EXPLORER

2 FEBRUARY 2016 WWW.AAPG.ORG Vol. 37, No. 2 February 2016 EXPLORER PRESIDENT’SCOLUMN What is AAPG ? By BOB SHOUP, AAPG House of Delegates Chair

s I have met with increase opportunities for delegates and AAPG our members to network Aleaders around the with their professional peers. world, there has been Ideally, we can address these considerable discussion two priorities together. about what AAPG is, or Our annual meeting should be. There are many (ACE) and our international who believe that AAPG meetings (ICE) provide high- is, and should remain, an quality scientific content association that stands for and professional networking professionalism and ethics. opportunities. However, This harkens back to we can host more regional one of the key purposes Geosciences Technology of founding AAPG in the Workshops (GTWs) and first place. One hundred Hedberg conferences. These years ago, there were types of smaller conferences many charlatans promoting can also provide excellent drilling opportunities based on anything opportunities it offers asked how they view AAPG, the answer scientific content and professional but science. AAPG was founded, in part, at conferences, field was overwhelmingly that they view networking opportunities. to serve as a community of professional trips and education AAPG as a professional and a scientific Another priority for the Association petroleum geologists, with a key emphasis events. association. leadership should be to leverage Search on professionalism. AAPG faces a When reviewing the comments, and Discovery as a means to bring Many members see AAPG as a number of challenges which are available on AAPG’s website, professionals into AAPG. Search and scientific association. Indeed, AAPG sees as we move into our it becomes apparent that what our Discovery is an incredible resource, and itself largely as a scientific association. Association’s second respondents value about professionalism free to all geoscientists. One of the Association’s strategic goals is century. We can’t does not lie in the area of ethics and We must look for ways to make to be the premier scientific association for afford to be everything SHOUP professional standards, but in the ability to Search and Discovery, along with our petroleum geoscientists. to everybody, which network with like-minded professionals. other online scientific products such as When I joined AAPG several decades means we will need to be selective in the These networking opportunities allow Datapages an invaluable service to our ago, being able to access quality types of services we continue to offer our our members to discuss the science, members. Not only will this be a direct geoscience papers was one of the members. Knowing how the members and to become aware of business benefit to our members, but a service to key values to my membership. AAPG’s view the Association will help the EC opportunities. all geoscientists that can help us grow our technical programs and publications, short prioritize the services we offer. They do not view these networking membership base. courses, Datapages, UDRIL and Search Instead of regaling you with my opinion, opportunities as social functions, although I believe that by focusing on these and Discovery go a long way in meeting I have asked for the opinion of several they often revolve around social settings priorities we will go a long way toward that strategic goal. However, the amount of hundred past, present and future leaders such as receptions and icebreakers. making the AAPG the Association that information available to all on the Internet of the Association – 88 responded. The What does this survey tell us about advances petroleum geoscience. makes it easy for any geoscientist to first question they were asked, was to rate the types of services AAPG should focus What do you think? You have an access quality geoscience papers without what they consider to be principal value of on providing to our members? As I read opportunity to let us know by taking the being a member of AAPG. AAPG membership. the comments provided by those who same survey that the AAPG leadership Still others see AAPG as a social At first glance, it appears that our responded to the survey, it seems that took by visiting www.surveymonkey. organization where they can meet with leaders are nearly equally divided AAPG should primarily focus on two main com/r/LeadershipSurveyJanuaryExplorer. their colleagues. To them, the value that AAPG is a social, scientific and areas: continue to provide high quality We look forward to your comments and

of AAPG is in the social networking professional association. However, when scientific content to our members and to opinions. EXPLORER

STAFF TABLEofCONTENTS REGULARDEPARTMENTS Managing Editor AAPG’s Publications Pipeline Unconventional resources ProTracks ...... 30 Brian Ervin 04 program passed a new milestone 18 propelled the United States into email: [email protected] recently in its mission to get position as the world’s top fuel Industry Highlights ...... 31 Communications Project Specialist geoscience materials to students exporter. Now Saudi Arabia wants In Memory ...... 31 Susie Moore who need them. in on the action. email: [email protected] Shell’s surprising departure last year “Oil fingerprinting,” as it’s called, Historical Highlights ...... 32 Art Direction/Production signaled the end of Arctic oil is indispensable when there is Matt Randolph 08 24 Policy Watch ...... 34 email: [email protected] exploration. Or did it? AAPG commingled production from member David Houseknecht and different formations. Geophysical Corner ...... 36 Graphics Support others explain. Ben McNett Every major producer in the Middle Foundation Update ...... 38 Kyle Walker In an already glutted global market, 26 East will be represented at AAPG’s Advertising Coordinator 14 oil producers are bracing for still upcoming GEO 2016 conference in Professional News Briefs ...... 39 Steve Praytor more production out of the Middle Bahrain next month. email: [email protected] East. But how much more? Classified Ads ...... 40 P.O. Box 979, Tulsa, Okla. 74101 Phone: (918) 560-2647 – fax: (918) 560-2636 Director’s Corner ...... 42 (U.S. and Canada only: 1-800-288-7636) (Note: The above number is for advertising purposes only.) Divisions Report (EMD) ...... 42 CORRESPONDENTS ON THE COVER: David Brown Emily Smith Llinás The Sarawat Mountains as seen from Louise S. Durham Ken Milam the city of Ta’if in the Mecca Province of Kristi Eaton Heather Saucier Saudi Arabia. The Sarawat range is the largest mountain range on the Arabian Peninsula and stretches from the Jordan border to Yemen. Photo by Futuristical Tee. The AAPG EXPLORER (ISSN 0195-2986) is published monthly for members by the American Association of Petroleum Geologists, 1444 S. Boulder Ave., P.O. Box 979, Tulsa, Okla. 74101-3604, Left: Geologists measure a section (918) 584-2555. e-mail address: [email protected]. Periodicals Postage Paid at Tulsa, OK and at additional mailing offices. POSTMASTER: Please send address changes to AAPG EXPLORER, P.O. Box 979, Tulsa, Okla. 74101. Canada Publication Agreement Number 40063731 Return undeliverable Canadian address to: Station A, P.O. Box 54 • Windsor, ON N9A 6J5 • E-mail: [email protected] through the Triassic Shublik Formation along the Sadlerochit River near the eastern Advertising rates: Contact Steve Praytor, AAPG headquarters. Subscriptions: Contact Veta McCoy, AAPG headquarters. Unsolicited manuscripts, photographs and videos must be accompanied by a stamped, self-addressed envelope to ensure return. The American Association of Petroleum Geologists (AAPG) does not endorse or recommend any products or services end of Sadlerochit Mountains, northeast that may be cited, used or discussed in AAPG publications or in presentations at events associated with AAPG. Copyright 2016 by the American Association of Petroleum Geologists. All Brooks Range. See story on page 8. Photo rights reserved. Note to members: $6 of annual dues pays for one year’s subscription to the EXPLORER. Airmail service for members: $55. Subscription rates for non-members: $75 for 12 Vol. 37, No.issues; 2 add $72 for airmail service. by Dave Houseknecht.

