COMMENT U.S. OIL SUPPLY PROBLEMS REQUIRE NEW ATTENTION TO GIANT PROSPECTS

Thomas D. Barber
President
Barber & Associates Inc.
Houston

Adapted from an Oct. 17 speech at the annual meeting of the Gulf Coast Association of Geological Societies in Houston.

The U.S. is in a predicament.

We cannot be without oil sufficient to fuel our economy, but we cannot be responsible for subduing every conflict, worldwide, that threatens our access to adequate supplies.

We geologists must accept our unique responsibility and address the basic problem. We must reduce, if not eliminate, our dependency on imports by substantially increasing our domestic reserves.

We've all said this and heard this so often our tongues are tired and our ears are dulled. But it does provoke three fundamental questions geologists must answer.

GIANTS, SUPERGIANTS

Question No. 1: Do we honestly believe that somewhere within the United States of America we can discover fields of such size they can materially increase our reserve base; ie., giants or supergiants, 500 million bbl or greater? Anything less may not be sufficient.

If you look at our record over the last several decades and particularly during the heady, high activity period of the late 1970s and early 1980s, the answer is: apparently not.

If you believe the overly conservative resource estimates prepared periodically by the U.S. Geological Survey and Minerals Management Service, the answer is: probably not.

If you are convinced that Amoco and Exxon, both blessed with some of the best geological minds in the world, know what they are doing, the answer is: evidently not.

But note: These answers are qualified. Apparently not. Probably not. Evidently not. So reverse the signs on this equation, and the flip-side answer is a weak "maybe."

Now add to the positive side of this uncertainty the specific hypothesis of John Moody, a former president of the American Association of Petroleum Geologists, and his colleagues in 1968 that 25-28 giant oil fields remain undiscovered in North America, of which three, perhaps four, have since been found, and the answer becomes a strong-voiced "possibly so."

A NEGATIVE BIAS

Question No. 2: If it is possible there are still giant fields in the U.S. awaiting discovery, why haven't we found more of them?

I suggest a two part answer.

First, in spite of our reputation for being dreamers and schemers and wildcat riders, our history reveals that we, and consequently our managements, are rather timid and biased toward the negative.

Forty years ago this month, in 1951, Wallace E. Pratt delivered his "Oil is first found in the minds of men" speech to a regional AAPG meeting with the South Texas Geological Society in Austin. In it he documented evidence of our negative bias by listing some of the areas and places where major oil companies, after serious study by the best geological minds in the world, had concluded that oil would not be found: Kuwait, California, the Permian basin, Uinta basin, and on the Gulf Coast-fields like Thompson, Tom O'Conner, Conroe, and Old Ocean.

In 1965, Dr. King Hubbert, speaking to the Gulf Coast Association of Geological Societies and commenting on his now famous bell curve-which indicated that our ability to find oil was definitely on the decline-suggested that our poor performance could be "the result of our inflexibility with regard to our geological ideas of where oil ought to be found."

Ten years later, in 1975, H.W. Menard and George Sharman compared the historical success of explorationists in the U.S. with a simple model of random drilling. They concluded that industry had been relatively successful in finding small targets but less successful than random drilling in finding large ones.

This conclusion is supported by their analysis of the discovery of giant East Texas oil field. Industry found East Texas in 1930 at a depth of 3,000 ft. Based on its large size, shallow depth, and number of wells that had been drilled in the U.S., the Menard model determined that a program of random drilling would have found East Texas in 1903.

Update of Hubbert's curve through 1990 production confirms what hindsight tells us. We haven't changed our pattern. Whatever we were doing wrong in 1965 we are still doing, only we are doing it with better tools.

This brings me to the second part of my answer.

Because of industry's remarkable technological advances in exploration and exploitation, we are now better able than ever to identify and produce potentially productive zones, particularly thin bed sequences. Advances in seismic instrumentation, computation, processing, and interpretation enable geophysicists to record more data than ever before, to measure thinner intervals than ever before, and to map smaller reservoirs than ever before.

