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"What we think we know" main barrier to North Sea exploration

Monday, November 19, 2018

One of the biggest barriers to finding more reservoirs in the North Sea is a psychological one - people think they know everything, said Neil Hodgson, VP geosciences with Spectrum.

'It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.'

This quote, attributed to writer Mark Twain, illustrates the main obstacle to finding more oil and gas in the North Sea, said Neil Hodgson, executive vice president of geosciences with seismic company Spectrum, speaking at the EAGE Annual Event in Copenhagen in June.

People think they know where all the oil and gas is - and their minds are closed to trying out new ideas, he said.

And in case you 'knew' Mark Twain said that line, Mr Hodgson pointed out that historians have never found any evidence that he actually said it.

Another illustration is that many people think they know that oil and gas will soon be replaced by renewables. But the data shows that there is still too much coal being burned for renewables to replace even the coal. Demand for oil is going up, requiring the discovery of the equivalent of another US oil shale play every 6 years, Mr Hodgson said.

In the North Sea, there is a reason to hurry in finding and developing new reserves - because otherwise fields will be decommissioned, and infrastructure will disappear. This will make it harder to develop new reserves, he said. What we really need to do is put what we think we know aside and try out new ideas.

There is a famous quote from Parke Dickey, a geologist who died in 1995, 'several times in the past we thought we were running out of oil [gas], but we were actually only running short of ideas.'

'Ideas' can come from new technologies, new play concepts, new commercial ideas, or a mixture of all of these.

One example is the development of stratigraphic traps, developed using sequence stratigraphy technology to better understand the rock layers, and using seismic to de-risk the places where there could be oil reservoirs.

Another example is the Norwegian Ekofisk field, which was discovered from someone's decision to drill a gas cloud in the middle of the North Sea, he said.

There are many such developments in the history of the North Sea, which all led to a jump in the available oil and gas - and before they happened, no-one imagined that they were possible, he said.

Mr Hodgson showed a seismic image from 1966, which was used to find the giant Brent field, although it was barely possible to see the top of the Jurassic on the image.

Today the images are much clearer, of course. 'Another level would give you more prospectivity. 'The more resolution on your image the more resolution you have on your ideas.'

We also have data sets covering a much larger area today, such as a seismic image going across the entire North Sea, including the edge of the basin. 'The bigger the data set, the more understanding we have of how the basin works,' he said.

Mr Hodgson worked on the Central Graben of the North Sea in the 1990s, exploring the flanks of salt diapirs. 'We thought we had the Judy Field nailed in the 1990s, but drilled two wells into a fault block,' he said. 'The seismic data we were using wasn't up to the job.'

At the time, people believed that there was just one source rock, the Kimmeridge Clay, from the Jurassic.

But one well, 29-10-3, in the Puffin field, went a little deeper than the others, and produced some oil with 'weird geochemical markers' which didn't fit to the Jurassic, indicating it could be from another source rock, he said.

Conventional wisdom says that there is only one source rock in the region, he said. But maybe the source rock is in the Carboniferous. 'No-one drills the carboniferous, why would you, it is so far beneath the Kimmeridge clay?'

Mr Hodgson also showed a map of fields in the Southern North Sea, superimposed on a map of the salt walls. There is not much of a match between them. 'The reason is seismic imaging,' he said.
Hard salt horizons mess up seismic images.

But this indicates that it might be possible to see much more, with a full azimuth seismic image. 'Just think what you could find,' he said. 'Think about doing that on a massive scale.'

Mr Hodgson suggested that it might be better if the Southern North Sea infrastructure was publicly owned. A government owner might be happy for new reserves to be brought online, only if the drilling and lifting costs were greater than the production revenues, which should be an easier bar to reach.

The government could take ownership of the infrastructure without any payment to the current owners, because it could say it was accepting the decommissioning liability instead. If the decommissioning costs are (for example) £50bn, and there are £50bn of oil and gas yet to be extracted, 'there's a deal to be had there'. By pushing the decommissioning further into the future, the net present cost of decommissioning would be much lower.

'I think we should set up a National Oil Company, and nationalise the Southern North Sea,' he said.

'It means we can go to small operators and big operators and say 'produce into this infrastructure at cost,' he said.



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