It’s where the elephants are

Deepwater Exploration Still Beckons

Onshore hydrocarbon production appears destined to be around well into the future – especially considering the success and increasing popularity of the ubiquitous shale gas plays, which originated in the United States.

In fact, today’s search for shale plays is heating up on the international scene as well, including various European locales, China other regions.

But as global hydrocarbon demand increases, the industry’s principle focus will be on the offshore deepwater and ultra-deepwater environments as the operators home in on the major hydrocarbon supplies that will be needed in the future, according to Alex Chakhmakhchev, senior manager at IHS customer care.

“My thinking is that demand is still high and will push oil and gas exploration far away from shore,” Chakhmakhchev said. “In the U.S., when the dust settles, there will be new regulations, but we’ll still explore in the deepwater (DW) and ultra-deepwater (UDW) environment.

“I believe operations can be safe, and we can avoid disasters like this,” he said, referring to the recent leak in the Gulf of Mexico “and drilling will resume in the near future.

“Our message is that the deepwater environment is becoming a key source of new reserves,” he added, “and onshore is running out of steam globally.”

Trending

Chakhmakhchev noted that when oil prices were spiraling upward a few years ago, companies were drilling at a near-frenzied pace and had every opportunity to find hydrocarbons. Yet they achieved moderate success onshore where many giant producing fields are reaching maturity.

Oil-rich, under-explored/produced Iraq is perhaps the only place remaining for significant discoveries onshore. Still, the war-torn country must achieve some level of political stability before this can even begin to happen.

IHS data indicate that in the last 10 years, more than half of new global oil and gas reserves were discovered offshore. The DW and UDW are becoming the dominant source of new reserve additions, accounting for 41 percent of total new reserves based on a statistical evaluation of discoveries between 2005 and 2009.

Chakhmakhchev noted this trend is expected to continue, making offshore and the deepwater in particular the key contributor to new reserve and supply growth.

The DW and UDW are defined as greater than 1,312 feet and greater than 4,921 feet, respectively, in IHS’s global overview of offshore oil and gas operations for 2005-09.

“We found in our study, which was aimed at identifying new plays in deepwater settings worldwide, that companies are drilling fewer wells in shallow water, but the deepwater rate is still strong and growing despite the economy,” Chakhmakhchev said.

Deepwater Discoveries

The 2005-09 study revealed that over the last five years, major deepwater discoveries of oil and gas (41 BBOE, proven and probable) occurred in:

  • Brazil.
  • United States.
  • Angola.
  • Australia.
  • India.
  • Nigeria.
  • Ghana.
  • Malaysia.

Countries where deepwater discoveries were made for the first time are:

  • Ghana.
  • China.
  • Russia.
  • Mexico.
  • Trinidad & Tobago.
  • Mozambique.
  • Cameroon.
  • Libya.
  • Cuba.

New plays have been discovered in deepwater in:

  • Brazil.
  • Ghana.
  • Israel.
  • Malaysia.
  • India.
  • Norway.
  • Mexico.

“These new plays were not known either on- or offshore prior to 2005,” Chakhmakhchev said, “and represent new concepts of hydrocarbon accumulation in deepwater.

“Almost 20 BBOE were reported discovered since 2005 in sub-salt Cretaceous deposits in Brazil,” he said. “Although the Brazilian discoveries represent a new play type in the Santos Basin, this geologic setting is not unique. In fact, about 30 BBOE were discovered globally in sub-salt Cretaceous reservoirs.”

A headline-making natural gas find occurred offshore Israel when Noble Energy discovered the world class Tamar field in a Lower Miocene structure in the Levantine Basin. Estimated reserves are reported to be 6.3 Tcf.

Global exploration in 2009 located nearly 500 new fields outside inland U.S. and Canada, and 160 of these were offshore. Chakhmakhchev emphasized that the largest and most prolific offshore producing regions are often adjacent to and/or extensions of onshore petroleum systems.

“For the companies, the deepwater and ultra-deepwater are the only areas where you can find significant discoveries again,” he noted. “Also, the majors and super majors have a competitive advantage in this environment – it’s where they can go and show their strength.

“The bottom line is we have to go deepwater,” he said. “We have to go deep to find the oil and gas.

“There’s no alternative.”

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At ICE 2010...

Alex Chakhmakhchev
Alex Chakhmakhchev

Alex Chakhmakhchev will present the paper “Global Overview of Recent Exploration Investment in Deepwater – New Discoveries, Plays and Exploration Potential,” at 8:25 a.m. Tuesday, Sept. 14, at the AAPG International Conference and Exhibition in Calgary.

Emphasis: International Conference