What's New in Exploration

I am being asked constantly, “what will the oil price be in six months?” So far, my guess is correct, but if I knew this with any certainty, I would be buying puts or calls, not writing about it. 

Same goes for perfect technology or methodology. If I had one that could always find oil, would I publish it on a national stage, or allow staff to even talk about it? I have paid for my decisions to work the “patch” with having to find “a real job” occasionally, along with going broke twice or so, trying to get rich. Access to technology, or oil, has a price.

But when I look at headlines like this one—“Exxon bows to oil crash with historic global reserves cut” (World Oil daily news, Feb. 24, 2017)—I realize that I have no problems. Exxon knew last October that the result of the market blow-up was not going to require a bandage, but rather, a transfusion. Yet, they go ahead and expand exploration in Papua New Guinea, Indonesia and elsewhere. Great idea!

There’s more! Under my theory of never give up, never surrender, we have this—“Exxon Mobil sets record in high-performance oil and gas reservoir computing” (World Oil daily news, Feb. 17, 2017). In this item, Exxon Mobil, working with the National Center for Supercomputing Applications (NCSA), said that it has achieved a major breakthrough with proprietary software, using more than four times the previous number of processors used on complex oil and gas reservoir simulation models, to improve exploration and production results. 

What’s new. The need does exist to look into the technical crystal ball from time to time. One of my secrets, which I do not want my editor to know about, is to examine the “call for papers” that each professional society uses to ask members to participate in technology transfer. Since the call is from folks who are smart, but have a history of involvement in the politics of the organization, the topics contain a little too much A to B; in other words, subjects that others have been working on, where a trend is established.

However, there could be some B to A hiding in there—for instance, see the topics in Table 1 (my guesses are in orange), which is from an SEG 2017 call for papers, for its annual meeting in Houston next September. One of these could be “the next big thing” that someday would cause management to yell at you, “why did you not see this?” Some examples of once-new ideas include migrating 2D data, shooting 3D seismic in a 2D world, and conducting recon with gravity & magnetics. 

Sneaky governments.Some of you may think that there is only a bit of evidence that governments, most of whom can afford it, are financially in the oil and gas business. But consider this: Government take includes royalties, wellhead taxes, risk contracts, labor participation, community participation, and governmental facilitation payments. None of these takes are included in the abbreviated Table 2 (bolding is mine for emphasis). Every government makes a whole lot more per gallon, or per barrel, than any private oil company (currently about 4 cents/gal).

Some of these countries will put a penny or two back into a national oil company, or support some oil-related research, or repave a road now and again. Most will require you to defend every step that you merely think about, and pay for anything you actually do (pay as you go), even if you will not be allowed to deploy equipment, materials and manpower, and then take you to court for more (money) later. So, if you think that I am a bit cynical, then consider Shell’s recent situation in the Arctic—new technology may not buy you love or access, if government is involved. 

Now, maybe you understand why government has a prominent interest in your program—governments that also own the oil make phenomenal revenue. Aramco brags about being worth more than twice the value of Apple Inc., plus the value of Google. So, what is my point? An obvious place to look for exploration-exploitation funding for your technology is to “ask” your government of interest to scale back its take, or participate in a working interest. Accommodation has been done more than once—believe me! 

About the Authors

William (Bill) Head

Contributing Editor

William (Bill) Head is a technologist with over 40 years of experience in U.S. and international exploration.