WWW.AAPG.ORG FEBRUARY 2016 3 EXPLORER Publications Pipeline Program Reaches Major Milestone By KEN MILAM, EXPLORER Correspondent

APG’s Publications Pipeline program celebrating 161 tons of donated publications. does more than funnel books and Since its inception, the pipeline Apublications to understocked and has delivered publications to about 60 underserved universities and libraries. universities in at least 15 countries on every It pumps a lot of good will along the way, continent except Antarctica, Blickwede said. explained Jon Blickwede, AAPG member, senior advising geologist for Statoil and Myanmar Milestone former chair of the AAPG Publications AAPG Deputy Executive Director David Lange (left), Martin Cassidy (middle) and Art Pipeline Committee. In another milestone, the PP made Browning (right) with the Cambodian Institute of Technology Certificate of Appreciation at The committee was launched in 2000 its largest single shipment last year to the recent gathering in Houston. Photo by Brian E. Wall. with the aim of distributing geoscience universities in Myanmar. and engineering books and publications The AAPG Asia Pacific team was able to to universities around the world that lacked secure sponsorship for the logistics required those resources. with the generous support of Chevron, Blickwede said committee founders Statoil and Schlumberger, according to Mark Cassidy and Rick Wall of Amoco Peter Grant, president of AAPG’s Asia began the project, knowing companies, Pacific Region. individuals and institutions had a number of Grant said the initiative began at publications they needed to clear out, but the first AAPG conference in Yangon in didn’t want to simply throw away. August 2014, and the books were formally Most of the material consists of donations presented during the second AAPG/EAGE/ from retired and deceased geoscientists MGS Myanmar Oil and Gas Conference on and downsized company libraries, he said. Nov. 18, 2015, Grant said. The works are gathered in Houston, the Some 33,000 kilos of books on 60 pallets committee’s base of operations, then sorted, had been delivered to Yangon University cataloged and parked. Once a need is prior to the official presentation, and were identified, arrangements are made to ship to be distributed to the various participating them, often via companies with interests in universities in the system. Students in Myanmar celebrate a massive delivery from the AAPG Publications Pipeline program. those countries. Blickwede, who championed the Photo by Peter Grant. The effort began slowly, but has grown shipment for the PP, said the collection steadily over the years. Blickwede said would fill a shelf more than a kilometer books,” Grant said. of high quality.” the PP took 13 years to pass the 100-ton long and was by far the group’s single- “The volume of books was very The significant task ahead is for the milestone. But in only two years since, the largest delivery. impressive and were a combination of university to catalogue the books and then program already is fast approaching 200 “It was very pleasing to see many old and new textbooks from around the make them available for students and the tons. Late last year, the Publications Pipeline students attend and to see how they had world, field and case studies, memoirs Committee held a gathering in Houston so much interest in the event and the and journals,” he said. “All seemed to be See Large Shipment, page 6

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Democratic Republic of the Congo, great upper body workout.” Large Shipment Blickwede said. The group has about 12 core Know your from page 4 He said the shipment probably would workers. Blickwede said some newer fill 20 pallets and be the group’s second- volunteers bring a lot of enthusiasm and other participating universities. We wish largest delivery to date. energy to the program. Benefits, them well in this huge project,” Grant added. “Elizabeth spent time in the Peace “While many of us take for granted Blickwede called the PP efforts a Corps in east Africa and has been online access and digital media, those “definite win-win,” providing needed working through those contacts to means are not easily accessible in many Save on Dues resources for students and “a good contact universities there,” he said. countries,” Blickwede added. “They By VICKI BEIGHLE, public relations effect for AAPG and the While, like many countries, the still treasure old-fashioned books and AAPG Member Services Manager companies that arrange to pay for the Democratic Republic of the Congo “is journals.” shipments. Often they have operations not the easiest, security-wise,” Desser And, he explained, the Publications ur industry is once again in the receiving countries and the found a shipper agreeable to making the Pipeline program itself will continue to experiencing a downturn; and deliveries can fill some community support deliveries, Blickwede said. be treasured for years to come. OAAPG is aware that many of our obligations they may have.” The PP’s core work group meets for “It’s a way to pay it forward to a new members have been negatively impacted a monthly work session in Houston, generation of geoscientists,” Blickwede by low oil prices. Now more than ever Africa mapping plans and doing the physical said. “AAPG fosters new up-and- it is important to maintain networking work of inventorying, packing, loading coming petroleum geologists around connections by maintaining your Another large shipment is and labeling donated publications. the world and helps establish itself membership, and AAPG’s graduated championed by committee volunteer Both Blickwede and Desser said the as an international entity, growing the dues structure may help you stay

