10 years deepwater has been the global exploration mantra, for good
of massive fields have been uncovered from primarily three main
regions -- the Gulf of Mexico, offshore Brazil and offshore Angola
and Nigeria in West Africa.
as with any oil or gas province, maturity is a fact of life -- which
begs the questions:
deepwater potential remains, and where will the big new discoveries
according to experts who will be sharing their information during
the AAPG International
Conference and Exhibition in Cancun, Mexico, is -- a lot.
significant resource base remains to be found, perhaps as much as
what has already been discovered," said Chandler Wilhelm, who is
co-chairing a session in Cancun on global deepwater operations and
is left behind will present new challenges, Wilhelm believes, and
often involve different plays than what industry already has harvested.
these plays are unproven, so we still have much to learn about the
deepwater," he said.
is manager of exploration-new business development (America's region)
for Shell Oil. His co-chair is Adan E. Oviedo-Perez with Pemex.
there are challenges -- not only in discovering new volumes, but
also in commercializing deepwater resources that already have been
development solutions, stranded gas solutions, effective appraisal
and shortening the time from discovery to market are all keys to
commercializing the existing undeveloped deepwater reserves," Wilhelm
no small challenges. While a large discovered but undeveloped resource
base remains to be commercialized, the costs associated with that
effort are equally large.
involved and staff requirements to take discovered volumes, get
them appraised, identify the optimal development solution and reach
development sanction usually exceeds what it takes to actually find
the discovery," Wilhelm said.
key for future deepwater exploration and development is natural
impediment for economically developing oil in frontier deepwater
settings is associated gas," he said. "Most companies have policies
forbidding flaring gas, but most countries do not have well developed
gas markets, so any gas typically is reinjected -- a costly affair."
and markets eventually will be developed that will allow companies
to actively explore for natural gas in deepwater settings -- perhaps
globalization of LNG or expanding local gas markets, according to
mean a second wave of exploration in deepwater regions," he said.
"There is plenty of stranded gas in the world today that must be
developed first, but at some point in the future tremendous natural
gas resources from deepwater settings will become economically profitable
and be an important worldwide resource."
Gulf of Mexico, Brazil and offshore West Africa will continue to
be the deepwater exploration focus for the near term, Wilhelm indicated
there are many smaller opportunities in other regions that could
companies look for the combination of favorable geologic factors
supported by attractive economic parameters," he said. "In general,
companies have been most successful exploring in Tertiary deltaic
systems on mobile substrates that provide a multiplicity of traps,
an active and robust petroleum system, reservoirs that can deliver
the high rate ... wells need for commerciality, and play longevity
to realize sustained returns from the initial investment stream.
plays also are emerging that target older Mesozoic," he added, "but
deepwater basins are not uniformly prospective. Finding sweetspots
with the right combination of factors can yield very attractive
financial returns. Just being in the neighborhood is not good enough
-- and is a recipe for value destruction."
must have enough density and reproducibility of drill sites to allow
for economic development in deep water, according to Wilhelm.
the first infrastructure hub that makes the most money. The key
is the potential that first hub unlocks -- that's why Tertiary deltas
tend to be areas where a lot of value is created. After the infrastructure
hub is established there are multiple opportunities for satellite
fields, infield drilling and field optimization. In some cases the
bulk of the value is created through infield drilling, facilities
upgrades, and tying back near field opportunities."
said virtually every potential deepwater margin in the world will
see some licensing round or some industry interest. However, this
activity will be limited by the availability of spec seismic data,
which is a key enabler for exploration activity.
deepwater provinces include both sides of the North Atlantic, parts
of the Caribbean, part of Southeast Asia (Indonesia and China) and
even the Mediterranean rim.
there are some places where industry has already bent its pick that
likely won't attract additional investment," he added.
oil prices are not all that meaningful for deepwater projects that
can take years to bring to fruition, but Wilhelm said strong commodity
prices over a prolonged period of time could generate activity in
what would otherwise be marginal ventures or in difficult operating
examples of high signature bonuses in places such as Sao Tome, he
said, suggest that this bullish view may be influencing some companies.
water depth standpoint, Wilhelm said the ultimate limitation will
be geological, not technological.
as you move into ultra deep settings, onto oceanic crust and away
from continental margins and their clastic delivery systems, you
will eventually run into questions about adequacy of the petroleum
system and the whole model of Tertiary deltas on mobile substrates,"
he said. "There won't be enough structure, there won't be an active
tend to go out about as far as you can get, so we rarely see plays
where reservoir limitations are the constraining factor," he continued.
"Modern seismic of modern-day abyssal plains show channels going
far past their underlying geologic prospectively.
is fundamentally about the petroleum system."