AAPG 2004 Convention, Dallas

Consultancies including Wood Mackenzie, Robertsons and IHS Energy believe we may be seeing a move to durably higher oil prices. Industry has failed to replace consumption for 20 years and once-profitable basins like the North Sea are now ‘value destroyers.’ The deep offshore remains a viable target. Paradigm and CGG were noteworthy by their absence from this year’s AAPG but many smaller houses were showing new software. Earth Decision Sciences is turning GoCad into a fully-featured interpretation and modeling environment and SMT is likewise expanding its Windows-based Kingdom Suite into a ‘seismic to simulation’ solution. Landmark made heavy weather of selling its consultancy and outsourcing services while Schlumberger’s cluster-based visualization lacked pizzazz. North American universities continue to develop laser mapping of outcrop geology while new, well-site focused tools capture ‘awkward’ geo-data types like cores and cuttings. Some companies are working on new graphics software based on Direct-X rather than the ubiquitous OpenGL. Interesting research from the Kansas Geological Survey shows use of Semantic Web-based taxonomies of geological terms to stitch together geological maps from different areas.

Wood Mackenzie director David Black gave an update on the 2003 study on Upstream Value Creation. WoodMac categorizes Repsol and ConocoPhillips as ‘black holes’—companies which fail to replace reserves and whose exploration ‘erodes value’. Over the 1997-2003 period, the 25 majors studied provided an average 11% return on investment (ROI) from exploration. Some geographical areas are out of favor with WoodMac—notably the UK North Sea, with $2 billion of value destruction (on an $11 billion investment). Worldwide, onshore and shelf environments ‘destroy value’. Only the deepwater and Agip’s ‘Kashagan’ discovery have created value. Acquisitions have provided a 12% ROI—mostly because these deals were done during a low oil price. While there is ‘plenty of life’ left in deepwater, new reserves quality is an issue. The value of the discovered barrel is going down with a move to higher tax regimes, stranded gas, longer lead times and fewer giant fields. Another problem is that investment is constrained by dwindling opportunities which will lead to increased competition.


Rob Ryan described ChevronTexaco’s (CT) portfolio management, conducted by centralized ‘exploration review teams’ (ERT). Since the mid 90s, CT’s wildcat success rates have been constant at around 30%. The average discovery is 50 million bbl. Ryan stated that for CT, ‘The problem is not a lack of investment dollars, we have the money’. Access to opportunities presents ‘some challenges’ but there are significant opportunities. The real issue is efficiency.

Process efficiencies

Ryan believes that the industry should ‘focus on selection and prediction process efficiencies, from technical assessment through risk evaluation review and planning.’ The ERTs were created to ensure consistency in exploration review through multi-discipline risk analysis. A 2002 study compared ERT and asset teams’ evaluations. The asset teams were ‘wildly optimistic’ compared with the ERT evaluations. Ryan observed that, ‘There is no better way to destroy value than the high risk prospect’. Exploration workflows should focus on the basics—amplitude risking standards, seal standards, reservoir quantification standards and hydrocarbon charge standards. ‘It’s Nintendo exploration—plus!’ In 2002 Chevron-Texaco was ‘best in class’ for exploration success according to Deutsche Bank.


Mike Bahorich explained how Apache Corp. gives local units the decision making power—but ‘measures’ centrally and rewards success through the its ‘rule 43’ incentive system. This means that when Apache stock goes through $43 for over 10 days, staff get a 100% salary bonus! Apache is a ‘smart shopper’—buying common off the shelf (COTS) technology at the right price for horizontal wells, 3D seismic etc. Technology Watch is important for Apache—looking out for emerging and especially ‘disruptive’ technologies. Apache is benefiting from the falling cost of storage and now keeps pre-stack 3D seismic on disk.

IHS Energy

‘Get back to exploration’ was the entreaty from IHS Energy’s Pete Stark. There has been a ‘precipitous’ drop in gas discoveries in the last three years. A dramatic change in operator mix has also occurred with a move from the western majors to the NOCs and former NOCs. The exploration slump is a cause for concern. The world has failed to replace production for the last 20 years.

Rig site

Pason Systems will shortly be releasing AutoDriller—control software which maintains constant parameters, especially for horizontal wells. The feedback system is tied to the electronic drilling recorder and adapts to its environment. AutoDrillerruns atop of Pason’s Electronic Drilling Recorder (EDR), a hardware, software and database combo. Epoch Well Services now offers real time data feeds to users of its myWells.com well data gathering and distribution system. Users can follow drilling activity from anywhere over a secure internet connection. GeologixWellExplorer lets companies set up a departmental-level intranet for dissemination of well summaries, logs, and reports. WellExplorer uses Microsoft’s Internet Information Server (IIS) with a SQL server back-end. The software uses Geologix’ ‘GEO’ dynamic document structure, and leverages the emerging WITSML standard.

