention, and I decided to apply for it. I had nothing to lose. The prospect of traveling and improving my English was really appealing. I was hired. Then, I progressed fairly quickly, changing companies and positions, until I had the opportunity to be a consultant wellsite geologist—one of the best jobs a geologist can find. At least, it suits me perfectly.

What I like the most in the oil & gas industry is the fact that it is highly meritocratic and inclusive. It’s just a matter of knowledge and skills. Therefore, people from all over the world work together. I must admit, it’s very stimulating to have the opportunity to meet people with different points of view and approaches to problem-solving.

But let me pick up a remarkable (and inexact) point in your question, namely labeling Sardinia as “Oil-free”. The truth is we don’t know it for sure! All the attempts to discover hydrocarbon resources have failed so far. However, in recent years, new data from seismic surveys prompted a Company to ask permission to drill an exploration well for gas, near Oristano’s town. Needless to say, an avalanche of legal documents were presented by countless associations and private citizens. I have read some of them. As an expert in the field, I can certify most of them were vague to say the least, copy and paste of the same specious arguments, never referring to actual points in the project as was presented for the procedure of Environmental Evaluation. Classic examples of NYMBY and BANANA phenomenon that plague Italy nowadays.

Moreover, it is believed that the offshore northwest of Sardinia presents geological structures potentially trapping hydrocarbons. At this moment, all attempts to ask permission to explore it, using noninvasive geophysical surveys, have been rejected.

3. Very briefly, how would you describe the history of the Oil and Gas industry?

It simply defines the modern history and the times we are living. Hydrocarbons, mainly oil and tar, have been known and used since the Stone Age. For instance, even Ancient Rome mined tar in the Abruzzo region. However, it is with the first well drilled by “Colonel” Drake in Pennsylvania that the Industry really took off. The main events? Rockefeller and the breakdown of his trust; the birth of the Seven Sisters; Winston Churchill’s bet on the presence of Persian oil and his determination to switch the British Navy from coal to oil before the First World War; the discovery of massive oil fields in Saudi Arabia and North Africa; the birth of NOCs (National Oil Companies) and OPEC, the huge leap of offshore drilling. Each one of these steps – and obviously many more – has had enormous geopolitical consequences, notably the United Kingdom’s involvement in the Middle East and the alliance between the United States and Saudi Arabia. It may seem we are looking only from the perspective of the Western World, but oil was crucial for Russia (Baku was an oil boom town). When the Soviets came in, oil drilling was already crucial – after all, Hitler’s campaign in the East included the Caucasus exactly for the oil fields. For the Soviets, oil increased its importance over time. Indeed, in the 70′ and 80′, oil and gas exports were the Soviet’s main source of hard currency. Likely, without those exports, the USSR would have crumbled earlier than it did. Thus, it can be said that the history of oil shaped the history of the Soviet Union itself and, with her, the history of the entire geopolitical evolution of the world competition. I strongly recommend Daniel Yergin’s The Prize – The Epic Quest for Oil, Money & Power, which is already a classic and a book well worthy to be read.

4. I was enchanted to hear your analysis on how the new Hi-Tech impacted in the Oil and Gas industry. May you give us a sense in which the recent technological advancement impacted the hydrocarbon extraction?

The key is computer power and data transmission. This industry is a powerful driver for innovation. Improving efficiency and recovery factors could extend a field’s life for years and generate revenues for hundreds of thousands of millions, if not billions, of dollars. In exploration, the ability to process with new algorithms seismic data, even from old surveys, make it possible to reconstruct with better accuracy subsurface geological structures and see new features previously unseeable. For instance, now you can visualize a buried riverbed and delta channels, which are potential reservoirs. According to the reservoir characteristics, advancement in downhole geophysical tools enables measurement while drilling and optimizing the well path on the fly. The seismic 4D surveys, adding the dimension of time, show how the reservoir’s fluids migrate, therefore improving the reservoir models leading to better interventions. In completion and production, so-called “smart wells” are more common, with multilateral wells with different branches that could be isolated and downhole sensors that measure very accurately flow, pressures, and temperatures. All this enormous data flow is then transmitted via electric or optical fiber and then analyzed in control rooms, increasingly often on land. Data analysis is crucial to optimize reservoir management and monitor equipment performance to avoid failures and plan proper maintenance.

5. As a follow-up question, given the general talk on AI, do you see a role for AI in the Oil industry? Do you think it is or will be a game-changer, or, instead, it will increase just slightly an already impressive effective process of extraction and distribution of the Oil and Gas?

