The focus of the seismic business has undergone a seismic shift of its own.
For decades, seismic has been primarily a tool for exploration and development of oil and natural gas.
As seismic resolution improved and costs came down, industry saw increasing opportunity for optimizing production in a cost-effective way.
This trend accompanied the operating companies’ own shifting focus in a low commodity-price environment to acquire existing reserves and expand reserves in mature producing areas rather than emphasize high-risk wildcatting.
But an unexpected surge in demand coupled with the global oil production capacity surplus shrinking to a sliver has spiked oil prices to record levels and left the world worrying about future supply. The slow creep of reserves growth alone, it seems, will not suffice to feed tomorrow’s demand. Much more exploration is needed.
With the current consensus for high oil and gas prices to continue for the foreseeable future and the inherent technical and economic limits to reserves growth and acquisition, two linked questions arise: Should the focus of advancing seismic technology shift back to exploration? Or should the emerging emphasis on production optimization continue to grow?
The answer, according to industry experts interviewed for this supplement, seems to be: Yes to both.
Production-oriented seismic
The Society of Exploration Geophysicists was given a name appropriate for the resolution of seismic tools when the association was formed in the 1930s, according to Mike Bahorich, executive vice-president for exploration and production technology, Apache Corp., Houston.
“It would have been difficult at the time to predict that seismic resolution would improve from the single record used to find large anticlines to the 4D images we have today that reveal subtle movement of fluids,” he says. “Perhaps we still do not expect what the future holds.”
Bahorich contends that, given the level of resolution achievable with seismic today, many investments in exploration research and development apply to production and vice versa.
“As our industry continues to mature, a greater majority of new reserves will be found in and around existing fields. As an example, less than one fourth of new reserves booked in the US from 1994 to 2004 were from new field discoveries,” he says.
Even the biggest oil exploration target is dwarfed by the aggregate volume of oil left behind pipe: As much as 60-70% of oil typically remains unproduced in field development.
Accordingly, Bahorich sees the focus of seismic technology R&D gradually shifting towards production applications, “as this is where the greatest number of applications will be.”
One area that Halliburton’s Landmark unit sees as a growing opportunity for seismic applications is enhanced oil recovery (EOR) projects, says Doug Meikle, vice-president, Landmark and project management, Halliburton Drilling, Evaluation, and Digital Solutions.
“Sustained high oil prices due to relentless global demand and diminishing new field discoveries are making previously uneconomic or marginally economic opportunities much more attractive,” Meikle says. “Experts believe there is a large amount of original oil in place that has not been produced. What’s more, we already know where to find it.”
Exploration-oriented seismic
No one foresees a production technology capable of boosting recovery rates exponentially.
And higher oil and gas prices mean mounting costs of acquiring reserves.
So the pendulum is swinging, to some extent, back to exploration seismic.
While seismic technology has been shown to increase recovery factors of existing reservoirs by 5-10 percentage points, notes Robert Peebler, president and CEO of Input/Output Inc., Houston, “in order to keep pace with the ever-increasing demand [for oil and gas], we must continue to find new reserves and focus on developing seismic technologies for exploration and development.”
Some of the cutting-edge advances in seismic technology may even open up a whole new paradigm in exploration geology.
One example is cited by Per Arild Reksnes, president, Geoscience & Engineering, PGS Marine Geophysical, a unit of Oslo-based Petroleum Geo-Services ASA (PGS): the use of seismic attributes in so-called “megasurveys,” which some see as a key to new discoveries in mature areas.
In mature areas such as the North Sea, there is a growing urgency for operators to discover and develop satellite fields before the large-field infrastructure is forced to shut down as economic reserves deplete. Megasurveys merge huge datasets from a wide variety of field-specific 3D surveys into consistent 3D data to help improve understanding of depositional systems in a regional context.
PGS has developed megasurveys with as many as 130 3D datasets. Such efforts, says Reksnes, “enable industry to reveal geology in a new and exciting way.
“It gives industry the ability to understand regional geology that in a big way can help companies understand the migration of oil and the trapping of oil.”
Emphasizing both approaches
Many in the industry contend that the synergies between exploration seismic and reservoir seismic warrant continued emphasis on both and not on one to the detriment of the other.
“They are both of equal priority to us,” says Robert Brunck, president of Paris-based Cie. Générale de Géophysique. “They are at the core of the challenges faced by the oil and gas companies that are keen to improve or at least maintain the replacement rate of their reserves.”
Successfully replacing reserves requires advanced seismic technology in exploration “to image more subtle targets that are smaller and deeper and in more complex geological environments, and hence [requires] sustained R&D efforts,” Brunck says.
At the same time, he notes, “It is now widely accepted that production seismic, especially 4D and reservoir characterization, leads to an improvement [in oil and gas recovery rates] by monitoring fluid movements in the reservoir and identifying undrained zones.
“R&D efforts for production applications are also very challenging, notably because production targets test the limits of seismic resolution.”
Noting the close links between exploration seismic and production seismic, Brunck adds that “pushing back the limits of seismic resolution for production applications will in turn also benefit exploration applications.”
Perhaps the most appropriate model, according to Dalton Boutte, president of Schlumberger Ltd.’s London-based WesternGeco unit, is a more holistic approach.
“We see a dichotomy where conventional acquisition systems are being used for conventional exploration requirements, while advanced systems are required for high-risk exploration and production applications,” he points out.
WesternGeco developed its Q suite of advanced seismic services and technologies “to deliver a ‘seismic continuum’ that spans the life of a reservoir, from providing the best exploration images to delivering quantitative rock and fluid properties for development and production,” Boutte says. “The key to unlocking this potential lies in making fundamentally better measurements and in the ability to integrate seismic data with borehole readings.”
It all really boils down to what the biggest driver in the seismic business is today, says Thierry Pilenko, CEO and chairman of Veritas DGC Inc., Houston: Reserves replacement ratio, whether through discovery or optimizing production.
Operators need to use seismic for better reservoir characterization in order to optimize production, he notes. They also need seismic to find new reserves.
“Seismic is applicable to both [exploration and production] domains,” Pilenko says. “We should not consider them as two separate domains.”
From a business standpoint, he notes “the main driver for volume seismic is exploration.
“But we have to have the flexibility to be able to apply seismic at the prospect level, at the reservoir level, and at the basin level. The real underlying issue is reserve replacement.”