The Value Adding Role of Geophysics In The Oil Industry

Contributed by the Chief Geophysicists Forum
Published: Daily Oil Bulletin

The role of geophysics in the industry is a robustly debated subject these days. As our industry continues to evolve in order to meet challenges brought on by unconventional resources, changing supply and demand factors, environmental drivers, and legislative and tax regime changes — just to name a few — all aspects of our industry are under scrutiny. Nobody wants to spend money or do anything that cannot be immediately assessed for the value it adds. It is under this scrutiny that geophysicists could perhaps be forgiven for periodic existential anxiety.

Geophysicists are an important part of the group of professionals who work together on the value adding process of looking for and producing hydrocarbon reserves. Understanding and communication of our respective roles and contributions in that process is urgently required.

At its essence, geophysics has developed as the most cost effective method of sampling the subsurface. All of the key geophysical methods allow us to acquire the immense information about the subsurface for a low unit cost. Initial methods were focused on basin wide prospect assessment. Two dimensional seismic was acquired to illuminate large structures along very long regional lines. This proved quite successful, and the theme of cost effectively being able to learn relatively large amounts about the subsurface without direct measurement was proven out. Continued innovation in the geophysical science has held this premise to be true. Every time we advance the science, it allows us to learn more about the subsurface in the most cost effective manner possible. The nature of what we learn has continued to be more specific, accurate, detailed and now encompasses attributes of the subsurface that we never dreamed of previously, but nevertheless it all holds the same essential quality, that it could not have been learned in a more cost effective way.

Geophysicists currently contribute to asset teams and service companies in a wide range of ways. This is mirrored by the many uses that seismic has:

• Traditional 2D and 3D seismic is key for exploration and development workflows. Modern acquisition and processing techniques have enabled high quality illumination of subsurface for conventional and unconventional reservoirs at much lower costs than in the past;
• Prestack workflows, such as AVO and anisotropic velocity analysis are used to predict fluid properties and localized stress and fracture orientation
• Seismic attributes and quantitative geophysics can be used to predict localized stress regimes, fault distribution, and cap rock integrity, and can further be used to highlight statistical relationships with pay and reservoir quality through cross correlation;
• 3 component seismic is used to predict fluid distribution, rock properties and changes in lithology;
• 4D seismic is routinely used to measure the effectiveness of enhanced recovery programs;
• Seismic acquisition can be used to offset rental payments on oil sand leases;
• Microseismic imaging of hydraulic fracturing for improving fracture designs and well completions and optimizing the spacing and sequencing between offset wells;
•  Induced seismicity monitoring for regulatory compliance and mitigation of seismic risk associated with anomalous ground motion.
• In an industry where producing companies are adopting decision tree and value of information analysis in an effort to objectify decision making, cost effective and highly accurate methods for reducing risk are very important. Lee Hunt (Hunt, 2013) highlights the measurable impact that geophysical methods have on reducing risk in an economical way, even in situations where risk is fairly low.

Geophysical data and analysis is good for all the things that companies are trying to achieve these days. It is cost effective, for the amount of data it supplies, it is environmentally friendly, it reduces risk, increases insight into the subsurface, and the insight that it provides has broad application across geology, reservoir engineering, well planning, and completions. So in the face of this, why is geophysics even perceived to be under threat?

The truth is, there is much room for improvement, and the geophysicists may share some of the blame themselves.

The Chief Geophysicist Forum (CGF) is a subcommittee of the CSEG, and meets quarterly. Among its current priorities is an effort to understand and discuss the factors that are contributing to a reduced focus on geophysics in the industry. Its 65+ members comprise a cross section of the industry and include leading geophysicists from large and small producing companies, service providers, consultants and academics.

As it relates to improving the utilization of geophysics and increasing the benefits to oil companies, the group identified two themes: the need to better integrate asset team communication and workflows, and the need for higher levels of business acumen from the geophysicists themselves.

Geophysical data and analysis has broad application across producing and service companies. The utility of the data and analysis is dependent on integrating that data properly in the context of the entire asset team. Integrated communications are needed in order to ensure this happens properly both within our companies and also between all producers/service companies/regulators and universities. Communication between all members of an asset team needs to be constant and consistent, and not depend upon the discipline of the team member. Regular discussions must take place between the geophysicist, geologist, reservoir engineer, drilling operations team, and land person. This is necessary in order to properly utilize geophysically derived data – especially where that data is easily confused because of similar or identical terminology that is borrowed from other disciplines (Fox and Reine, 2014). Although intuitively obvious, the observations of the CGF indicate that this does not happen enough.

Integration is further facilitated by an approach to technology that enables easy sharing of team members’ output. This encourages constant engagement as opposed to a more traditional linear approach to tasks. Asset teams that are highly integrated are able to utilize geophysical data across the lifecycle of the asset. This enables important subsurface understanding at the point of planning wells and surface facilities, integrates geology and engineering data while planning completions (seismic derived pore pressure prediction for example), and allows for real-time well steering. The key point here is not the emphasis on geophysical data but rather the presence of all disciplines’ data and interpretation at all points in the asset lifecycle. Again, while the benefits of this are intuitively obvious, it is also clear that it is not widely adopted.

The requirement for business acumen is higher now because of reduced netbacks across all our industry. It is no longer sufficient simply to be highly technically proficient. All geoscientists need to put their work, analysis, interpretation, requested additional work, and suggestions in terms of the business value it creates for the asset. This is the language that should be used. Companies have adopted the previously mentioned decision tree and value of information (VOI) analysis as a method of establishing this type of protocol within an industry that has been guilty at times of pursuing ‘data for data’s sake.’ This is both important infrastructure, and a strong message to employees, that investment of any form needs to be articulated in terms of return on that investment. The cost of deploying geophysics can often be assessed in terms of projected well outcomes. Geophysics, properly used, maximizes the extraction of  resources and appreciably reduces finding and development costs. Placing horizontal wells too close together can appreciably affect a drilling budget. Placing wells in sub-optimal orientations and positions can severely affect P10, P50 and P90 outcomes, resultant deliverability and ultimately reserves. While geophysics seldom provides a concrete answer, it does mitigate drill risk and heighten the chances of success.

Geophysical technology also needs to evolve and keep current with the latest industry business needs. A prime example is microseismic, which has evolved into a key geophysical tool to optimize unconventional reservoir exploitation. Similarly, recent concerns around induced seismicity and questions about the associated seismic risk have led to imposition of regulatory required seismic monitoring for certain hydraulic fracturing and waste water disposal wells. During economic challenging times, finding cost effective technical solutions requires a thorough understanding of the geophysical technology against a backdrop of the industry’s social license to operate.

The challenges that our industry is facing are indeed difficult. Consensus is growing that we will adapt to these challenges — as we have always done — but look and act differently when all is said and done. A fundamentally different industry isn’t necessarily a bad thing, if it means that we continue to become smarter and more efficient (by all definitions of that word) as a result. As it relates to geophysics, integrated, well communicated, and properly articulated geophysics can be a great enabler in the future — and will clearly increase value.