Maintaining Seismic-Focused Exploration During Downturn Yields Benefits
This paper demonstrates how maintaining investment in high-quality 3D seismic during the last downturn, together with selective exploration, quality geoscience, application of new technologies, and efficiently maturing discoveries to early cash flow, was successful in sustaining future production.
A conventional industry approach is to curtail seismic activity during a downturn, focusing on limiting new exploration and drilling production wells instead. This paper demonstrates how maintaining investment in high-quality 3D seismic during the last downturn, together with selective exploration, quality geoscience, application of new technologies, and efficiently maturing discoveries to early cash flow, was successful in sustaining future production while deploying capital efficiently.
Challenge in Oman Block 6
Investment in 3D seismic does not contribute to immediate cash flow and, when funds are scarce, is an early candidate for cost reductions. By mid-2014, the seismic sector was the worst-performing segment in the upstream industry. However, without continued investment in seismic, future exploration success is threatened. This poses a dilemma for energy companies as they balance short-term cash flow with long-term value generation.
Petroleum Development Oman took the opposite approach in the mature Oman Block 6. The company reduced short-term exploration drilling and testing and focused on early production from near-term exploration plays for early monetization to partially fund exploration. It used recently acquired seismic data to pursue highly ranked exploration opportunities. Finally, it sustained investment in, and improved efficiency of, advanced seismic acquisition and processing to improve cost efficiency for future plays.
Nevertheless, success through both oil and gas exploration was achieved. Enhanced short-term cash flow and improved capital efficiency resulted while significant commercial oil and gas volumes were discovered. During 2016–2018, 1.3 billion BOE were discovered, primarily in subtle and stratigraphic traps, and over 22000 km2 of new 3D wide-azimuth (WAZ) seismic was acquired (Fig. 1).
The complete paper presents case studies from the Shammar, Mabrouk North East, and Rakid plays. Focused activity in the Shammar play added volumes while early hookup and production provided cash flow, repaying all Shammar drilling and testing costs within a year. A success rate of 100% in Mabrouk North East exploration and appraisal wells proved the potential of better seismic imaging in pursuing more-complex stratigraphic traps in deep reservoirs. Early monetization focus while implementing new seismic acquisition techniques with fast processing turnaround also opened new play potential. Discoveries in the Rakid field’s Permo-Carboniferous Haushi reservoir between 2016 and 2017 delivered ultimate recovery of more than 80 million bbl through imaging of truncations beneath Nahr Umr sealing shales. These low-unit-technical-cost developments are under accelerated development programs with follow-up potential. In two of the case studies, the authors credited strongly integrated exploration, development planning, well and facility engineering, and operations teams collaborating from early in the project with allowing maximum value to be realized.
In addition to the case-study plays, success was also achieved in exploring core and increasingly creamed plays (this term refers to a situation in which exploration has “creamed off” the best prospects first, leaving more-challenging prospects), in which rejuvenation using new 3D seismic resulted in several discoveries and follow-up opportunities.
Improved seismic quality in a mature basin continues to add value through enabling new discoveries from old ideas. Thus, the strategy of maintaining investment in seismic during a downturn—with a focus on stratigraphic and subtle traps—and achieving cash flow from early production has proved to be a solid basis for future success.
Seismic Investment and Continuous Improvement
Key elements of the strategy to sustain exploration activity in a downturn not only included sustaining investment in seismic acquisition and growing the share of seismic as a share of total oil exploration drilling and testing expenditure, but also maintaining investment and trials in introducing new technologies and greater efficiency to seismic acquisition and processing. In 2015, yearly improvement in seismic acquisition efficiency had reduced the cost per vibroseis point (VP) by 80% compared with 2008, so more seismic data with better quality could be acquired.
One example of such an effort is the introduction of ultrahigh-productivity (UHP) acquisition. The introduction of UHP WAZ in 2017 represented the most significant change in land acquisition seismic in Oman since 2008. In 2018, the first 3D UHP WAZ seismic survey was completed with an area of approximately 7000 km2. In previous acquisition methodology, which involved separating two clusters of vibrators by approximately 12 km, acquisition rates of up to 14,000 VP/d were commonplace, with a record productivity of approximately 26,000 VP/d. Using UHP techniques, a record of greater than 38,000 VP/d has been achieved, with average acquisition rates more than double the previous achievements.
The improved efficiency allowed for the completion of a given survey at much lower cost and at greater speed. Close collaboration between the acquisition, processing, and the final users of the data during the testing of the UHP technique ensured that the processing work flows were set to handle such data types and size.
UHP noise caused by the acquisition interference of seismic sources was a completely new phenomenon and therefore required newly developed deblending work flows. This led to an increase of 50% in computing capability requirements. However, new processing techniques that were ready from the start of UHP not only enabled quality improvement of intermediate and final prestack depth-migrated seismic products, but also delivered them at workstations faster than ever before. By the time the seismic data were delivered at workstations as intermediate or final products, the evaluation and quantitative interpretation communities were ready to analyze and evaluate the data, making the final seismic results a complete end-to-end efficient work flow from acquisition to interpretation. The continuous improvement strategy and resulting continuity for contractors also has underpinned safety performance while enhancing new technology deployment efficiency in acquisition and processing of seismic data.
- Sustained investment in high-quality 3D WAZ data and selective exploration, quality geoscience, and application of new technologies has been successful in sustaining future production while deploying capital efficiently.
- New plays have been pursued, new technology developed and applied, and significant discoveries made under challenging conditions.
- Over the past 3 years, the company has delivered over 1.2 billion BOE of contingent resources, sustaining future production growth, while early production has self-funded a large part of the oil drilling program.
- Despite reductions in exploration drilling, the average oil exploration unit finding cost dropped from $2.30/bbl in 2011–2015 to $1.10/bbl from 2016–2019 while significant investment in new 3D WAZ seismic was still being made, resulting in doubling of acquisition efficiency (Fig. 2).
- Stability of contracts during the downturn while implementing new technology led to dramatic increases in data quality and seismic acquisition and processing efficiency, and provided a good basis for new play development and future exploration success.
- It is anticipated that the discoveries made will lead to a period of sustained production growth, while the investment in 3D seismic will continue to enable explorers to unlock new and increasingly challenging plays in the future.
This article, written by JPT Technology Editor Judy Feder, contains highlights of paper SPE 197213, “New Growth in an Old Basin: Successful Implementation of PDO’s Exploration Strategy in a Downturn,” by Nicholas Feast, Salim Rawahi, and Mohammed Mazrui, Petroleum Development Oman, prepared for the 2019 Abu Dhabi International Petroleum Exhibition and Conference, Abu Dhabi, 11–14 November. This paper has not been peer reviewed.