Measuring The Impact Of 3D Seismic On Business Performance

Abstract

This paper (SPE 56851) was revised for publication from paper SPE 52970 originally presented at the 1999 SPE Hydrocarbon Economics and Evaluation Symposium held in Dallas, 20–23 March. Original manuscript received 1 February 1999. This paper has not been peer reviewed. Summary Three-dimensional seismic has had a major impact on the performance of Amoco's E&P operations. In the last 4 years, 3D seismic has helped improve reserves replacement, improved exploration finding rates and volumes, and had a positive effect on field-reserves revisions. This paper discusses the performance improvements that 3D seismic has brought to the company and suggests ways to measure the impact of emerging technologies. These measures gauge the benefits as well as the easily measured costs when managing technology investments. Introduction Aylor1 previously reported that Amoco, now a part of the BP-Amoco Group, achieved a major turnaround in exploration performance during 1993-97. Fig. 1 shows that, during this period, the company made major improvements in its production replacement, from 60% in 1992 to 178% in 1997. In addition, cost of finding dropped from U.S. $8/bbl in 1991 to less than U.S. $1/bbl in 1996; new resources found improved from 200 million bbl oil equivalent (BOE) in 1991 to 1 billion BOE in 1996; and exploration drilled success rate jumped from 13% in 1991 to 47% in 1997. Three major factors were instrumental in improvement in exploration performance: portfolio risk management, 3D seismic, and acreage management.1 Three-dimensional seismic has had a major impact on production performance, which is also reflected in field-reserves revision. During 1997, fields that had 3D-seismic coverage exhibited large positive reserve revisions, while those with no or partial 3D seismic exhibited negative revisions. This suggests that, when fields are managed with 3D seismic, there is better overall reservoir management and the synergy with engineering and geological data creates a more economically viable business venture. This finding fits well with previous data collections that showed that 3D seismic could differentiate high-risk from low-risk locations and could find completely new, previously unknown, low-risk locations.2 It also supports previous data that showed that 3D seismic is good at finding high-rate zones in fields that have significant reservoir, geologic, and production-performance heterogeneity.2 These findings suggest a framework for documenting the relative ability of current and future technologies to impact E&P performance favorably. Several examples, including Bayesian updating methods, are used to illustrate this framework. Impact on Exploration Success. Early in 1994, data were collected on as many 3D-seismic surveys as possible to document business performance. Data were collected to show the predrill exploration and development situation both before and after shooting of the 3D-seismic survey. While this information was available only on approximately 20% of the surveys collected, it was considered to be indicative of the company's worldwide experience with the technology and useful as a starting point for establishing more localized 3D-seismic potential. Aylor2 showed that the average exploration situation before shooting the 3D-seismic surveys was 3.4 prospects in the survey area with a 16% predrill probability of success, Ps. Acquisition of the 3D-seismic survey effectively separated those locations into two groups: one with 1.4 prospects with a 6% predrill Ps (which would not be drilled) and one with 2.0 prospects with a 23% predrill Ps. In addition, the surveys found two previously unknown prospects with a 22% predrill Ps. The situation after the 3D-seismic survey, then, was that there were four prospects with a 23% probability of economic success. Fig. 2 2 illustrates the ability of a 3D-seismic survey to separate good exploration prospects from poor ones. This example from an exploration block in the North Sea shows eight prospects with "seal" probability of failure, Pf, generally between 20 and 50% before acquisition of 3D-seismic data. After the 3D-seismic survey, two of the prospects have been convincingly confirmed with a 10% Pf and six have been condemned with a Pf of 80 to 90%. This illustrates a highly effective technology in action that usually (75% of the time in this case) condemns high-risk prospects but that occasionally reliably confirms them. The condemned prospects have saved expensive dry holes. The confirmed ones can be drilled with lower risk of failure. This predrill approach was useful in helping the company see the value of the average 3D-seismic survey but did not directly address exploration performance. Since the initial 3D-seismic performance measurement, Amoco has continued to gauge 3D-seismic impact on exploration drilling results. Fig. 3 shows the dramatic impact of 3D seismic on drilling performance. Since 1994, when the measurements were first made, both the number of exploration wells drilled with 3D seismic and the drilled success rate have improved. Table 1 summarizes the data gathered during this period. Exploitation Impact. Because 3D-seismic surveys had also been acquired over producing properties, a characterization of survey effectiveness similar to that done for exploration 3D-seismic surveys also was carried out.