Exploration isn’t dead, and the need for continued exploration is not going away, according to Mike Simmons, the Halliburton Technology Fellow for Geosciences and Exploration. In his recent webinar, Simmons discussed the current exploration environment, citing several sources. One was BP’s 2017 Energy Outlook, which looked at technically recoverable reserves for oil versus predicted demand between 2035 and 2050. “What appears to be evident from this quite provocative figure is that there are already abundant discovered hydrocarbon resources,” he said. “This seems to exceed likely demand for the next 35 years or so.”
But this doesn’t tell the whole story. For one thing, the BP report did not factor natural gas into the mix. Perhaps more importantly, BP’s analysis is of technically recoverable reserves, not economically recoverable reserves. In Simmons’ view this means that rather than focusing on EOR techniques to “squeeze the very last drops of oil from an old oil field,” it makes sense to continue searching for new, more economically viable reserves of hydrocarbons.
Unfortunately, according to information from Rystad Energy, reserves replacement over the past 17 years has rarely been above 100% and in some cases has been as low as 20%. “This is an issue for concern because ultimately that performance can’t continue,” he said, adding that a new approach to exploration is needed.
New factors driving exploration
While North America has unlocked the keys to unconventional development to some extent, and while these efforts have mostly been through advances in drilling and completions technology rather than exploration technology (at least until now, though that is changing), Simmons said “the vast majority of production still comes from conventional reservoirs.” This was recently acknowledged by a Wood Mackenzie report noting that its Macro Oils team has released a new insight looking at global cost curves that indicate many prefinal investment decision projects, even in deep water, are now competitive with tight oil plays in the Lower 48 on a breakeven basis.
“However, this competitiveness has come at the expense of volumes,” a press release noted. “The trade-off of cost efficiency versus volumes means that in the medium to long term, the cost of supply is set to increase, highlighting the Lower 48’s new role as an important marginal barrel producer.”
Simmons said while about $60 billion was spent on exploration in 2017, this is just one-third of what it was four or five years ago. “There has been a dramatic decline in discovered reserves, particularly over the last five years,” he said. “That’s partly due to fewer wells being drilled and less investment, but it’s also because exploration is in some ways becoming more difficult. Geological risks are increasing—we often incorrectly predict the presence of charge; we incorrectly predict the presence of quality reservoirs and effective reservoirs at depth.”
And while the “super basin” concept is appealing, looking in areas like the Permian Basin that still have vast untapped reserves, other companies will still be looking at completely new frontiers such as offshore Argentina, offshore Eastern Canada, parts of West Africa, parts of Southeast Asia and the Arctic. “[These areas] are very tempting because the prizes are potentially very huge,” he said.
Machine learning is one solution to help the industry cope with the huge amount of data and to make the exploration process more efficient. Additionally, the industry needs better techniques to predict the location of the reservoir, charge, seal and trap, and it needs to capture the uncertainty in these assessments.
Simmons gave an example by British academic Jenny Bond. Bond gave a synthetic seismic image to more than 400 participants and asked them to interpret it. Perhaps not surprisingly, the results were influenced by the interpreters’ areas of interest. “Those with experience in salt tectonics invoked salt in the structural configuration,” he said.
“Those with expertise in sequence stratigraphy might see a more sedimentological genesis. Those with compressional experience saw a lot of thrusts.”
Overall, only 21% of the participants actually came up with the “right” interpretation.
How can this bias be overcome? Two words: regional geology. For instance, the synthetic image did show evidence of salt tectonics. “If we had known it was coming from West Africa, we might have understood it and perhaps related it to some of the salt basins that formed as the Atlantic was opening,” he said.
The goal, then, is to improve effectiveness in regional screening. This is done by developing gross depositional maps to map the distribution of potential source, reservoir and seal elements. Burial depth is an important element to determine the maturity of the source rocks. This allows the interpreter to generate charge, reservoir and seal maps, which are then stacked together in a composite common risk segment map to high-grade the most prospective areas.
Simmons showed an example offshore Argentina, which is receiving considerable attention due to an upcoming licensing round. While much of the region has been mapped, only a few areas meet all of the criteria.
“How do we come to interpretations such as that?” he asked. “Clearly we have data where reservoir sands are present and where source rocks are present. And we can use geological techniques including source-to-sink and plate tectonic geodynamic history to start to model where potential facies are present, which could be either a reservoir source or seal.”
Another tool is to reconstruct past climate history. Paleoclimate studies can map areas that received intense rainfall in the past, which in turn led to increased runoff and potentially more likely reservoir presence. Or they can be used to predict upwelling and other factors that drive source rock deposition. These maps are generated by understanding topography, atmospheric CO2 and bathymetry, which in turn enables predictions of ocean and atmospheric circulation.
Another technique Landmark is using is creating regional depth frameworks to find the sedimentary depocenters that determine maturity of source rocks and, for example, considerable thicknesses of sand systems. And the source-to-sink process looks at the depositional processes, drainage patterns and sediment conduits from river deltas into ocean basins. Finally, studying sedimentary architecture provides an understanding of rock interbedding, important in resource play exploitation.
Overall, Simmons said geoscientists have several tools at their disposal, from stratigraphic architecture to modeling past climates. With several basins around the world still vastly underexplored, this arsenal should help reduce the uncertainty associated with frontier exploration.
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