EXPLORATION METHODS

The days where oil was visible from seepage are  long gone. Most oil exploration depends on highly sophisticated technology to detect and determine the extent of these deposits using exploration geophysics. Areas thought to contain hydrocarbons are initially subjected to a gravity survey, magnetic survey, passive seismic or regional seismic reflection surveys to detect large-scale features of the sub-surface geology. Features of interest (known as leads) are subjected to more detailed seismic surveys which work on the principle of the time it takes for reflected sound waves to travel through matter (rock) of varying densities and using the process of depth conversion to create a profile of the substructure. Finally, when a prospect has been identified and evaluated and passes the oil company's selection criteria, an exploration well is drilled in an attempt to conclusively determine the presence or absence of oil or gas.

Oil exploration is an expensive, high-risk operation. Offshore and remote area exploration is generally only undertaken by very large corporations or national governments. Typical shallow shelf oil wells (e.g. North Sea) cost US$10 – 30 million, while deep water wells can cost up to US$100 million plus. Hundreds of smaller companies search for onshore hydrocarbon deposits worldwide, with some wells costing as little as US$100,000.

HIGH RISK

Hydrocarbon exploration is a high risk investment and risk assessment is paramount for successful exploration portfolio management. Exploration risk is a difficult concept and is usually defined by assigning confidence to the presence of five imperative geological factors. This confidence is based on data and/or models and is usually mapped on Common Risk Segment Maps (CRS Maps). High confidence in the presence of imperative geological factors is usually colored green and low confidence colored red. Therefore these maps are also called Traffic Light Maps, while the full procedure is often referred to as Play Fairway Analysis. The aim of such procedures is to force the geologist to objectively assess all different geological factors. Furthermore it results in simple maps that can be understood by non-geologists and managers to base exploration decisions on.

SEISMOLOGICAL SURVEY

Most commonly, seismology is used to locate deposits. Shock waves that pass through hidden rock layers and interpreting the waves that are reflected back to the surface.

In seismic surveys, a shock wave is created using:

* A compressed-air gun, by shooting pulses of air into the water.

* Explosives - detonated after being thrown overboard.

The shock waves travel beneath the surface of the Earth and are reflected back by the various rock layers. The reflections travel at different speeds depending upon the type or density of rock layers through which they must pass. Sensitive microphones or vibration detectors detect the reflections of the shock waves - hydrophones over water, seismometers over land. Seismologists interpret the readings for signs of oil and gas traps.

REDUCING THE COST OF EXPLORATION

Automation is the key to reducing the cost of finding oil deposits. One way of doing this is to employ robots. Robot ships are now possible due to improvements in autopilots linked to COLREGs compliant navigation. Such a system is being developed for a low maintenance hull that is powered by a patent mix of energy harnessed from nature.

A consortium of British engineers are working on providing such a prototype ship in the next few years that is suitable for oil exploration. Funding is difficult to secure for such projects and risk share partners are being sought. The groundwork for such a ship is being laid in the testing of the Bluefish model, the build of which is a current feature. It is hoped that sufficient interest from corporations and governments might secure testing of this hull from 2014. A Bluefish hull variation is ideal for equipping with hydrophones as a 100-200 meter array with between 50-100 hydrophones.

Given that the ship is a robot, it may cruise 24/7 on a predetermined mission with instant feedback of findings to a shore based operations room. Once oil is located, the mission may be reprogrammed, or placed into drone mode. Using a small fleet of such robot survey ships, the time of survey may be reduced, along with the manning and operational overheads.

PERSISTENT MONITORING

Robot ships may also be used for routine monitoring duties as a preventative measure to guard against oil leaks, the clues for which are usually there if one is looking for them with the right equipment.

OIL OWNERSHIP

Petroleum resources are typically owned by the government of the host country. In the USA most onshore (land) oil and gas rights (OGM) are owned by private individuals, in which case oil companies must negotiate terms for a lease of these rights with the individual who owns the OGM. Sometimes this is not the same person who owns the land surface. In most nations the government issues licences to explore, develop and produce its oil and gas resources, which are typically administered by the oil ministry. There are several different types of licence. Oil companies often operate in joint ventures to spread the risk; one of the companies in the partnership is designated the operator who actually supervises the work.

Tax and Royalty - Companies would pay a royalty on any oil produced, together with a profits tax (which can have expenditure offset against it). In some cases there are also various bonuses and ground rents (license fees) payable to the government - for example a signature bonus payable at the start of the licence. Licences are awarded in competitive bid rounds on the basis of either the size of the work programme (number of wells, seismic etc.) or size of the signature bonus.

Production Sharing contract (PSA) - A PSA is more complex than a Tax/Royalty system - The companies bid on the percentage of the production that the host government receives (this may be variable with the oil price), There is often also participation by the Government owned National Oil Company (NOC). There are also various bonuses to be paid. Development expenditure is offset against production revenue.

Service contract - This is when an oil company acts as a contractor for the host government, being paid to produce the hydrocarbons.

MAGADISHU, SOMALIA 6 AUGUST 2013

Somalia's government has signed an oil and gas exploration deal with a newly formed British company, the first such agreement by a central government in Somalia following decades of conflict.

The deal with Soma Oil and Gas allows the company to conduct seismic surveys in Somalia's territorial waters and in limited onshore regions.

The company's chief executive, Robert Sheppard, said Tuesday that Somalia remains significantly underexplored in the oil and gas sector despite recent discoveries across East Africa. Uganda, Kenya and Tanzania are among nations with recent discoveries.

Somalia's Mogadishu-based government said it expects the deal will attract new development "in an area of immense economic potential" for the nation.

Somali and African Union troops ousted Islamic fighters from Mogadishu in 2011. Al-Shabab militants still control much of southern Somalia.

NOSCA – the Norwegian Oil Spill Control Association – was established in 1992 to satisfy a common need within the industry, the oil companies and public institutions to join forces and resources in order to improve the overall knowledge base of oil spill prevention and response. The need for a joint international promotion of the Norwegian oil spill technology and products was certainly also of importance to NOSCA’s members representing the industry.

NOSCA with its over 30 active members has achieved international respect as an active player in R&D, oil spill prevention and response.

NOSCA is one of the three founding organizations of INTERSPILL in Europe and we also support and contribute to the successes of IOSCE in the US and SPILLCON in Australia.

Register for the NOSCA Seminar 2013 which will be arranged from September 09 - 13, 2013 in Lofoten/Norway.

The Norwegian Oil Spill Control Association

P.O. Box 125
NO-3191 Horten, Norway

Tel.: +47 33 03 48 25
Fax.: +47 33 03 48 26
E-mail: info@nosca.no

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