By MIKE FORREST
'Bright' Investments Paid Off
|Editor's note: This is the third of three articles by Mike Forrest, working in collaboration with Marlan Downey, on the application of "bright spot" technology, which helped Shell discover many large oil and gas fields in the Gulf of Mexico during the late 1960s to the late 1980s. Forrest also wants to thank the several former Shell Offshore employees -- especially Jim Funk -- who made contributions to this article.||
Area-wide lease sales, inaugurated in 1983, provided the oil industry an opportunity to explore for oil and gas in the deep water Gulf of Mexico, a southern extension of the oil-rich offshore Louisiana shelf province.
Key to Shell's success in reducing risk in this high-cost environment was use of a direct detection of hydrocarbons technique, commonly called "bright spots."
All of Shell's exploration wells in this play were selected to penetrate "bright spots." The largest discoveries were found to have the added benefit of deeper oil sands, where the seismic had weak or no visible amplitude anomalies.
Winning the Bid
By 1983, Shell's Cognac field was producing in 1,000 feet of water, and Exxon, Unocal and Conoco had oil production in fields of similar water depths.
In the first area-wide Central Gulf lease sale, leasing was brisk in water depths out to about 2,500 feet, concentrating in an area a few miles from the 600-foot water depth shelf edge. Shell, under the leadership of Billy Flowers, offshore vice president, and Doug Beckman, exploration general manager, leased several prospects and discovered Bullwinkle Field, which held about 150 million barrels. All of Shell's bids and drilling locations were based on detailed "bright spot" studies.
In the spring of 1984, several oil companies won leases on salt-related prospects in deeper water. Shell cautiously made only a few bids because of economic concerns, especially about technology available for deep-water subsea wellhead completions. Tom Velleca, general manager of geophysics, urged the offshore division to organize a team to search for opportunities in the Garden Banks area, western Gulf of Mexico.
At this time, I was named general manager-exploration for Shell Offshore and, during the next three years, was part of the team that discovered several major oil and gas fields in the deep water Gulf of Mexico.
Shell shot a proprietary grid of seismic over its Garden Banks area leases, and Auger was identified as the prospect with the most potential.
Two strong amplitude anomalies with good downdip structural conformity were observed at depths of about 15,000 feet on the salt dome's west flank. The "bright spots" extended west from Shells' acreage onto two adjacent unleased blocks.
Geophysicist Mike Dunn mapped a deeper anomalous amplitude at a depth of 19,000 feet, but data quality at this depth made the zone speculative.
Shell won the adjacent blocks in the 1985 sale with no competition. It was early in 1987 before Auger was drilled.
Guaranteeing a Pay-Off
Meanwhile, Shell management began discussions about expanding the "bright spot" play into water depths of 3,000 to 6,000 feet.
Critical technical factors in these water depths were the needs for thick continuous sands and high flow rates to allow profitable large fields. Shell teams mapped salt ridges and associated north-south trending regional synclines, where sands from the ancient Mississippi River system might have "funneled" into deep water.
Two newly released logs from dry holes drilled by other companies showed thick sand packages. The probability of commercial reservoirs in deep water greatly increased. Seismic sequence packages helped identify the submarine fan facies because the seismic reflection continuity was much better than that in the shallower channel and levee sequences.
Exploration management asked the production department for guidelines for field size needed to be economic in water depths between 3,000 and 6,000 feet. Gene Voiland and Carl Wickizer, production department managers, boldly stated that if the exploration group discovered fields of at least 100 million barrels, the engineers would find a way to make Shell's deep-water discoveries economic.
While these exploration and economic studies were in progress, Shell drilled an exploration test in 3,000 feet of water on Prospect Powell, mapped by Bill Trojan and leased in the 1984 sale. The well was planned to penetrate a very strong shallow amplitude anomaly and a deeper, poorer quality amplitude anomaly that was located on a weak south-plunging nose.
Drilling indicated the shallow anomaly was not associated with commercial hydrocarbons. However, Don Frederick, division exploration manager, excitedly reported a 40-foot thick oil pay at the deeper level.
Appraisal drilling and a 3-D seismic survey showed the deeper trap was stratigraphic -- a submarine fan with channel and levee deposits and many thin laminated sands.
Shell and Amoco are developing the 250 million barrel field, called Ram-Powell, using a tension leg platform.
The Shell deep water successes, especially the large production rates and reserves per well at Auger, caused the oil industry to be more optimistic about deep water economics, and other companies began competitive leasing and drilling programs.
This past January, Shell stated that it had interests in about 40 deep water discoveries, with 12 fields on production and an additional four fields under development.
Shell has participated in half of the eight billion barrels oil and gas equivalent discovered to date. They operate 600,000 BOE/D of the 1.2 MMBO/D production in the deep water, and Shell working interest production is about 400,000 BOE/D.
The company spent over $1 billion, including expensive dry holes, before having enough data to be confident of a successful play.
Of course, profitability is sensitive to oil prices, and there are many technical challenges in deep water -- but the combination of large reserves and technology application should result in very favorable economics.
What did I learn from the deep water exploration play of the mid/late 1980s?
Is this the way it really happened?
Maybe ... at least,
that's the way I remember it.