Carlos Dengo (ExxonMobil) opened the ‘executive session’ on the state of R&D in the oil and gas industry noting the impact of ‘a changing business environment, increased competition, new technology and environmental concerns.’ Co chair Salvatore Meli (ENI) added that hydrocarbons will dominate energy supply ‘for decades,’ which implies finding increasingly complex reservoirs and which will require an ‘extraordinary R&D effort.’ Meli asked, ‘Is the R&D community ready?’
Pat Corbett, professor of petroleum geo-engineering Herriot Watt university, appears to think it is not. Corbett believes we may even be on the edge of a Petroleum Engineering ‘mass extinction.’ This flies in the face of plans for increased hydrocarbon production and what should be a golden age for R&D on the reservoir, on recovery, and CO2 sequestration and use. But the reality is that there is little public funding, less IOC funding, and unhelpful educational strategy, an now, ‘corporate universities’. Corbett claimed that, ‘None of us in this room believe in Peak Oil. We believe in the Shell blueprint with a peak circa 2030.’ But others, notably university planners are less optimistic. Corbett cited Statoil’s Leif Magne Meling who has equated the world’s needs to finding another Saudi Arabia in the next five years! Currently the UK government is putting 2% of R&D funding into oil and gas—about the same amount as into CO2. Even then, some argue that, with oil at $120, 2% is too much!
Len Srnka (ExxonMobil), citing ExxonMobil’s study on ‘The Outlook for Energy,’ predicted a 30 to 35% hike in oil demand by 2030 to conclude that a ‘perfect storm’ is brewing for R&D on various fronts including new data types such as controlled source electro magnetics (CSEM). High performance, sustained ‘petaflop’ computing will be here by around 2015. ExxonMobil expects to have several hundred TFLOP jobs running by 2012. Marine resistivity, Srnka’s speciality, has helped Exxon’s drilling success rate—and is ‘a powerful tool when combined with seismic.’ On the ‘CO2 challenge,’ ExxonMobil is ‘as concerned as anyone about what its impact may be on the environment.’ Srnka reckons we need to ‘retire all coal plants and replace with nuclear and/or clean coal. Srnka concluded that the ‘sun is beginning to peek out from behind the storm clouds,’ thanks to data integration, next generation computing and new learning paradigms. For researchers, cash and ‘consistency’ are required. ExxonMobil’s funding is ‘decoupled from the oil price, possibly a bit contrarian and definitely long term.’
Rob Helland enumerated several of StatoilHydro’s recent R&D projects emanating from the merger last year. A ‘next generation’ seismic interpretation has been developed in collaboration with Landmark (see below) and Statoil has been working on cluster-based high performance imaging for seismic processing. A Google Earth based data visualization tool originally developed by Hydro has been enhanced and re-baptized StatoilHydro Earth (SHE). On the drilling front, StatoilHydro, with Shell, is backing an autonomous seabed drilling unit, the Badger Explorer.
Ibraheem Assa’adan described a key element of Saudi Aramco’s R&D as the goal of increasing recovery from the current 50% to 70%. For Aramco, a 1% hike in recovery equates to 30 billion barrels, i.e. one year of world consumption. Contributing to this effort are next generation petrophysics, the Powers II simulator (which will be capable of running 258 million cell models next year), the i-field and ‘extreme’ reservoir contact wells.
BP’s position on technology, according to Michelle Judson, has evolved from the time when BP just selected ‘best in class’ implementations from contractors. Today, BP identifies ‘flagship areas’ for technology investment. Examples of these include seismic imaging—60% of BP’s Gulf of Mexico reserves are subsalt. Their discovery required a ‘leap of faith’ and a deep capability in modeling. BP collaborates with peers on fundamental research, but for Judson, there comes a time when you need a commitment to the proprietary development of a proof of concept. After which, BP returns to a collaborative model for ‘at scale’ implementation. Examples of BP’s R&D successes include wide azimuth seismics, ‘Bright,’ a polymer that opens up like popcorn in hot zones to shut off high permeability areas to redirect injection and the field of the future. Questioned on BP’s stance on the intellectual property (IP) of its R&D effort, Judson described BP’s stance as ‘defensive, not offensive.’ IP can go either way (oil or contractor) but it needs to go to the ‘natural owner’.
In the general Q&A, Corbett asked why have oils stopped sponsoring much R&D and why they were still laying people off! ‘Western Europe has a problem—if you want to work in oil and gas, move to Saudi Arabia!’
After the R&D session we rushed over to the Landmark booth for the ‘next generation’ seismic interpretation system presentation. This $13 million, three year project is Landmark’s largest ever. Statoil’s Rolf Helland described how Landmark’s DecisionSpace interpretation toolset is being extended to support ‘all inclusive’ basin to prospect analysis with a common GUI, fast data access, third party integration and traceability. A demo showed how ‘continent-scale’ super regional work can begin, even in the absence of seismic and well data, by using maps and sections from published reports. The regional picture can be carried forward into conventional interpretation—a functionality that has been lost with the move to digital/workstation based interpretation. The question remains as to why the project stops at the prospect level and does not carry through to the reservoir.
Along with the R5000 DecisionSpace launch (see back page), Landmark unveiled its new EarthModel ‘hub’ product scheduled for release next year. This is to extend Geographix’ integration strategy of seismic to simulation and reservoir to basin modeling. EarthModel will offer ‘in memory’ modeling with a small number of integrated applications—not separate products as before. Neither will it be a ‘monolithic’ application. EarthModel promises a high resolution, scale independent geological model. The vision is for an easy to use, state of the art mapping system producing ‘simulator friendly’ grids. Uncertainty, risk/portfolio analysis and custom workflows also ran. EarthModel will also leverage Landmark’s ‘exclusive’ agreement with Geovariances for its geostatistics API.
Schlumberger was showing off the latest, 2008.1 incarnation of its Petrel modeling flagship, with what is described as a ‘unified’ seismic to simulation workflow. Fluid flow simulation history can now be imported into Petrel and ‘GeoFlows,’ stream simulation models, can be run from inside the geological model. Multiple realizations can be performed to ‘map’ oil in place. According to Schlumberger, 18 out of the 20 top oil producers use Petrel which is used in some 600 companies. The product is showing ‘50% year on year growth.’ By our reckoning, that would be north of a quarter of a million corporate clients for Petrel in ten years or so! A presentation at a pre-conference workshop highlighted Petrel’s integration capabilities—although one user pointed out that integration with third party was basically impossible without a plug-in.
Another Schlumberger presentation showed how DecisionPoint running on Microsoft Office Share Point Server (MOSS) could address more complex E&P tasks than Petrel. With such stand alone applications, data and documents can be lost and it may be hard to track decisions and understand the process. Enter MOSS ‘smart workflows’ for field development planning (FDP). This has been developed under a Schlumberger Microsoft alliance. MOSS tracks tasks, and captures documents and structured data. An FDP demo showed activity in the Ship Shoal area, where MOSS supported weekly team meetings and asset reviews. Risk analysis and Petrel subsurface workflows could be kicked-off from ESRI GIS or Google Earth. The project has been documented in a Shell paper (SPE 99482).
Exprodat rolled out Team-GIS Acreage Analyst (TGAA) at the show, an ArcGIS-based tool for ‘common risk segment analysis’ and acreage ranking. TGAA is used to evaluate and rank acreage opportunities. Ranking workflows can be standardized, automated and rapidly iterated to produce maps of basin and play fairways. Multiple inputs including depositional environment and paleo-geography can be combined to create component risk maps for key petroleum system elements such as reservoir, source and seal.
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