I know for a fact that AI will have a role in the industry. Already many players are working on developing its applications. However, this subject is really beyond my horizon of expertise; therefore I can’t really say how AI will shape the future.

6. Let’s have a geopolitical twist now! So, you have been working since the Cold War ended. However, I bet you have first-hand knowledge of how the petroleum industry worked. How did the collapse of the Soviet Union influence the Oil and energy sectors?

I was still a student when the Eastern bloc collapsed. I entered the upstream sector when Russia was already on a different path. It may look weird, but the end of the Soviet era did not influence much the oil & gas markets because the USSR was already fully integrated into them. This was already mainly due to selling oil and gas via pipelines, mainly to Western Europe. Obviously, production declined because it was a time of extremely low prices, which were not due only to the Russian industry’s political turmoil or obsolescence. The long-lasting effect was the separation of the former USSR republics into independent countries, which spurred a renewed interest in historic competitions, conflicts, and the opening of new ones, mainly in the Caspian Sea region. Many western Majors entered in partnerships projects previously not possible. In this specific respect, Azerbaijan and Kazakhstan are the true winners of the Cold War.

7. We are witnessing new frictions over the world. The energy sector is at the forefront of the new geopolitical challenges. For instance, the arctic regions are now under close surveillance, if not directly contested by NATO countries (e.g., Norway, Canada, USA, and Russia as main players among many others). Where do you see the main challenges of today’s competition toward Oil and Gas?

This is a very tough question, very complicated to answer properly. First, we need a clarification of what is contested. According to the United Nations, UNCLOS, every country facing the sea is entitled to an Economic Exclusive Zone of 200 miles from the coastline or island with a significative human presence. Obviously, in the case of overlaps, the interested Countries must agree. The second factor is the passage of shipping lanes or pipelines with their tariffs. Historic critical areas are the Ormuz Strait and the South China Sea. However, a new hot spot is the Eastern Mediterranean Sea, where Turkey is turning to be quite an aggressive player, with claims over waters in front of Greece and Cyprus. It has to be taken into account these Countries have been involved in conflicts with Turkey for centuries, true, but the discovery of massive gas reserves in those and adjacent waters surely does not help. As for the Arctic, Norway and Russia reached an agreement defining their EEZ boundaries in the Barents Sea.

8. Though there are challenges, humans still find opportunities to cooperate peacefully. May you give us your opinion over the recent Israel-UAE agreements to which other relationships will likely be opened or considered?

Israel is going to be a new gas hub in the Mediterranean, due to the recent series of massive fields discoveries – as a point of Italian pride, ENI was a key player to it, with the discovery and development of the Egyptian Zohr field. They will be linked together in a system able to send gas via pipelines to the producing countries and Europe as well, thus increasing the supply diversification. This will not be a move that will please neither Russia nor the USA. I must admit the agreement surprised me, also because I am not following many political developments in the Gulf region. However, I am pleased to see tensions between Israel and Arab countries easing. In addition to economic opportunities, it is probably the realization that a permanent state of conflict, though beneficial for some political leaders, it is very costly and not sustainable in the long period.

9. How do you see the future of hydrocarbon? 

As said before, hydrocarbons have been used by humans since the very beginning of civilization. No doubt, they will continue to be with us and our civilization development. However, we know that burning massive quantities of hydrocarbons is contributing to altering climate with potentially dire consequences. That said, I despise the simplified public dichotomy between “the bad oil and good, green renewables.” First, oil and gas are not just fuel for cars. They are not cheaply nor effectively replaceable for heavy transportation, e.g., maritime transport, or planes. They are the basis for almost all goods we consume in our every day to day life, not to mention agriculture, health care, and even the “green” technology. Second, I think a complex problem cannot be solved with simplistic solutions. All the options should be explored fairly reasonably and, when possible, integrated. In such respect, I think oil and gas can play a great role, if used wisely, to mitigate the effects of climate change and cut emissions. Oil companies are truly striving to cut emissions, after all, through continuous optimization. In addition, to get more using less makes sense economically. For example, Norway powers some of the biggest platforms with power lines directly from onshore, with electricity produced in hydroelectric plants. This way, they can cut emissions starting from production.

10How can our readers follow you?

Probably the best way is Flickr, the photo sharing site, I love to take pictures especially when traveling or visiting museums, my profile is
Besides Flickr, I am quite active on my personal profile on Facebook, where the casual reader may find my rants regards the despairing Italian politics situation or other non-sense, which unfortunately abounds in these days. More interested readers may check my LinkedIn profile:

11Five keywords that represent you?

Pragmatic, humanist, open minded, traveler, “scientist”

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