Elizabeth Desser to Lubumbashi, sessions are fun and, Desser noted, “a profession and the membership.” EXPLORER connected. Qualifying members can save up to 75 percent on basic-full member dues. If your annual personal gross income is between $25,000 and $50,000, you qualify for 50-percent savings ($52.50 annual dues). If your annual PGI is less than $25,000, you qualify for 75-percent savings ($26.25 annual dues). Delinquent members who need to renew dues for the current 2015-16 fiscal year can make the change online as they remit payment. Current paid members who qualify can utilize the same opportunity (change online) when we begin our annual billing for fiscal year 2016-17. Unlike other organizations that tie annual dues to World Bank categories, AAPG dues are based on the individual member’s ability to pay. Our purpose in creating this dues program was to ensure no geoscientist would be denied participation because of a financial situation. With the graduated dues program, those who are currently unemployed and/or seeking employment have the opportunity to maintain their membership with a maximum discount up to 75 percent. As a cost savings measure to the organization, publication options reflect the level of dues paid; however, all paid members continuously receive access to the EXPLORER and BULLETIN, and more importantly, all other member benefits (networking, our online career center, member discounts, etc.) While members must qualify for the reduced dues, no proof is required of any member’s PGI; this system is honor- based and defined by our standards of professional conduct. Members must qualify and request lower dues annually; verification of income level is required by electronic signature for online payments, and/or by initialing special dues billing form. Additionally, AAPG offers Emeritus membership, which not only saves (voting) Members 50 percent on annual dues (including certification dues), they also receive 50-percent savings on AAPG’s annual ACE and ICE meeting registrations for both themselves and their spouse/guest’s registration. Members must be 65 years of age, and have a minimum of 30 years cumulative membership. In accordance with our bylaws, qualifying members must request this classification change. Please contact us to verify your eligibility and take advantage of this premium Member benefit. Our staff is available to assist with any questions you may have; please contact our Member Care representatives at

(800) 364-2274 or (918) 584-2555. EXPLORER 6 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 7 Below: View to the west in Ignek Valley, with Shublik Mountains on the left and Sadlerochit Mountains on the right. Exposure in foreground along Hue Creek includes Cretaceous strata of the dark gray pebble EXPLORER shale unit and the multicolored Hue Shale, both of which are source rocks beneath the North Slope.

Photos by Dave Houseknecht, USGS Where Did Shell Go Wrong in the Arctic? By HEATHER SAUCIER, EXPLORER Correspondent

