'Disconnect' seen in industry's use of technology

Bob Tippee
Editor

With the perspective of a geophysicist who has worked as both an operator and service provider, Steven Tobias sees a troubling "disconnect" in the upstream oil and gas business.

"At the same time that you have high-technology service companies scrambling for work, there are large companies wondering why they can't generate prospects or develop fields properly," says Tobias, a cofounder and vice-president, exploration, of South Bay Resources LLC, Houston.

The problem isn't the absence of technical tools; rather, it's the absence of time and sometimes inclination of professionals at oil and gas companies to learn about them.

"There are very few stupid or bad people left in the business," Tobias says. "But when the exploration manager gives you a task to do and you have to work these many blocks for the sale or these fields, you don't have time to learn all these new technologies."

Tobias and his two partners in the private operating company they founded just over a year ago are, as he describes it, applying big-company technology to small-company prospects. The firm has discovered commercial hydrocarbons in two out of the three wells it has so far drilled to previously overlooked targets in a mature area of Matagorda County, Tex.

Tobias's experience with highly technical exploration goes far beyond the Texas Gulf Coast, and his professional interests extend into the organizational dynamics of oil and gas companies.

While international exploration manager with Pogo Producing Co., Houston, he generated the prospect that led to the 1995 discovery of Benchamas oil field in a then-dormant area of the Gulf of Thailand. And for 7 years before the start-up of South Bay Resources, he ran a high-tech consultancy called Energy Outpost Co., which he describes as "an asset team for hire."

He thinks everyone at oil companies should experience life as a service provider.

"When you do service work, you gain an appreciation for things like marketing," he says. "No matter how good you are, you need the business context to apply your talents or it's all for naught."

At Energy Outpost, where he handled projects in the US, Southeast Asia, and Europe for more than 20 clients, Tobias learned how different companies can be.

"The variability of quality from company to company is truly shocking," he says. "Some companies are just in reaction mode to the last management issue. Others have corporate cultures that encourage excellence. Being an outsider and coming in and seeing companies, I got a real appreciation for the role of corporate culture."

Because exploration is inherently creative, Tobias says, culture must foster creativity.

"When people are afraid, they're not creative. When they're not creative, they're not learning new technology. They're not generating prospects. So corporate culture is very important."

'Back-breaking' work
At South Bay Resources, Tobias, another geoscientist, and an engineer combine computationally intense integration with what he describes as "back-breaking" work. The approach borrows from Tobias's experience as a consultant, emphasizing a rigorous process applicable to a variety of prospects.

The process aggressively integrates 3D seismic data with all available engineering and geological information. It applies integration tools used in the North Sea, off West Africa, and in the deepwater Gulf of Mexico—but not in small onshore prospects in places like Matagorda County. A reason many operators shun such comprehensive integration in small prospects may be the amount of work involved.

"You've got to take 700 wells, and you digitize them," Tobias says, using his company's work in Matagorda County as an example. "You've got to go through the production histories and tie that to the wells and tie all those to the [seismic] attributes, make synthetic seismograms to develop a good understanding of the [sonic] velocity structure. You have to tie drive mechanisms in as well to understand how to interpret the attributes.

"That type of back-breaking, integrated work is tough to do. Not many people do it."

The system statistically correlates engineering and geologic data with traditional seismic attributes such as frequency, amplitude, and phase as well as attributes related to amplitude variation with offset (AVO).

"We put it all together using neural networks and pattern recognition," Tobias says.

In Matagorda County, the analysis revealed compartmentalization of the subsurface that he characterizes as "very, very stratigraphic."

He says new drilling targets emerged in the mature producing area like this:

"We came in looking at some shallow reservoirs. These shallow reservoirs had log character that hung in there well after well. Our geologist said, 'It looks like we won't have any stratigraphic traps here. Everything seems to hang in.' And the seismic seemed pretty continuous.

"So we went deeper, and we were looking at reservoir after reservoir. And then we started looking at the engineering and noticed production anomalies, different production histories, pressure histories. What we found was that despite what the logs were saying there was some compartmentalization in there.

"We went back to this zone we'd overlooked [in Oligocene Frio], and we very carefully analyzed the seismic response. And we found that someone had drilled a bright spot nearby, and that was a wet well. Someone else had drilled what seemed the opposite, kind of a dim spot, and that was also wet. But there were enough penetrations that we did a very detailed analysis of the good wells and the bad wells and came up with maps that showed targets.

"When we compared seismically derived compartmentalization maps with the engineering we found a very good correlation. And they were stratigraphically controlled correlations. We went in a drilled our first well, and it was a discovery. And that's pretty much what we're doing. We're finding stratigraphically and structurally controlled correlations and pursuing them."

