Petroleum Exploration

Concepts and Techniques

 THE PETROLEUM BUSINESS

EXPLORATION DEVELOPMENT&PRODUCTION REFINING&SALES

E&P
Upstream Oil and Gas Life Cycle
The E&P Business Model
Licensing/Acquisition
Licensing/Acquisition
Licensing/Acquisition
 Licensing/Acquisition
ISRAEL
EGYPT

CANADA
 Licensing/Acquisition

• The activities of the acquisition phase of the project must

focus on finding the land where preliminary public or private
data indicates the possibility of securing a promising block/area
that qualifies as legal, safe and potentially viable for oil
exploration.
• Promising means the land is located in a basin with seismic
and geological conditions that indicate hydrocarbons are most
likely to be trapped or where commercial petroleum deposits in
the subsurface have already been found in the past.
 Licensing/Acquisition

• A promising block/area must also be free of any critical social,

political or security risks and/or environmental restrictions that
might jeopardize or disable the possibility of successful
development.
• Procurement to secure the land thru a concession/contractual
system must represent the main efforts of the professional land
team. The signing of a land contract to acquire the acreage
must be the milestone to accomplish in this phase of the
project.
Exploration
The E&P Business Model
 Exploration

• Once the acreage is available for exploration activities, an

aggressive plan needs to be put forward to identify subsurface
oil and gas deposits.
• Depending on the scope and comprehensiveness of the plan,
the exploration effort might include the acquisition of detailed
geographical data, airborne magnetic surveys, geochemical
surveys, field geology, petroleum geology studies and many
acres of 2D or 3D seismic data acquisition, processing and
interpretation.
 Exploration

In the exploration phase, a team of geophysicists, geologists

and reservoir engineers must work together to set up, organize
and analyze the information producing the mapping and
interpretation, the expected volumes and the statistical analysis
calculations as well as the evaluation of economics required to
identify a subsurface geological formation likely to produce
hydrocarbon fluids or putting in simple terms: an oil or gas
prospect.
 Exploration

In the exploration phase, a team of geophysicists, geologists

and reservoir engineers must work together to set up, organize
and analyze the information producing the mapping and
interpretation, the expected volumes and the statistical analysis
calculations as well as the evaluation of economics required to
identify a subsurface geological formation likely to produce
hydrocarbon fluids or putting in simple terms: an oil or gas
prospect.
Exploration

Structure map (top) and cross section of a prospect

Exploration
 Exploration

Justification for drilling a prospect is made by assembling

geoscience and engineering evidence of the existence of an
active petroleum system with a reasonable probability of
encountering quality-reservoir rock, a trap of sufficient size,
adequate sealing rock and appropriate conditions for
generation and migration of hydrocarbons to fill the trap.
Further planning and drilling execution of a exploratory well or
wildcat may lead to the successful discovery of oil or gas.
 Exploration

• The discovery well will provide the opportunity to run a set of

tests to collect very important reservoir engineering data
including: initial production rates, reservoir tops, depths,
pressures, temperatures, well logs, mud logs as well as fluids
and rock properties.
•This data is critical to evaluate the reservoir and provide
critical information in the further definition of the Appraisal
and Development phases of the project.
Exploration Techniques
 Exploration

Petroleum accumulates in structural closures

(Anticlinal Theory)

1. Why some structures are barren while

others contain HC’s?
2. Why some contain oil while others contain
gas?
Two Key Questions

1.Has the trap received economic

quantities of petroleum?
2.What types of HC’s are likely to be
present?
Levels of Petroleum Exploration
PETROLEUM SYSTEM

“The essential elements and processes and all

genetically-related hydrocarbons that occur in
petroleum shows, and accumulations whose
provenance is a single pod of active source rock.”

If any of the elements or the processes missing or improperly timed,

no commercial HC discovery can occur!

