PESGB June 2000
President’s Page- Richard Milton-Worssell
PESGB celebrates its the 35th Anniversary this year. This month in Aberdeen and next in London, Miles Newman, Exploration Manager of Kerr McGee, gives the 1st President’s Invitation
Lecture. The theme “E is for Exploration” taken from the “E” in PESGB, I hope that my successors will take on the challenge of a summer lecture on “Exploration”. PESGB was founded by Explorers, they knew the oil business and recognised it was explore or die.
As it is June and the summer is looming I thought I would pose the question “Do we as an industry understand Oil Finding, Risk and Uncertainty?” or put another way “Do we just measure everything and then run the latest computer programme and believe the results?”. The great American Oil Finder Wallace Pratt observed “Where oil is first found, in the final analysis, is in the minds of men” in an article “Toward A Philosophy Of Oil Finding” 1952, Dec, AAPG Bulletin. Geologists are taught to observe (look at and touch), and record (describe and measure) and then to think (deduce, analyse, imagine and conclude). This requires both qualitative as well as the quantitative analysis. Computers are very good at the latter, but abstract ideas and observations tend to get lost. Computers do not have imagination, when people do, and without ideas new oil plays are rarely found. How do you risk a new idea in a meaningful way? What value do the numbers have when derived from such risking? How much thinking time do we get? How often do we go and look at the core, or do we send someone else?
The UKCS now has over 6,500 wells (over 3,300 cored), a large number were drilled on “highs” and so possibly on condensed sequences; they mayor may not contain hydrocarbons. The industry then relies on extrapolation from these ” known points”, which mayor may not be representative, using geophysics combined with rock and fluid properties to try to understand the
whole area. The common assumption is made that if it is 3D seismic data it must be good data. Little thought is paid to spatial and temporal resolution and the thinking behind the targeting parameters of the survey, which are rarely recorded. It is time to look hard at “What is known as Hard Fact – Evidence”; “What is commonly known as Well Known Geological Assumptions – Hearsay”, and then think about “What is not known about geological systems in the area.” and ask “What has been missed – the Prize”. When a new prospect is being promoted the numbers are looked at very carefully, but each company has its own ” Pass Mark” . (Of course no one has ever “adjusted the input numbers!?”) Simplistically, all that is needed is a correct “Pass Mark” and an “OK” from the “Risk Committee” and ” Partners”. In working out reserves after the discovery a “reasonable set” of parameters “derived from the single known point” are feed into the “Monte Carlo” simulator, but are the real uncertainties captured or understood, in the resultant numbers? Possibly not, but expensive decisions are based on the results. Later, geostatistics means we drown in maps! How much of this adds to our understanding of the geology? Are procedures being followed because this is what we do next?
One observation from the life cycle of a field. Explorers (Optimists) find Reserves; by the time of development sanction “Developers (Pessimists)” have reduced the Reserves, and continue to do
so during early stages of development drilling. Reserves are then mysteriously “found” again in late stage field life. All the time the numbers were correct! The challenge is to understand correctly the numbers and the error bars associated with them, remembering that these are natural systems that need qualitative observation, imagination and thought as well as quantitative analysis.
Dr M King Hubbert, who in 1956 correctly predicted the peak in US oil production in 1972, observed “Our ignorance is not so vast as our failure to use what we know” we should take this as a challenge to view afresh the geology of the areas we are working.
In conclusion, we as geoscientists need to observe and think more, quantify and risk less. Is ” Risk” really appropriate to Exploration, or is it a late stage development tool for life with larger more robust databases? It is only known that a risking exercise was wrong when someone else drills the discovery well that the risking exercise predicted would be a dry hole. The oil industry suffers from fashion and the misuse and abuse of techniques. The industry seems to rely on numbers because computers produce them so easily, and numbers are understood by economists and financial analysts. In 1952 Wallace Pratt also observed “my experience has forced me to the conclusion that even the most finished art of prospecting, by itself, is not adequate to the task of finding the earth’s oiI. There are other factors which constitute barriers to success in oil finding of such a nature that no perfection of methods and techniques of the search can remove or surmount them.” In the year 2000 our techniques are orders of magnitude better, but how are we applying our minds?
Have a great summer! Correspondence related to this topic may be published on the PESGB website. Yes the above was designed to get you to write in!