South Bay Resources concentrates on targets above geopressure, which means smaller but cheaper targets than those that larger companies pursue.

"But in going for the smaller targets we're coming across overlooked large targets as well," Tobias says.

'Enormous' potential
He considers the potential for discoveries like those "enormous." But tapping that potential requires a fresh geologic approach.

While he was still a consultant, Tobias found that his work applying high technology to exploration was showing "extremely strong stratigraphic control to hydrocarbon accumulation." But exploratory practice remains oriented to structural control.

"To this day in nonbright-spot exploration it's really tough to sell stratigraphic traps," Tobias says. "It just is. Systematically, the industry has drilled structural traps, and now we have the tools that are showing that there are a lot of stratigraphic traps. There are tools that deliberately find stratigraphic traps that are not being used because people don't know how to use them."

Asked about technologies that haven't yet delivered to their full potential, Tobias cites underbalanced drilling—which he calls "a big sleeper"—and AVO. A mistake often made with the latter is insufficient sampling.

"We confine our AVO understanding to very small areas and very thin volumes of rock because AVO changes enormously if you're in pressure, near pressure, above pressure," Tobias says. "You go 2-3 miles away, and you find different responses." He adds that his company couldn't have made its discoveries without AVO.

On the use of technology in general, Tobias advises companies to emphasize teamwork and keep technology in a business framework.

"Because it's integrated, you can't have one geophysicist or one paleontologist getting really good without working within a matrix of other people, guided by someone who's really top-notch," he says. "Those are the key personnel who really make or break a company."

The business context needs to be a portfolio of opportunities.

"The greater the risk, the larger the portfolio needs to be," Tobias says. "When a company thinks they have a magic bullet and a good technology and they go into some fairly high-risk ventures, they're really asking for trouble."

Investors, he adds, tend to focus on geologic trends. So companies with records in specific areas are the ones that most easily attract capital.

"But they are neither scalable nor transferable to other areas," Tobias says. He wants South Bay Resources to be different, explaining, "We're not offering prospects; we're offering processes."

It's an approach he developed as a consultant¿by necessity.

"I'd have to go in, figure out what they were doing, generate prospects, and then finish all within 2 weeks maybe or not get paid," he says. "Over the years I had no choice but to develop a template that would work everywhere."

It's no surprise, then, that South Bay Resources doesn't plan to confine its operations to Matagorda County, or Texas, or even the US—or its scope to small targets. It's looking for projects in Canada and overseas and talking to companies with large fields in late stages of depletion.

And Tobias sees "great synergies between large companies that don't have our speed and agility and ourselves."


Career Highlights

Steven Tobias is a cofounder and vice-president of exploration of South Bay Resources LLC. He, Steve Slack, president and chief executive officer, and Scott Rubsamen, vice-president of engineering and operations, formed the firm late in 2002.

Employment
He has worked as an exploration specialist for Mobil Corp., Tenneco Inc., BHP, and Pogo Producing Co., managing projects in Louisiana, Oklahoma, Texas, the Gulf of Mexico, Australia, Nigeria, Indonesia, and the Carpathians. In 1996 he became president of Energy Outpost Co., providing prospect generation and field development and exploitation planning services to oil and gas companies.

Education
Tobias holds a degree in geology from Queens College and a master's degree in geophysics from Pennsylvania State University.

Related Articles

Union strike ongoing at US refineries as negotiations continue

02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue...

Petrobras CEO, five other senior executives resign

02/04/2015 Maria das Gracas Foster, chief executive officer of Petroleo Brasileiro SA (Petrobras) since 2012, has resigned along with five other senior execut...

Saetre named Statoil president, CEO

02/04/2015

Eldar Saetre has been named president and chief executive officer of Statoil, succeeding Helge Lund, who resigned in October.

Karve joins Cobalt for Cameia development

02/03/2015 Shashank V. Karve has joined Cobalt International Energy Inc. as executive vice-president in charge of development of deepwater Cameia oil field on...

Tight oil price test

02/02/2015 The basic job for Oil & Gas Journal writers is to pick the right words and put them in the right order, which is often harder to do than it mig...

Union strike under way at US refineries, petchem plants

02/02/2015 The United Steelworkers Union (USW) has instituted a strike at nine US refining and petrochemical production plants following a breakdown in negoti...

SERVICE | SUPPLIERS

02/02/2015

Gazprom Neft receives two Arctic shelf exploration licenses

01/26/2015 Gazpromneft Sakhalin, a subsidiary of JSC Gazprom Neft, has been awarded subsoil-use rights to the Severo-Zapadniy block on the Pechora Sea shelf a...

Estill named chief executive officer of Madagascar Oil

01/23/2015

Madagascar Oil Ltd. has appointed Robert Estill as chief executive officer.

White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected