EAGE 2013 Conference, London

Non conventionals in Europe. Landmark’s revamped data management. Schlumberger’s volume-based modeling. Kappa on shale gas reserves. BP, Total, Exxon on reserve estimation.

The 75th edition of the EU association of geoscientists and engineers’ (EAGE) conference saw some 7,000 delegates and 350 exhibitors. At the opening ceremony, nobility was to the fore with a welcome from HRH Prince Andrew and a keynote from Lord Oxburg who opined that the next big things will be ‘environmental change, China, social media and big data.’ On the environmental change front there was good news, Arctic Canada and Siberia will be more habitable, elsewhere the news is not so good.

Petrofac CEO Ayman Asgari focused on the ‘long tail’ of oil and gas production coming from hundreds of thousands of fields. Asgari quoted a Pemex chief executive who described Mexico’s oil fields as ‘apples that had each been bitten once!’ Petrofac is developing integrated delivery models that better reflect client needs. These can include local content, training, delivery—whatever is required. ‘Don’t just do it like you do in Aberdeen or Houston, adopt local best practices and people. Look to China, India, and the middle east rather than the OECD.’

Andrew Gould (BG Group) was a bit more sanguine. Opportunities are increasingly closed to private capital as NOCs flex their might. New plays such as unconventional and the Arctic require higher prices and complicate development decisions. Oil and gas is getting more risky. The In Amenas hostage crisis was the culmination of a trend. Today, there are armed guards on tankers and some operations are shut in, ‘costing billions.’ Much of the risk is being borne by the service industry. Unconventionals have raised the industry’s public profile enormously and ‘we need to communicate better.’ Fossil fuel will remain important for a long time.

A Forum on ‘Exploration through 2050’ included a discussion on the role of geosciences in non conventional exploration. There is a sense that shales are homogeneous ‘blanket’ plays requiring relatively little geosciences input. But this has not proved to be the case. Geoscience has a role in the search for ‘sweet spots’ of high TOC, frackable rock. BP’s Mike Daly reported that the Eagle Ford shale is nearly 1,000 meters thick but only 20% is frackable—and the good stuff is not omnipresent. Others reported that unconventionals are about ‘land, water and logistics’ and that the subsurface is ‘not an issue at all.’ Shell’s Alison Goligher

advocated a ‘manufacturing mindset.’ The idea is not to drill a ‘perfect’ well, rather many wells under the curve. Ashok Belani (Schlumberger) opined that, ‘Drilling hundreds of non productive wells as in the USA may not be the best way!’

On the data management front, a presentation on the Landmark stand had SeisWorks on Linux running in parallel with DecisionSpace desktop on Windows 7. Both were synchronized with a single data instance running in OpenWorks R5000. The latter is emerging as a data management platform of choice for some major clients. Data management, cleanup and audit tools are available along with data object unique IDs, date stamps and a dev kit. Landmark intimated that OpenWorks could manage data for 3rd party applications for which we read Petrel.

A Schlumberger booth presentation showed new volume-based modeling technology that has finally made it from the IGeoss acquisition (Oil ITJ April 2010) into Petrel. Tetrahedral volume modeling is set to overcome the limitations of pillar grids in complex tectonics, producing ‘water tight’ simulator-ready models.

Bill Shea (Smart Reflections) was getting a good crowd for his pre stack interpretation workflows. These leverage high-end technology from Fraunhofer for speedy data roaming.

Kappa’s Olivier Houzé presented on estimating shale gas reserves. As we have reported previously, Houzé is circumspect about current bullish shale gas estimates. Shale gas models are all poorly constrained. The popular ARPS methodology raises the question of the ‘infamous’ B factor which wrongly assumes terminal reservoir behavior. Houzé recommends watching closely for changing B factors in year on year reporting. All these issues will be debated at a future non conventional summit to be hosted by the SPE, OGRC and SPEE in September 2014.

Deborah Shields (Colorado State) observed that Europe’s shale potential depends on its being developed and produced. Obstacles to this include water use, access in areas of high population density and environmental concerns. Shale gas may have a negligible impact on gas prices unlike in the US. There is debate as to its ‘sustainability’ and its impact on the development of renewables. Shields’ contribution is the ‘integrated sustainability assessment’ (ISA), a way of selecting between different options. Shields also referred to the IEA’s ‘Golden rules for the golden age of shale gas.’

The reserves evaluation session focused on the Petroleum resources management systems (PRMS) from the SPE. BP’s David MacDonald outlined how the PRMS might dovetail with the widely used 2009 UN Framework Classification (UNFC). This is a potential route to a global classification system including the PRMS and the Chinese, Russian and other systems, a ‘resource Esperanto.’ Also at issue in oil sands reporting is which system to use, PRMS or the mining industry CRIRSCO classification. UNFC reporting is independent of commodity type and free of ambiguous terminology like ‘reserves.’

Pierre-Louis Pichon (Total), who is chair of the SEG’s reserves committee outlined the use of geophysics in resources estimation. The PRMS guidelines include a chapter on seismic techniques with instruction on how for instance un-penetrated fault blocks should be evaluated. The PRMS offers detailed instructions on interpretation and when a well is needed to move reserves from one category to another. The general idea is for a technology framework that demonstrates repeatability and prior success.

A presentation by ExxonMobil’s David Johnston described how the reserves of the Norwegian Ringhorne field were revised following a 4D seismic survey. It took an accidental discovery and 18 appraisal wells drilled over a 30 year period to kick-off the Ringhorne development, the ‘the most expensive golf course in Norway.’ The reservoir is ‘completely transparent’ seismically and was only properly imaged on 4D data seven years after initial production. The 4D data led to a 60% hike in Ringhornes’ proved plus probable reserves. In the Q&A Johnston opined that 4D seismic could be considered as ‘reliable technology’ in the SEC’s classification—but, like all geophysics, this is a case-dependent call. More from the EAGE in next month’s Journal.

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