ith Shell abandoning its exploration While it is common to drill near known plans in the Chukchi Sea in “If you just read the pop literature accumulations of gas, the complex geologic WSeptember and Statoil following suit history of the North Slope and offshore in November, many might believe that the about Shell and Statoil pulling out, you Alaska can turn that strategy into a bust. North Slope Basin off the northern coast of On a map, Houseknecht pointed to Alaska has been condemned. might think the offshore Arctic has been the world-renowned Alpine field, which Yet those who have put decades into condemned. But in my mind, nothing was discovered in 1994 in the Colville studying the geology of Alaska’s North River Delta. Slope and Outer Continental Shelf believe could be further from the truth.” “It remains the largest onshore the opposite. HOUSEKNECHT accumulation discovered in the last 30 The Bureau of Ocean Energy years in the United States, and it is almost Management estimates that in terms of government’s stringent drilling requirements A Well-Placed Well certain to produce more than 1 billion undiscovered, technically recoverable – the mandate for a second rig to be on site barrels of oil during its lifetime,” he said. conventional resources, the Chukchi Sea for a relief well – being the most costly. In the eyes of Myers, Shell drilled in a Yet, to the west, within just 30 miles of the contains a mean of 15.4 billion barrels of While no one can speak for Shell location that met the geological checklist Alpine field, is the Hunter well – drilled by oil and a mean of 76.8 trillion cubic feet besides Shell, Houseknecht, who has for oil. The Burger structure boasts a good ConocoPhillips in the early 2000s – which (Tcf) of gas. studied Alaska’s faults and folds for source rock, an oil and gas charge and a surprisingly produced only gas. And, finding those resources may decades, can speak for the lay of the land solid reservoir rock with a seal and a large “Everyone knew from seismic and other very well boil down to understanding a – at least his interpretation of it. He believes gas cap estimated at a mean of 14 Tfc data that the same geology of the Alpine geological phenomenon that might have that, had Shell aligned its exploration plans in a 2004 U.S. Bureau of Ocean Energy Field extends westward into NPRA (National offset past exploration programs in the with a certain geological hypothesis, which Management’s Minerals Management Petroleum Reserve, Alaska). But over an region. purports that a tremendous amount of Service report. astoundingly short distance, mostly gas was “The story in the Chukchi is highly gas from the foothills of the Brooks Range “I believe Shell’s goal was to move found,” Houseknecht said. compelling, but it’s hard to get anyone displaced oil accumulations in the Burger downdip of the gas cap to see if there was Following the map westward, to talk about it,” explained David structure, it might have struck oil by drilling an oil leg,” Myers said. “But based on their Houseknecht pointed to a cluster of gas Houseknecht, AAPG member and senior farther west. statements, they didn’t.” wells in NPRA at the Walakpa Gas Field, research geologist, and project chief for which was discovered by the federal the Energy Resources Program in Alaska government in 1980. An adjacent well, for the U.S. Geological Survey (USGS). the Intrepid, was drilled downdip from “If you just read the pop literature the gas field by ConocoPhillips in 2007 – about Shell and Statoil pulling out, you presumably to test for presence of an oil might think the offshore Arctic has been leg, Houseknecht said. While the geology in condemned,” he said. “But in my mind, NPRA more than hinted that an oil leg might nothing could be further from the truth.” be present, the Intrepid found no oil and was abandoned. Why Shell Left A study of gas geochemistry published by the USGS in 2003 found that the There are many theories about why Shell Walakpa gas field contains the most scrapped its plans for exploration in the thermally mature gas on the North Slope Chukchi Sea after its Burger J well, drilled based on carbon isotope data, suggesting roughly 80 miles offshore the western end of that the gas migrated from deeper and Alaska’s North Slope, didn’t deliver. hotter parts of the basin. Marvin Odum, director of Shell Upstream “My interpretation is that most of northern Americas, gave only the barest explanation NPRA and the area west of it, which in a press statement last year: “Shell will includes the offshore Burger structure, have now cease further exploration activity in been affected by a large amount of gas that offshore Alaska for the foreseeable future. flooded this region and displaced the oil that This decision reflects both the Burger had accumulated there,” Houseknecht said. J well result, the high costs associated Specifically, an abundance of gas with the project, and the challenging produced during the Cretaceous Period and unpredictable federal regulatory by deep burial beneath the foothills of the environment in offshore Alaska.” Brooks Range simply flushed northward According to AAPG member Mark Myers, and displaced oil “that we know had been commissioner of Alaska’s Department of reservoired in a number of structures in Natural Resources (DNR), Shell’s Burger J NPRA and is no longer present,” he said. well – located in the 25-mile diameter Burger Oil seeps near the northern coast structure – was located in a tremendous of NPRA lend strong evidence to this geological prospect, but it appears it was not hypothesis. associated with an oil leg. Shell explained that its findings were “not Where Did the Oil Go? Geologist examines steeply dipping, overturned contact between Jurassic Kingak Shale (left) sufficient to warrant further exploration,” as and Lower Cretaceous Kemik Sandstone, which is overlain at right by Lower Cretaceous pebble reported in The New York Times. Taking one of the golden rules of geology shale unit. This outcrop, along Hue Creek at the northern front of the Shublik Mountains, Some Alaska geologists say Shell ran – to drill where large gas accumulations are northeast Brooks Range, preserves the same stratigraphic relationship that extends across out of patience. Others say the current known to exist – Houseknecht is replacing much of the North Slope and Chukchi Shelf. Light colored rocks at upper left are Proterozoic price of oil could not sustain its exploration Katakturuk Dolomite, thrust northward over the Kingak Shale. program. Others point toward the federal See Go West, page 10 8 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 9 EXPLORER Slope tilted and as a result, some oil Go West accumulations spilled toward the west,” from page 8 explained AAPG member Richard Garrard, former exploration manager for Conoco- Phillips and exploration director for NordAq it with a phrase from Manifest Destiny: “Go Energy, an Alaskan oil and gas company. west, young man.” “A sweep in the basin will move oil to the While the Burger structure looks as periphery of a basin,” he said. “And, there promising as areas in NPRA, its oil likely has are some very large structural, stratigraphic been flushed from the structure. In contrast, and combination trapping opportunities on structures farther west – on the west side of that basin’s margins.” the Hanna Trough rift basin – likely did not “Based on the results of Shell’s experience the same gas flush. Cretaceous exploratory drilling, one concept to look and Cenozoic strata there are thinner, so it is at for future oil accumulations would be unlikely source rocks were buried as deep – using the displaced oil migration theory and or heated as hot – as those onshore. In other looking for traps along a potential migration words, had Shell drilled west of the Burger fairway that is regionally updip of the Burger structure, it might have had better luck. well location,” added Steve Wright, an Geologists who have spent their AAPG member and a consulting geologist careers in Alaska agree that Houseknecht’s with Alaska Geosciences Unlimited. Lower Cretaceous, syntectonic breccia of the informally named Confusion Creek conglomerate hypothesis is viable. “The Hanna Shoal is closer to a source near the Brooks Range front, south-central North Slope. View to the north. “During the Tertiary Period, the North of sands that provide a better opportunity for reservoir development,” said April Parsons, AAPG member, former geologist for Statoil and senior exploration geologist with Cobalt International. “You’ve got to go west to avoid displacement from the tilting as well as erosion of the reservoirs,” she said. “However, based on 3-D seismic data I’ve seen from acreage held by Statoil and Shell, there are pretty good chances of hydrocarbons being discovered, and the west is not the only place with potential. “The challenge is, there has clearly been multiple episodes of movement with tilting in different directions over time making it much more complex tectonically than the North Slope,” Parsons added. Unable to discuss proprietary information, Parsons – echoing the words of virtually every Alaskan explorer – said that more exploration must be done to unlock the door to the elusive Chukchi Sea. “We all know the full puzzle is under there,” said AAPG member Bob Swenson, retired deputy commissioner of the Alaska DNR and former state geologist for the Alaska Division of Geological and Geophysical Surveys. “Nature put the pieces together. We need to find where she did it.”

Well of Knowledge

Since the withdrawal of Shell and Statoil from the Chukchi Sea, negative vibes have been rippling through the industry and chipping away confidence in its potential. “My company is in the process of raising capital for exploration programs and these things reverberate around the financial communities,” Garrard said. “This is not the end of Alaska by any means.” “None of us want to see Alaska offshore condemned based on the results of a few wells,” added Wright, referring to the Burger J well and the disastrous Mukluk well drilled by BP in the Beaufort Sea in 1982 – known for being one of the costliest dry holes in history. But the bottom line is that for every well drilled, the industry gains more knowledge, which locks in a new piece to the Chukchi puzzle. “We learn by drilling,” Myers said. “You have to test, and there is not sufficient testing in that basin yet.” Compared to the Lower 48, the North Slope Basin is highly underexplored – even more so offshore. If one were able to move the Chukchi Sea or offshore NPRA to the Lower 48, “there would be so many exploration wells it would be astounding,” Swenson said, explaining that drilling costs and access to infrastructure are substantially lower in the contiguous United States.

