There is no getting away from risks in the business. But with increasingly sophisticated technology, and with accumulated know how to manage the risks the industry has been very successful at managing uncertainty to ensure favourable odds. The industry is getting increasingly obsessed with data acquisition and management-since effective use of information can save mega-millions. Worldwide, the size of new fields discovered has been declining from a peak in the late 1960s. The elephant sized oil fields have all been discovered.
If you think you are going to find a billion barrel field you can afford to drill a lot of dry holes for every discovery. But with declining field sizes, it is vital that the exploration effort is more successful, and that the success is reproducible year after year. And the only way to optimise hydrocarbon recovery in a safe and economic manner is by collecting as much data as possible before we begin drilling for oil, and one type of data in particular is increasingly at the top of every oil companys shopping list.
The oil and gas industry has been revolutionised by 3D seismic imaging over the past 20 years. Taking off in the 1970s as a tool to help develop fields, it was expensive and difficult to interpret. But with advances in computer technology and reduction in acquisition costs, 3D seismic has moved from a specialist field development tool into mainstream international exploration. The growing use of this miracle technology has substantially improved the rate at which exploration wells find oil from around 20 per cent in the 1980s to 50-60 per cent now.
British Gas itself achieved an unbeatable exploration rate of 100 per cent in the year 2000 and an impressive 71 percent in 2001, and averaged 75 percent in the last 5 years. With wells costing anywhere between $5 million to $30 million, the annual savings can be significant.
Seismic surveying works exactly like sonar, but instead of just recording the echo of the seabed in one place, the multiple echoes bouncing off layers of rocks below the seabed are also recorded by an array of sensors towed behind a special ship. These records are then processed with supercomputers to arrive at a 3-D picture imaging the conditions underneath the earth. Not only is a 3D image of the rock layers captured but by digitally analysing the raw data on powerful workstation computers, geophysicists can calculate rock properties and in some cases can literally see where the oil and gas is under the earth.
Not only can geoscientists map the shape of the earth they can have a pretty good stab at seeing what is inside it: predicting where the best reservoir rocks are, what the fluids are (oil, gas, water) and they can even predict the likely pressures to be encountered there- by reducing the risk of the oil-mans biggest fearthe well blow out. Number crunching and interpretation of all this data used to take upto 12 months but can now be completed in as little as two months.
Now, teams of geoscientists, engineers and drillers work together in 3D space in virtual reality to plan individual wells and field developments.
Once a discovery is made, 3D seismic helps optimise the size of development facilities. The development process itself is faster because the reservoir can be visualised and fewer information-gathering wells are required before the field can be developed. In Egypt, for instance, British Gas signed a gas sales agreement after only one well had been drilled and the field was in production four years after the first discovery well. The ability to fast track a development has greatly reduced lead times bringing a faster return on the hundreds of millions of dollars required to bring a field on stream. To the industry, it means it can finally break out of the business of hunting rarer and rarer elephants to the sphere of shooting ducks. When you only have a few bullets, you have to make sure you dont miss very often.
(The author is director-subsurface, BG Exploration and Production India Ltd