Brownfields offer opportunities for seismic service sector

OBN technology may be well suited for these applications

Charles Davison
FairfieldNodal

At a recent conference primarily for the offshore oil and gas sector, industry CEOs and other key leaders were present and provided their expert insight into where the industry was headed.

One very clear message delivered by all the majors was that the “E” in E&P is dead - at least for the short- to medium-term, however long that may be. That admission is a clear signal that the industry recognizes that a “new normal” is really here.

That means long-term change, perhaps even radical, structural change, to the industry is underway. For an industry that eschews quick change, market forces are already carving away at staid conventional approaches and attitudes about business. Such changes are potentially huge for the seismic industry; and, where there is change, there is opportunity.

Seismic is a very small share of the enormous economic engine that comprises the global oil and gas industry. Interestingly enough, nearly every decision made in the oil patch, whether on land or offshore, passes through the seismic stage gate. It has a key role in the industry. The right seismic image can be the difference between a $140-million dry hole, or a well that produces a billion dollars in oil profits. The quality of that image is critical in making billion dollar decisions.

And yet, oilfield service companies and vendors will continue to face a challenging market in the near term and perhaps beyond. Expectations are that another flat-to-down-year is possible in 2017 as the industry downturn finally bottoms out. It will be a challenge for service companies of all varieties to weather the storm.Seismic companies are similarly challenged, and for certain types of seismic acquisition methods, and those companies concentrating their services offerings exclusively at the front- end life-of-field, the challenges may be significant.

Image still key

It is recognized that overall production will grow in 2016 and beyond. The brownfield is very much alive, perhaps more than ever, due to the industry’s new normal.

Despite the cuts made to every life-of-field stage, it is clear that companies will focus much more on maximizing the productive capacity of existing brownfields. This will be truer for offshore field developments than onshore due to the significant complexities and associated expense.

The lifting costs and conventional breakeven price per barrel associated with an existing producing field offshore, even those in decline and requiring some form of intervention, are still vastly less expensive than greenfield developments.

The math is simple: brownfield breakeven prices/bbl range in the $30/bbl-$50/bbl spread. For unsanctioned offshore projects, the average breakeven costs are in the $65/bbl-$85/bbl range even after the massive supply chain cost compression experienced over the past two years of this downturn. Expected average market oil price/bbl in the $40-$60 range through 2020 makes it clear: Operators will have to focus on how to best characterize their existing reservoirs, intervene, and exploit oil production from existing fields as its first priority. Furthermore, those decisions still have to flow through the seismic stage gate.

Brownfield seismic methods

Seismic is now ever more critical to maximizing production in thebrownfield.

Offshore brownfield exploitation generally involves operations in remote/difficult-to-access areas; environmentally sensitive areas; geologic basins with complex overburden, structure, and stratigraphy; and most importantly, with field developments characterized by dense infrastructure. Given these realities, conventional towed streamer “surface” acquisition is challenged in its ability to provide similar high-quality, reliable, ocean bottom seismic data acquisition.

OBS, and specifically ocean bottom node (OBN) seismic acquisition is the technology of choice for the brownfield, and there are a number of valid reasons why. The most important reason is found in the type of seismic acquisition required in the brownfield, generally known as 4D.

Critical in the brownfield,4D seismic establishes the required time-lapse characterization of the reservoir. However, most mature brownfield reservoirs, developed using 4D seismic, are surveyed only every two, three, or five years apart. This is obviously a function of cost and priority. In the past, it has been mostly about E-seismic. P-seismic has taken a back seat. But this approach creates an unnecessarily high risk scenario; operators can easily miss the opportunity to effectively manage the reservoir and intervene if needed.

Ultimately, the 4D, P-seismic game is about creating the highest quality imaging required to accurately characterize the reservoir, and then make the critical, best decision about how to intervene (if at all). Intervention to improve and further exploit the productive capacity of the well goes beyond additional profit growth. Successful intervention effectively delays decommissioning costs, which could run as high as $60-$70 million in some cases. P-seismic is an effective cost mitigation strategy as well.

The days of $120/bbl oil and resulting profitability adequate to cover over the significant opportunity costs created by reservoir management mistakes are gone. Effective and affordable reservoir management requires a 4D solution that enables multiple, closely time-separated surveys that measure how the reservoir is responding to production plans and well interventions.

While towed streamer acquisition is currently the lowest-cost alternative in shooting virgin seabed and providing reasonable images for greenfield applications, that is not the case in the brownfield. Towed streamers often conduct 4D seismic in the brownfield through wide azimuth (WAZ) surveys. WAZ requires a huge commitment of time and expense to conduct, and these surveys have significant limitations imaging brownfields.

Reservoir image quality is affected by the towed streamer’s inability to fill the image gaps created by dense brownfield infrastructure and other constraints. Nothing can change that reality. Additionally, towed streamer image quality suffers due to natural water column variability (added 4D noise), random surface obstructions, shipping lane restrictions, etc., that make shooting subsequent surveys exactly as the previous survey - known as repeatability - virtually impossible. They cannot recreate exactly all the environmental conditions present during the prior survey in order to exactly compare the image generated from the current survey to the image generated from the prior survey. The 4D image quality and comparability is inferior.