Data Management

Core Laboratories has expanded its digital data management offering with the Rapid core database and RIB, an HTML-based data archiver. Rapid stores well information, core imagery, thin sections, SEM data, poro-perm, cross plots and photomicrographs. ‘The focus is on rocks.’ Data can be exchanged through LAS, CSV files and Oracle. RIB provides web-based archiving and reporting of data in Rapid. Production Geoscience’s Oilfield Data Manager now sports an ‘integration canvas’ for display of cultural and regional data alongside the geology. ODM offers data management, correlation displays and wells and surfaces in 3D. ODM is used by Shell to QC data before entry into the corporate database and by Saudi Aramco for stratigraphic correlation. The 2004 release of Fugro-Robertson’s Tellus database adds 8 million data points of geochemical source rock and seep data. On-the-fly mapping from the database includes petroleum systems and chromatography plots. The OilTracers web sites offers free searching of an oil sample library—a database of over 33,000 oil, gas and rock samples from all over the world. A second product, OilRef, holds over 11,000 citations from 300,000 pages of geochemical literature. Zebra GeosciencesEZDataRoom is an electronic data room. Well log and SEG-Y data can be viewed from a web browser. Data remains in the data room and does not needs to be passed to a user—enhancing security. If required, configurable user-based security allows for printing and download of information. Both Seismic Micro Technology and TerraSciences are developing OpenSpirit data servers for their interpretation software. These will simplify integration with other vendor interpretation packages.


Geoff Dorn, from the BP Center for Visualization at the University of Colorado, has developed patented technology (originally from Arco) for automated fault extraction (AFE) from 3D seismic data volumes. The software will likely be commercialized as a plug-in to Paradigm’s VoxelGeo. LithoTect Interpreter from Geo-Logic Systems is a low cost version of Geo-Logic’s geological map, well, seismic, cross section, and 3D interpretation tool. Interpreter includes depth conversion and well picking, monitoring, and projection capabilities. Interpreter is a ‘pure’ Java application that runs on laptops and workstations. GMI Imager from GeoMechanics International now has ‘write back’ capabilities with Landmark’s OpenWorks. Imager analyses can be written back to the database for correlations and other applications.

New technology

The Kansas Geological Survey was showing elements of the new North American Cyberinfrastructure—an electronic grouping of various geological resources across the USA. One component—the GEON Grid seismic infra-structure is a federation of ArcIMS servers supporting the National Carbon Sequestration database. CHRONOS is a national stratigraphic portal providing access to distributed databases across the country. Parts of the Cyberinfrastructure leverage emerging standards for ontologies using semantic web standards like OWL. Isatis V5.0 from Geovariances adds multi-Gaussian simulation—a ‘pixel based’ technique. Isatis can be used in stand-alone mode, or coupled to Petrel, Gocad, RMS, RML, and PowerModel. According to Geovariances, ‘vendors are now offering Isatis links within their own packages’. Schlumberger was showing its ‘Chaos’ Cube—a Coherence Cube look-alike that highlights high density faulting and fractures. The Chaos attribute is thought to react to the presence of fluid and ‘may provide a 3D picture of gas migration’.


Sclumberger was showing Gigaviz on a 16-node Linux cluster which was down. GigaViz offers a lot of sophistication for image processing and ad-hoc, rule based voxbody extraction. But the demos fail to capture attention in the way that Magic Earth does. 4D Vista from Midland Valley is described as an ‘Adobe Acrobat for 3D’ and now links to 2DMove and 3DMove toolsets to provide ‘an integrated structure analysis workbench’.


A new adaptor for Neuralog’s Neura-Scanner lets you scan transparent (film) logs with transmitted light. SeeReal Technologies was showing novel ‘glasses-free’ true 3D visualization. An eye-tracking device on the display adjusts the 3D display to the user’s head movements.


Dave Abbot, consultant, warns all you deal makers out there that deal promotions are subject to anti-fraud provisions of state and federal law. ‘Transparency’ is the key to dealing with investors. ‘Violation could result in you losing your home’! Evendi et al., (ChevronTexaco) described an XML schema for kinetic data in GoCad. Gary et al., Tramontane Inc., described Unocal’s web portal for biostratigraphy and log-derived sand count. Hodge et al., (Midland Valley) combine digital elevation model (DEM) with satellite imagery and structural modeling. Larue, (ChevronTexaco) claims field maturity does not necessarily equate to reduced volumetric uncertainty. Larue showed examples of uncertainties of over 50% in mature fields. Databases and reservoir modeling studies ‘downplay the importance of depositional environment on recovery’. Loseth et al., Norsk Hydro have collected 3D digital outcrop data with GPS and laser scanners. A fluid flow model integrated surface core data and other ‘behind the outcrop’ data including shallow seismic and ground penetrating radar. Comparisons with less constrained models showed the importance of capturing true reservoir heterogeneity. Preston et al., HRH Ltd. use Bezier curves to categorize lithological units. These are stored along with geological data such as grain size—and can be scaled and integrated with other digital data such as wireline and MWD.

This report is abstracted from a 25 page illustrated report produced as part of The Data Room’s Technology Watch Reporting Service. For more information on this subscription-based service please email tw@oilit.com.

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