As Menard observed 16 years ago, we are good at finding small accumulations, and I guess he would be happy to know that we are getting better. I have no doubt that with continued technological improvements, someone one day soon will find the last barrel of oil remaining in Matagorda County.

This, in itself, is not bad. It keeps King Hubbert's curve from plunging off the page. It does keep some of us employed. And it is fun to explore with all of this amazing technology.

But while industry is focused on finding what oil remains in and along those established trends where we know it can be found and our daily imports keep increasing, who is exploring in places where we do not know it can be found-places where we are purposefully electing not to explore but places where giant fields may be waiting to provide relief for our import dependency?

WHERE ARE THE GIANTS?

Question No. 3: If it is possible that there are still giant fields in the U.S., awaiting discovery, where are they?

The giant fields we must find are somewhere in the back of geologists' minds. Here are three that keep rolling around in the back of my mind:

• In Southeast Oregon is the Harney basin, containing Mesozoic and Cenozoic age sediments. On outcrop to the north in the Blue Mountains, vugular Jurassic carbonates hold discrete pockets of a very volatile crude.

  Physically and chemically, this oil more nearly matches Smackover oil produced at Jay field in Florida than any other crude oil in the U.S. Unhappily, the Harney basin is covered by a surface layer of Tertiary volcanics 2,600-7,000 ft thick below which seismic cannot obtain usable data. So it just sits there, waiting.

• Extending northeast from eastern Arkansas, through southeastern Missouri, and into western Tennessee and Kentucky is the Reelfoot rift. No more than 10 deep wells have been drilled in the rift, but they confirm more than 13,700 ft of pre-Knox (Arbuckle or Ellenburger) Cambrian carbonates and clastics with good shows and near reservoir quality sands.

  A few published seismic lines within the Reelfoot show anticlinal closures, horst blocks, faulting contemporaneous with deposition, wedges, pinchouts, unconformities, and the like. And it is just sitting there, waiting.

• Outcropping near the bottom of the Grand Canyon in northern Arizona is an unmetamorphosed group of sedimentary rocks called the Chuar, Proterozoic in age. The Chuar group is more than 5,000 ft thick, half of which consists of organic rich mudstones and siltstones with total organic carbon of as much as 8%, averaging 3%, and with temperature measurements indicating they are within the principal oil generating window.

As an analog, in Oman Paleozoic reservoirs ranging in age from earliest Cambrian up through Permian contain 12 billion bbl of recoverable oil. Geochemical analysis of this oil identifies it as having been generated in an algal carbonate, late Proterozoic in age.

Where might there be 12 billion bbl of Proterozoic sourced oil in the U.S., just sitting there, waiting?

Some other places geologists already are thinking about-in addition to the Arctic National Wildlife Refuge, Offshore California, and Offshore Florida, which are currently off limits-probably include the west flank of the Idaho batholith, under the Great Lakes, the Midcontinent - rift, the foreland basins associated with the Ouachita fold belt, Golden Lane size Cretaceous reef fields in Southwest Louisiana, fossil basins in East Texas, Wyoming, and elsewhere, and so forth.

AGGRESSIVE OPTIMISM

Geologists are endowed with an abundance of aggressive optimism.

It is compounded from a mixture of a resourceful, venturesome spirit, a lot of imagination, and a persistent determination based on faith in our ultimate success. It is a gift geologists have that few in this world possess.

But there are obstacles. The job of explorationists is to find oil and gas, and that takes money.

The job of managements is to provide and allocate those funds.

Managements, however, conform to Newton's first law of motion: A body at rest will remain at rest, and a body in uniform motion will remain in uniform motion unless some outside force is applied to it.

Geologists can make a unique contribution to the solution of U.S. oil supply problems.

To do so, however, they must let imagination swirl in their minds, fill their lungs with a fresh supply of aggressive optimism, and apply the force necessary to move funds toward prospects able to yield the types of discoveries the U.S. must have.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.