 Exploration Milestones
• Surface geology (1900)
• Rotary drilling (1920)
• Refraction seismic (1925)
• Electric well logs (1930)
• Analog reflection seismic (1935)
• Mud logging (1940)
• Offshore drilling barges (1950)
• Deepwater drillship (1956)
• Semi-submersible rigs (1964)
• Digital reflection seismic (1965)
• 3-D digital reflection seismic (1978)
• Horizontal drilling (1985)
Exploration

Seismic Interpretation Depth Map Boundary Determination

Petrophysical Modelling (PHIE-SW-NTG)

Bg= 0.0038

Sw (% 20) N/G (Netpay 11m, VOLUME (GIIP)

Por (% 8) based on well logs)
Exploration

Structure map (top) and cross section of a prospect

Appraisal Phase
 Appraisal

Right after a wildcat well has been drilled successfully and a

potentially commercial petroleum discovery has been made,
the team of geoscientists and reservoir engineers has to start
the planning of appraisal phase activities leading to a better
estimation of the size and the extension of the volumes in the
reservoir and its characteristic (shape, potential and limits) in
more detail.
The appraisal phase might require the drilling of one or more
wells to complete the initial definition of the reservoir
Appraisal
Appraisal
Appraisal
Appraisal
Normally, it’s difficult
to defined how many
appraisal well need to
be drilled. The reason
behind that is the
complexity of the
reservoir structure.
Therefore, engineers
need to delineate the
reservoir boundaries to
calculate the total
expected volumes of
hydrocarbons that are
restricted in the
reservoir rocks.
Development Phase
Upstream Oil and Gas Life Cycle
 Development

• The initial definition of the size and extension of the reservoir

signals the completion of the appraisal phase, a better definition
of the field and the initiation of the development phase.
• This phase requires the definition of a field development plan
(FDP) to analyze and consider a set of development options from
which the most technically effective, safest and economical
should be selected to deplete the reservoir generating optimum
return of the investment (ROI).
 Development

Field development planning is the process of evaluating multiple

development options for a field and selecting the best one based
on assessing tradeoffs among factors including:
• NPV (Net Present Value)
• Oil and Gas Recovery Volumes
• Operational flexibility and scalability
• Capital vs Operating Cost Profiles
• Technical, operating and financial risks
 Development

• The preparation of a field development plan (FDP) needs the

coordinated efforts of a multidisciplinary team of land
professionals, geoscientists and reservoir, production, facilities,
drilling and completion engineers whose primary responsibility is
the layout and implementation of the plan whose backbone is
the definition of the placement and design of the wells, the
drilling and completion of the wells and the construction of
surface facilities.

•
Production Phase
Upstream Oil and Gas Life Cycle
 Production
• The production phase focuses on the extraction, pre-processing
(dehydration, de- gasification) and transportation of crude oil and
gas. This phase is characterized for the positive cash flow it is
expected to generate as result of the sale of the produced
volumes of oil and gas as per pre-established contracts.

• In the production phase, oil and gas production rates are

expected to ramp up to a maximum, remain reasonable steady at
the top for a short time and finally decline constantly to an
economic limit at which, the field must be abandoned.
Production
 Production
• If declining production rates are not arrested thru additional
(infill) drilling campaigns, recompletions or enhanced oil recovery
(EOR) projects, the decline will continue until production rates
reach the economic limit of the field

• EOR or Enhanced Oil Recovery programs are designed and

applied to increase oil production rates of a field by systematical
injection of gas, chemicals, steam or carbon dioxide (CO2) in the
reservoir thru injection wells drilled or adapted for that purpose.
Production-EOR
Abandonment
Upstream Oil and Gas Life Cycle
 Abandonment
•Once the field reaches its economic limit, executive
management has to designate an specialized multidisciplinary
team of engineers, regulatory and HSE specialists to stop
production and prepare a plan to close operations and abandon
field. The well abandonment operation is commonly known in
the industry as P&A or plug & abandon.

• To minimize damage to the environment, wells have to be

plugged off permanently to prevent them from leaking above
ground or contaminate subsurface fresh water aquifers, surface
facilities (well equipment and tanks) have to be removed and
land reclamation regulations have to be followed to restore as
much as possible the outlook of the field and associated
ecosystems.
 Abandonment
•Once the field reaches its economic limit, executive
management has to designate an specialized multidisciplinary
team of engineers, regulatory and HSE specialists to stop
production and prepare a plan to close operations and abandon
field. The well abandonment operation is commonly known in
the industry as P&A or plug & abandon.

• To minimize damage to the environment, wells have to be

plugged off permanently to prevent them from leaking above
ground or contaminate subsurface fresh water aquifers, surface
facilities (well equipment and tanks) have to be removed and
land reclamation regulations have to be followed to restore as
much as possible the outlook of the field and associated
ecosystems.
The E&P Cycle
The E&P Business Model
Three Main Work Phases
Exploration
Development
Production
The E&P Business Model