See Alaska Opportunities, page 12 10 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 11 EXPLORER The U.S. Geological Survey has a Alaska Opportunities paper authored by William Craddock from page 10 and David Houseknecht titled, “Cretaceous-Cenozoic Burial and Exhumation History of the Chukchi Shelf, So, in the game of exploration in Offshore Arctic Alaska,” published in the Alaska, no well is really drilled in the January 2016 AAPG BULLETIN. wrong place, in Swenson’s eyes, because each provides additional clues to what lies in the subsurface. “With the combination of more 3-D “It’s unfortunate that Shell did not seismic data, advancing production encounter what it hoped to find, but technology, and more aggressive that is an inevitable outcome during an explorers who are willing to take risks, we exploration program,” he said. “But if are seeing signs of new resources on the nobody took those kinds of chances, we North Slope,” Myers said. “There is more wouldn’t be where we are today.” life in state lands than people believed “There is potential there. It’s a five or 10 years ago.” supercharged system. This is wildcat While offshore exploration is currently exploration in a geologically complex off the table, it has not dropped below basin. Keep moving. Keep drilling.” the horizon, said AAPG member Sandy Has the industry forgotten what it took Phillips, a former senior geoscience to discover Prudhoe Bay? adviser with BP Alaska who considers “Look at the size of Prudhoe Bay,” herself “terminally optimistic” about Swenson said of its 25 billion barrels of oil. opportunities in Alaska. “How could you not drill into it?” Agreeing that the North Slope Yet, it took nine exploration wells – Basin is highly complicated and highly each roughly 8 inches in diameter – to find underexplored, Phillips said those are the North America’s largest oil field. very reasons exploration should continue – albeit at a higher price point. A Sea of Obstacles “In no way, shape or form is the industry in a place to condemn an oil play Yet, at a time when the price of oil is in offshore Alaska,” she said. “There is sinking lower and federal restrictions and simply not enough data for that.” mandates on Arctic drilling are growing Although Shell abandoned its Burger tighter, most say it’s nearly impossible for J well, it is fighting to extend the duration Upper Cretaceous (foreground and mid-background) and Cenozoic (background) strata along that young man to move west in search of its leases in the Chukchi and Beaufort the Sagavanirktok River, 65 miles south of Prudhoe Bay. Oil seeps from Cenozoic sandstone of oil. seas. After the federal government near the top of this exposure helped guide the earliest exploration efforts in northern Alaska, “When oil was in the $100 a barrel denied Shell’s request last October, Shell contributing to the Prudhoe Bay discovery. range, it was a challenge to explore in the appealed to the Department of the Interior Arctic economically,” Parsons said. “In on Dec. 11. today’s prices, it is impossible.” infrastructure to carry the hydrocarbons to to 15 years, Wright surmised. “They may be stopping activities for In today’s economic environment, the Trans-Alaska Pipeline System. A huge Until oil prices rebound, some operators now,” Phillips said, “But they would not be an enormous accumulation would be investment would be needed up front, and are looking at onshore opportunities on the trying to extend their leases if there were

required to develop a field and build the wait time for production would be six North Slope. no reason to revisit them.” EXPLORER

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WWW.AAPG.ORG FEBRUARY 2016 13 MIDDLE EAST EXPLORER REVIEW How Much Will Middle East Production Rise? By DAVID BROWN, EXPLORER Correspondent

or the oil industry, the most in the region are unlikely to boost worrisome news coming out of production by much. Fthe Middle East doesn’t involve “The Kuwaitis have a lot of trouble geopolitics. organizing their oil industry. Qatar is It’s well known by now that Iran probably on decline for oil production,” wants to increase production by at least Tossetti said. 500,000 barrels of oil per day (b/d) as the “The only country other than Iran and lifting of international sanctions allows it Iraq on track for raising production is the to resume crude exports. UAE, but it’s going very, very slowly,” he But Iran isn’t alone. added. Kuwait reportedly intends to increase Iraq is a special case, where recent its exploration efforts and is targeting increases in production could be stymied a new offshore oil exploration program by low oil prices. within two years. The manager of “Their production over the past couple planning for Kuwait Oil Co. has been of years has risen somewhere between quoted as saying the country eventually 600,000 to 800,000 barrels a day. That’s wants to add a total of 700,000 b/d of oil including Kurdistan,” Tossetti noted. production. But reduced capital expenditures by The United Arab Emirates (UAE) also international oil companies operating has plans to add another 500,000 b/d in Iraq and the likelihood of further of oil equivalent to its production within investment reductions make additional two to three years, according to Abdullah big gains unlikely, he said. Nasser al-Suwaidi of the national oil On the higher side of estimates, company Abu Dhabi National Oil AAPG’s Middle East Region. Goldman Sachs began 2016 expecting Company (ADNOC). Middle East oil production to grow more Given the chances for increased substantially, with Iran, Iraq, Kuwait, production in the Middle East, it’s rebalance crude oil supply and demand: agree on the supply-side calculations. Saudi Arabia and the UAE together surprising to some that analysts have u Market forces will reduce supply Increased oil production from the Middle projected to add almost 1.33 million b/d such a benign outlook for the future of the from some areas as oil production East appears to be a certainty. How in crude output. crude oil market. becomes uneconomic at today’s low much of an increase is the question. That increase would be partly offset That’s partly because Iran’s oil minister crude prices. “The wild card, of course, is Iran. by production declines in other OPEC has announced the country is “not u Production will continue to drop Fairly soon we’ll start seeing how much countries, especially Nigeria. However, seeking to distort the market” and will from fields already in decline, with heavy they’re going to increase and for just as a result, Goldman Sachs predicted use caution in increasing exports. investment in enhanced recovery unlikely. how long,” said Paul Tossetti, crude oil an overall OPEC crude oil production u World demand growth for crude oil markets director for IHS in Dallas. increase of about 812,000 b/d from 2015 Balance Restored? consumption will continue to increase IHS projects a modest overall increase to 2017. over the next two years. in Middle East crude output over the Mainly, though, forecasters are looking Numbers in projections are slippery next two years, possibly by 600,000 to at three expectations that will help by nature, but analysts generally 800,000 b/d. Tossetti said other countries See Oil Production Forecast, page 16

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WWW.AAPG.ORG FEBRUARY 2016 15 EXPLORER Oil Production Forecast from page 14 Demand Growth

