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Investors do not believe our story

Monday, November 2, 2015

Investors are getting very sceptical about the oil and gas industry's ability to find oil and gas, says Finding Petroleum Director David Bamford. Can better use of technology lead to more exploration success - and make us more investable?

Many oil and gas investors are starting to lose faith in the oil and gas industry's ability to deliver with exploration, said David Bamford, director of Finding Petroleum and a non executive director of Premier Oil, speaking at the Finding Petroleum event in Stavanger "Transforming Subsurface Interpretation".

'The viewpoint of all these investors is, we don't believe a word that you say.'

'There's a big issue of actual failure to deliver exploration results and reserves additions, to the point at which investors don't believe our story. That's a serious problem.'

This is in addition to concerns from low oil prices and high operating costs.

This means that the oil and gas industry does not look very attractive compared to other industries investors could put money into, he said.

That leads to the question of whether there can be better ways to understand the subsurface with the help of new technologies, to gather, integrate and manage data.

Mr Bamford suggests seabed seismic recording, fibre optics in wells, gravity and gravimetry, as technologies worth looking harder at. You have to choose the right technology for your project, and then, perhaps hardest of all, integrate all the data together at the end.

Seabed seismic

Seabed seismic is about recording seismic data on the seabed, rather than with recording devices towed behind a vessel on the surface of the water. You can get a much more high resolution recording if you make it on the seabed.

'The idea that you would replace towed streamer seismic with seabed based acquisition has been around for quite a while in the form of [seabed] cables,' he said.

'Universities in the UK and Norway have been using seabed acquisition for years and years and don't understand why our industry doesn't.'

But 'the operational difficulties has driven several companies out of business,' Mr Bamford said.

One seabed acquisition company 'had such operational difficulties, it was having to repeat surveys at its own costs. It eventually disappeared in smoke.'

Companies are moving towards 'nodes' - individual devices placed temporarily on the seabed - which can prove cheaper to deploy than permanent cables.

With seabed recording, you can acquire four component data (compressional waves and three directions of shear waves). You can use this additional data to more sophisticated processing, including monitoring and mapping fractures.

'The whole thing improves the chance of prediction [of oil],' he said. 'This is a technology which has arrived and is finding widespread use.'

Almost all of the seabed surveys done so far have been done in the Gulf of Mexico, and have been 'proprietary' surveys (where one oil company contracts the seismic contractor, rather than 'multiclient' work, where the seismic contractor doing work which is then sold to many different companies). They are also mainly with nodes, rather than cables.

Fibre in wells

Meanwhile, the use of fibre optics in wells is making big steps forward, particularly the way that they can be used as listening devices, using technology mainly developed for the defence industry.

The cable is 'so robust, usable and inexpensive you can deploy it in any well,' he said.

'It doesn't interfere with production,' he said. As you can imagine, production engineers really hate any technology in wells which interrupts flow.

'It delivers [continuous] recording of the noise the production is making, [plus] valves closing and shutting, anything going on in the well. So you can pinpoint where petroleum or water is flying into a well very accurately.

'You can use it for downhole seismic profiles [recording seismic data in the well] and record them any time you want. There is a possibility of permanent reservoir monitoring facility with some fibre optics downhole.'

'So quite powerful stuff.'

The technology has been used to record seismic data in the well by one Middle East client, to monitor a multiwall steam injection in enhanced oil recovery, and recording Vibroseis shot data.

'There are obvious applications, but now really operationally sensible, because this stuff is so robust and works so well,' he said.

Gravity

Meanwhile gravity recording, or more specifically 'Full Tensor Gravimetry' (FTG), is 'very effective,' he said. 'Of all advances in technology, that one had the most impact on finding oil and gas.'

With FTG the gravity is recorded by two devices a short distance apart on the same aeroplane or ship, and then you make a comparison between their recorded signals.

The same noise (for example from aircraft movements up and down) can be recorded by two sensors, and by putting their signals together, the noise can be cancelled out. This means you end up with a much better signal to noise ratio.

Mr Bamford got familiar with FTG in his previous role as a non-executive director of Tullow Oil, which was using the technology in Uganda and Kenya.

'In Uganda, we shot about 10,000 km2 of this Full Tensor Gravimetry. You could integrate it pretty well with 2D seismic, and you'd have a real exploration database you could explore with.'

'In Kenya we acquired 60,000km2 of this gravity data. In somewhere like Kenya you can acquire tens of thousands of square kilometres relatively inexpensively, such as $2-3m dollars for the 60,000km2.'

'It really is good at demonstrating the basin shape and showing you the structural pattern.'

Offshore, FTG is being used to help solve subsalt problems, which are proving hard to image using seismic only.

Another interesting non-seismic geophysics technology is Controlled Source Electromagnetics (CSEM). 'Particularly in Norway, there's been a lot of talk of the help that CSEM can provide to the exploration mapping process,' he said.

The challenge is working out how to fit EMGS data into your 3D seismic.

'If you look at the equations involved and the rock parameters involved, it is not obvious how you join these things together,' he said.

Choosing a technology

So which technologies should you use where?

For example, in a survey in North West Africa, with complex carbonate rock, 'the critical technology to deploy is going to be ocean bottom nodes,' he said.

For North West Europe, typically with sandstones and shale, 'a combination of nodes and electromagnetics might be helpful to you.'

'There's been a reportedly quite large fractured basement discovery in the UK West of Shetland called Lancaster,' he said. 'Allegedly this is part of a new play that could open up all the way from Ireland to Norwegian Sea.'

'The key is first of all mapping where the edge of the basin is and what's its history. [Here] Full Tensor Gravimetry (FTG) would be the important technology.'

The value of the reservoir depends on the distribution of the fractures, so these would need to be understood. 'You can envisage some combination of the technologies I talked about earlier helping you,' he said.

Integration

The critical question which is not well answered is how to integrate all the data together.

The science and equations behind the technologies has been understood for over 100 years.

'But these sciences do not talk about the same thing. Some have first order differential equations, some have second order. That's a complicated answer.'

Most geophysicists' IT set-ups are designed for interpreting 3D seismic.

'The work processes that are built around them don't easily allow the integration of other data,' he said.

'If you accept that these things will change and transform what we do, and therefore increase success rates, reserves extensions, appraising discoveries, making new discoveries, then somehow we need to figure out how to integrate these things,' he said.



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