In November 2007, Australian minerals and mining major, BHP Billiton exercised an option to take a controlling interest in two key licences, offshore the Falkland Islands … 2002 and 2004. Under the terms of the farm-in deal with UK-listed petroleum independent Falklands Oil & Gas (FOGL) BHP will pay approximately 68percent of the costs of the near term work programme on the acreage, including the drilling of two exploration wells.
This is a very important development, not just for FOGL as it tries to woo energy majors into taking an interest in Falkland Islands exploration after a gap of 10years, but for a geophysical technology that is perhaps only now coming of age as a resource-hunting tool. In short, BHP might not have taken the risk it has in the South Atlantic, had there not been the double comfort of FOGL having carried out both conventional seismic and controlled source electromagnetic resonance (CSEM) sweeps over its acreage.
Bear in mind, that the first Falklands exploration drilling campaign comprising five wells drilled by Amerada Hess, Shell and others was both short and disappointing, despite the seismic work carried out in response to by optimistic noises from British Geological Survey regard the richness of source rocks.
While CSEM technology has yet to become a mainstream tool, the widely held view is that it would now he hard to ignore. One of the companies most readily associated with making it happen is OHM, Offshore Hydrocarbon Mapping, a spin-out from Southampton University that is now headquartered in Aberdeen and which, in the early 2000s was vicariously caught up in an intellectual property battle between Statoil and the university regarding ownership of a concept know as SBL (seabed logging). However, in 2004 and following a hearing, the UK Patent Office awarded ownership of a UK patent and a number of foreign applications on SBL to Statoil (now StatoilHydro). This resulted in an IP transfer to Statoil, which in turn transferred it to specialist Norwegian firm emgs (Electromagnetic Geoservices) with which the oil company had been working on the CSEM technique.
To the uninitiated, SBL exploits differences in resistivity beneath the seabed to identify hydrocarbon-bearing reservoirs with greater accuracy. This means that promising structures revealed by seismic surveys can be further investigated to identify whether oil or other hydro-carbons are present or not.
Statoil brought the action as it maintained Southampton had wrongly patented the concept of SBL, and had devised the concept prior to the involvement of the university. This decision hit OHM hard as it lost the benefit of its licence with Southampton, though the company survived that set-back. The company had not long before listed on the London Stock Exchange (AIM board).
It also survived a court action filed by emgs in October 2006. The Norwegian company claimed patent infringement but, in March 2007OHM stated that it had filed evidence seeking to ‘demonstrate that emgs was mistaken in its belief that the UK company’s were infringing patent’. The upshot was that emgs dropped the action, plus it agreed to pay £50000 to cover OHM’s legal costs.
This long-running dispute is an important element of the seabed logging/CSEM saga, but has probably had little impact on progress, especially given the significant attention to the concept accorded, not just by Statoil but ExxonMobil too.
First Statoil, where development of the seabed logging technique started in the late 1990s and resulted in emgs being formed as a spin-out in 2002. The company believes its Linerle prospect on the Norwegian Continental Shelf is probably the first in the world where information gathered from SBL was used to verify the presence of an oil reservoir prior to drilling.
Four SBL lines were acquired by emgs in 2003, one of them being ‘tied’ to the dry well 6608/11-3 l (Blameis) and one to the Norne oilfield. The two remaining lines covered the Linerle prospect.
The upshot of the work was that the first well drilled on the prospect encountered a 20m oil column.
However, the first full-blown trial of Statoil’s SLB technique was carried out over a known oil field offshore Angola and involved the collaboration of, among others, Southampton University (these were pre-dispute days). It was a success. So too was a second trial conducted in 2001; it too involved Southampton.
ExxonMobil’s involvement reaches back to the early 1980s, though the breakthrough did not happen until the R3M (Remote Reservoir Resitivity) project that started in 1998 and continues today. For RM3, read CSEM. It is about the ‘Direct detection of ‘reservoired’ hydrocarbons pre-drill’ by measuring reservoir bulk resistivities.
In a Society of Petroleum Engineers paper delivered at the 2006 Offshore Technology Conference in Houston, an ExxonMobil team described the R3M technique as ‘promising’. They said the results of ExxonMobil’s work “show that marine CSEM provides valuable information on subsurface lithology and fluids independently from seismic data, although the spatial resolution of CSEM is much lower than seismic.
They said too that imaging of CSEM data using 3D inversion, with and without constraints, shows considerable promise as a means to substantiate model-based interpretation. Moreover, imaging by inversion can also recognise ‘subtle resistivity effects in data that may be difficult to interpret manually’. They also suggested that CSEM could have value in 4D techniques for monitoring hydrocarbon flows in a producing reservoir.
What ExxonMobil did not say at OTC 2006 was that it had quietly been making regular use of R3M in Angola where its exploration track record has been extraordinary, with 17 commercial oil finds made by
17 consecutive exploration wells up to the Bavuca-1 find of 2004.
ExxonMobil has so far applied the technique in more than 40 surveys, scoring sector firsts offshore Nigeria, Brazil, Colombia, Canada, and Gulf of Mexico. The super-major has 30-plus patent applications filed (plus multiple foreign equivalents). Not only that, the
super-major has said that marine CSEM methods are arguably the ‘most important geophysical technology for imaging below the seafloor since the emergence of 3D reflection seismology some 25 years ago’.
Clearly, R3M, or CSEM, is a highly promising, effective tool for de-risking deepwater targets prior to drilling. While ExxonMobil remains secretive about which two of the four or so companies currently offering CSEM services it is using, they are OHM and AGO of which more later.
So how does the principle work? CSEM works by measuring the resistivity of geological formations encountered when an electromagnetic pulse is projected through the sea floor. While seawater is conductive, oil is not. The larger the volume of hydrocarbons encourtered, the greater the response.
The essence of the CSEM technique is that receivers are placed on the seafloor of an area to be surveyed; then a vessel systematically quarters that area using a towed electromagnetic source emitting a low frequency signal.
Collected data are interpreted in one, two, or three dimensions using geophysical inversion and imaging techniques in order to provide cross-sections and volumes within subsurface structures.
Another UK independent hoping to make its name offshore the Falklands is Rockhopper Exploration, which has also opted for CSEM plus 2D seismic. But, like FOGL, the company has yet to drill, and that is the acid test. Another important test is whether CSEM with 2D may short-circuit the need for costly 3D seismic surveys.