And worldwide oil production growth will be even less, it forecast, as crude supply begins to decline from North America and non-OPEC Asia. While Goldman Sachs has been negative on the oil price outlook, and proven correct, it has remained fairly positive on world oil demand growth. Goldman estimates total oil demand to grow to 97.13 million b/d in 2017, a jump of 2.6 million b/d from 2015. Because demand growth is expected to outstrip supply increases, analysts are Left: The National Iranian Oil Co. caption for this image is “Manifestation of self-assurance in Iranian oil industry.” The rest of the oil-producing looking for a tightening world supply- world is presently bracing itself for a flood of Iranian oil following the lifting of sanctions. Photo by Eshagh Rahdari. Right: Kuwait is also expected demand picture to begin as early as the to ramp up production efforts following its new offshore exploration program. Photo courtesy of the Kuwait Oil Company. second half of 2016. Future demand is key because there’s already been “substantial growth,” Tossetti said. So, you’ve already got that in your back pocket. That will be pivotal.” A major factor determining crude production growth in the Middle East will be Iran’s ability and willingness to increase oil exports. Mohsen Qamsari, director general for international affairs of the National Iranian Oil Company, said the country would adjust output “according to the global market’s demand.” “We will exercise great caution to prevent a further decline in international prices and will adopt certain methods and strategies to this end,” he added. Political tensions between Iran and Saudi Arabia earlier in the year caused a very brief flutter upward in oil prices. But the more lasting effect is likely to be negative, according to the Macro Oils service of international consultancy Wood Mackenzie. “Unless other producers such as Russia, Iran and Iraq agree to reduce their oil production, Saudi Arabia has consistently stated since the November 2014 OPEC meeting, it has no intention of cutting its supply to support oil prices. “The current ramping up in tensions between Saudi Arabia and Iran only further confirms our view that Saudi Arabia is unlikely to cut its output to help Iran regain market share,” it said in a report. Wood Mackenzie has forecast continued global oil oversupply in the first half of 2016, followed by a drawdown in crude stocks in the second half of the year. At that time, “with this tightening in the supply and demand balance, political risk will become more important to oil prices,” it said. Today’s low oil price environment constrains investment to boost or simply maintain production from the Middle East oil fields currently in decline, analysts note. That has affected Qatar, where one- time plans to push oil production from the prolific Al-Shaheen field above 500,000 b/d appear to have been derailed. A potential change of operators could affect Al-Shaheen in the near future. Maersk Oil began developing the field in 1992, under a 25-year exploration and production sharing agreement that expires in 2017. Qatar Petroleum has invited other international oil companies to compete to operate and develop Al-Shaheen, seen as a sign that negotiations to extend the current contract failed. The field, about 50 miles off Qatar’s coast, now produces around 300,000 b/d, according to

Maersk. EXPLORER 16 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 17 MIDDLE EAST EXPLORER REVIEW Saudi Arabia Looks to Unconventionals By LOUISE S. DURHAM, EXPLORER Correspondent

wing to the U.S. shale The Jurassic- boom, interest and activity in age Arab Ounconventional E&P has spread formation is a internationally. major oil reservoir Perhaps the most unexpected locale in the Middle for these types of plays is the Kingdom of East, and the Saudi Arabia. reservoir rock at Given the enormous volumes of Ghawar is the conventional production emanating from Jurassic Arab-D this hydrocarbon-rich region, it likely limestone having

surprises many that unconventionals exceptional Lawrence, Hughes et al. (2006), Unconventional WAE P. would hold any allure. porosity. The During the second EAGE/SPE/AAPG Arab-D here shale gas workshop in Dubai in 2014, a includes the presentation attributed to four authors lowermost zone of affiliated with Saudi Aramco reported the Arab and the that an accelerated unconventional uppermost zone exploration program had been of the Jubaila launched in Saudi Arabia to develop formation. Jurassic Strata is the source of 70 percent of Saudi Arabian oil. unconventional hydrocarbon resources in Some find it Jurassic unconventional carbonate source various basins. intriguing that rocks, Saudi Arabia. The outline of the shelf The unconventional gas plays the now-famous Robert Lindsay is senior author of the presentation, to basin transition for the Tuwaiq Mountain “Jurassic Unconventional Carbonate Source Rocks, and Hanifa formations. The position of evaluated were noted to run the gamut Cretaceous-age Saudi Arabia,” which will be presented at the 12th Middle from rich to dry and are located in both Eagle Ford shale East Geosciences Conference and Exhibition (GEO 2016) the Jafurah Basin is in the center of these the Rub Al-Khali and the Jafurah basins, in South Texas is in the Kingdom of Bahrain, March 7-10. basinal settings. among others. The targeted calcareous a close analog Jurassic sediments are deemed to be to the Jurassic within the Jurassic Tuwaiq Mountain, Deposition was in an outer ramp to some of the richest hydrocarbon source shale system in Hanifa and basal Jubaila formations, basin depositions environment, beneath rocks in the world. Saudi Arabia. according to AAPG member Robert fair-weather wave base and within storm Jafurah is east of Ghawar, which is the For instance, Lindsay, geological technical services at wave base. renowned supergiant oil field discovered the Jafurah and LINDSAY Saudi Aramco (retired), and his former He noted that a pycnocline, or the in 1948. Accounting for more than half of South Texas colleagues. He has spoken on the topic area where the density changes rapidly Saudi Arabia’s cumulative oil production, basins where the shales were deposited at various meetings, including AAPG with depth, divided the water column the field also kicks out impressive are both locally deprived of siliciclastic ACE 2015 in Denver. into: volumes of gas. content and contain kerogen-rich, The Jurassic source rocks contain It has long been recognized as the carbonate mudstone facies. 1-14 percent TOC, plentiful organopores u Anoxic water beneath. world’s largest conventional oil field, Jurassic carbonate reservoirs and clay content quantity ranging from u Dysoxic water at the contact. stretching 174 miles in length and 16 miles received vast amounts of oil from very low to none, according to Lindsay across to encompass 1.3 million acres. Jurassic carbonate source rocks and his colleagues. See Source Rocks, page 20

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WWW.AAPG.ORG FEBRUARY 2016 19 MIDDLE EAST EXPLORER REVIEW Industry, Academia Improve Ties in the Middle East By KRISTI EATON, EXPLORER Correspondent

ollaborative relationships to the Middle East that make between the petroleum collaboration between industry Cindustry and academia and academia more difficult; it’s have been steadily improving in simply getting people from both the Middle East over the years, sides interested and invested. but there is still much room for According to conference improvement, according to a organizers, strong collaboration moderator at a panel examining between E&P and educational the issue at the upcoming GEO institutions is affected by three 2016 conference. ABDUL-BAQI factors: data access, innovation The conference, which is space and implementation. scheduled for March 7-10, will showcase Without strong collaboration between oil and gas exploration technology and industry and schools, accessing critical services in the Middle East. data to develop policies and procedures One of the panels will examine the is difficult. relationship between the petroleum industry and academia. Models of Collaboration Historically, there has been no relationship between universities in Panelists at the session will include the Middle East and the oil and gas industry and academic representatives companies that operate there, according from the French Institute of Petroleum, to one of the moderators at the panel, Abu Dhabi Petroleum Institute, King Fahd AAPG Honorary member and chair of University of Petroleum and Minerals and the Arabian Geophysical and Surveying others. Company (ARGAS), Mahmoud M. Abdul- Abdul-Baqi said the French Institute Baqi. of Petroleum is an example of a positive But, he said, newer universities in collaboration. The school offers master’s recent years have worked to change level and doctoral programs with more that by creating and developing than 13,000 alumni in more than 100 collaborations with industry. countries. “It hasn’t been a very strong There are 40 permanent professors relationship, but at least there has been and 350 instructors from the industry. one,” he said, adding that he would like More than 50 companies support to see the relationships strengthen and the school through scholarships, improve. apprenticeships and study leave for professionals. Mutual Benefit Another recent effort underway to bridge the gap between the geoscience There are several benefits to such education field and professional field is relationships, Abdul-Baqi noted. New the NERC Centre for Doctoral Training university graduates have potential job at Heriot-Watt University in the United leads, schools may be able to receive Kingdom. donated items from companies, and Several companies, including BG, BP, training and visiting lecture series can Shell and ConocoPhillips, are supporting help spur innovation. a 20-week training academy. “We are hoping that the improvements It began in October 2014 and focuses keep happening, accelerating the pace on four areas: environmental impact further and faster,” said Abdul-Baqi, who and regulation; extending the life of has been active in professional societies mature basins; exploration in challenging and traveling around the region in environments; and unconventional oil and addition to his years at ARGAS. gas resources. The first set of doctoral

He said he doesn’t believe there are students is set to graduate in 2018. EXPLORER any unique obstacles or issues specific

Source Rocks source rocks study: from page 18 u A new play in Jurassic carbonate source rocks (in Jafurah). u Oxygenated water above. u Source rocks filled Arab-D supergiant oil fields (such as Ghawar, He provided an outline of the Jafurah Shaybah, Abqaiq, among others). Basin unconventional lithofacies types u Gas play is the size of Eagle Ford occurring in order from shallow to deep: play in North America. u Depositional model has been u Evaporite strata – hypersaline. created connecting conventional and u Bioturbated shallow marine strata unconventional plays. – oxic. u Key lithofacies have been u Bioturbated deep marine strata – identified and tied to the depositional oxic. environment. u Horizontally bioturbated deep u Storms swept the ramp margin/ marine strata – dysoxic. basin and delivered TOC concentrated u Laminated with starved ripples – in fecal pellets into the basin. anoxic. u Porosity and permeability are u Laminated without apparent elevated compared to the Eagle Ford. ripples – anoxic. u Massive appearing very thin to If you’re hoping to be privy to the thin- bedded strata – anoxic. end results about this new play in the Jafurah Basin, patience is key. Additionally, Lindsay summarized the “It’s still in appraisal mode,” Lindsay

conclusions reached by the Jurassic said. EXPLORER

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WWW.AAPG.ORG FEBRUARY 2016 EXPLORER Figure courtesy of Alan Kornacki

The Eagle Ford and the underlying Buda formations illustrate one of the mechanisms by which oils from adjacent unconventional reservoirs can have different fingerprints. Although oils in both reservoirs were sourced by the Eagle Ford, the two reservoirs contain different oils since one reservoir contains an “incremental” oil charge while the other contains a “cumulative” oil charge. Unconventional reservoir development ‘Oil Fingerprinting’ Has Wide Application By LOUISE S. DURHAM, EXPLORER Correspondent

ecovering the remaining oil (HRGC) to determine the abundance in the subsurface is a basic AAPG member Mark McCaffrey, geoscience manager of the different compounds. Between Rcommon goal of producers and of interpretive services at Weatherford Laboratories, 200 and 250 natural tracers are typically geoscientists. presented this information in his lecture “Three Key identified during an oil fingerprinting To accomplish this, they must first Applications of Oil Fingerprinting to Unconventional project, said McCaffrey. identify the location of what is left to Reservoirs: Characterizing Fracture Heights; Allocating “A key challenge in each project is recover. Commingled Production; and Identifying ‘Cross Talk’ the need to have a sample of oil that is This effort can be especially Between Horizontal Wells” at Unconventionals Update, an certain to come from each zone,” he challenging when dealing with AAPG Geosciences Technology Workshop recently held in said. “These single zone pure oils are called end-member samples, and there unconventional reservoirs, where McCAFFREY Austin, Texas. hydraulic fracturing and commingled are some great strategies the operator production from differing horizons/ can use to collect these samples, which formations are often the norm. allocation of individual pay zones to there are other considerations that go we use to calibrate each project. Enter “oil fingerprinting,” where the commingled production stream is into that decision. “The relative contribution of geochemical differences between needed for royalty/tax calculations. For starters, operators like to drill each end-member oil sample to a oil samples produced from different wells close together for a number of commingled sample is calculated using formations or zones can be used Identifying Cross-Talk reasons, both practical and financial. a linear-algebra solution of simultaneous as natural tracers to quantify the Then there’s the likely fallout from equations, where the number of contribution of each reservoir to a Then there’s the issue of identifying retracting an announced plan to drill, equations equals the number of natural commingled production stream, “cross-talk,” where induced fracture say, 500 wells in a certain play over the tracers,” he noted. “The accuracy of an explained AAPG member Mark networks from separate wells completed course of the coming year. Suddenly allocation estimate is very high.” McCaffrey, geoscience manager of in adjacent formations hook up with declaring that the plan has been scaled He emphasized also that interpretive services at Weatherford each other. This can occur when one back by half would have repercussions geochemical production allocation Laboratories in Dallas. well is drilled nearby another with each best avoided. is dramatically less expensive than “The average black oil has more completed in a different formation, Oil fingerprinting can be used to production logging and can be used than 100,000 different compounds, based on the belief that the fractures in decide if increased spacing is truly in situations where production logging and we measure about a thousand of the second well won’t be long enough to needed. cannot be applied. For example, it them,” McCaffrey said. “Two different tie in with the fractures from the first. can’t be used to assess the fracture oils could be 99-percent similar The geochemistry of the oils How It’s Done height given that the logging tool cannot in composition and still have 50 produced from the two wells will indicate traverse upward through the fracture. differences, so you can easily tell one if “cross-talk” is occurring. Overall, oil fingerprinting follows a The relative low cost for the oil from another – it’s like a fingerprint.” So, you ask, if you don’t want to somewhat simple blueprint. geochemical methodology allows field This low cost oil “fingerprinting” deal with unanticipated occurrences The procedure begins with dead engineers to monitor output frequently method has long been used to like fracture system hookups and such, oil samples collected at the earth’s over lengthy time periods. This enables geochemically allocate commingled why not just space the wells a bit farther surface using glass jars with Teflon-lined the operator to stay on top of the production from conventional apart? lids. The dead oil is evaluated using individual zones’ changing contribution

reservoirs. This may sound like a no-brainer, but high-resolution gas chromatography to the production stream. EXPLORER It also has key applications for unconventional reservoir development. Characterizing fracture height, for example, is a big deal. An operator can determine if hydraulically-induced fractures have propagated out of the formation containing a lateral wellbore and into an overlying or underlying pay zone, resulting in commingling of oil produced from different reservoirs. In other words, determine if the fracture(s) outgrew its anticipated length. Oil fingerprinting enables the operator to define what percentage of production is being sourced from each zone contacted by the induced fractures. This information, in turn, impacts the strategy for developing Photo courtesy of Weatherford Laboratories each of the horizons in the prospect. The different compositions of these oil samples cause them to have different appearances. Even two oils that appear very similar may In some instances, this quantitative have thousands of chemical differences, causing oils from different reservoirs to have unique “fingerprints.”

FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016

EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 25 MIDDLE EAST EXPLORER REVIEW GEO 2016 highlights Today’s Geosciences, Tomorrow’s Energy By EMILY SMITH LLINÁS, EXPLORER Correspondent n the midst of regional geopolitical and said the event offers numerous tensions and plunging oil prices benefits to attendees. Iworldwide, negative headlines from “The technical program is rich the Middle East aren’t hard to find. But, and varied. It is a good place to meet geoscientists and industry professionals geoscientists working in the Middle East know that the region has plenty of good and to expand your knowledge on Middle news as well. East geosciences and the Middle East oil A bright spot for the region and the and gas Industry,” he said. energy sector alike is GEO 2016, the 12th Middle East Geosciences Conference Record Attendance and Exhibition taking place March 7-10 in Bahrain. Conference organizers are not the The event, organized by AAPG, only ones excited about GEO. At a time EAGE and SEG serves as a model when energy sector events throughout of collaboration at a time when the world are facing lower-than-usual interdisciplinary work environments attendance, GEO registration is ahead and tightened company budgets make of where it was prior to the last event, cooperative efforts between professional held in 2014. The technical program societies more important than ever. committee received a record number of GEO 2016, titled “Today’s abstracts – 200 more than in previous Geosciences, Tomorrow’s Energy,” years. is supported by all six national oil Aiman Bakhorji, technical program companies in the Gulf Cooporation committee co-chair from Saudi Aramco, The 12th Middle East Geosciences Conference and Exhibition will be held in the city of Council as well as local geoscience said GEO is renowned as an outstanding Manama, Bahrain. Photo by Wadiia. societies from Bahrain, Qatar, Kuwait, the platform where new and exciting avenues United Arab Emirates, Oman and Saudi for learning and growth can continually Arabia. “GEO conference is the center of modern carbonates representing giant be found. For AAPG member Pinar Yilmaz, excellence for Middle East geosciences reservoirs,” she said. “This year, 2016 will be no different,” lead for external upstream projects at where you network with the decision Robert Kuchinski, president of he said, adding that the conference will ExxonMobil Exploration Company and makers, experts and colleagues working AAPG’s Middle East Region and senior be geared to address to current industry member of the GEO technical program in the Middle East oil and gas industry,” technical adviser for formation evaluation conditions. committee since 1998, the collaboration she said. in the Middle East/Africa Region for “With the current low global oil prices between national and independent oil “Field trips to Oman are always Weatherford, is planning to attend GEO and the associated future challenges companies and professional societies the highlight of the conference, as for the fifth time. that the industry will confront, limited creates a dynamic program that draws well as special field trips to Saudi He describes GEO as “the premier repeat attenders. Arabia and Emirates for ancient and geoscience conference in the region” See Technical Program, page 28

26 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 27 EXPLORER u IT Emerging Trends. Technical Program u Integrated Technologies for Better from page 26 Performance. u Unconventional Resources of the opportunities will arise to bring together a Middle East. wide range of technical expertise, and to u Industry-Academia Engagement empower our professionals to meet these and Collaboration. challenges head-on,” Bakhorji said. “GEO 2016 will provide such a unique New GEO events include a CEO opportunity and will be an important panel session featuring executives from source of knowledge-sharing and new ADCO, Aramco and Schlumberger, and a technology developments coupled with special session, “Women’s Growing Role extensive networking opportunities.” in the Energy Industry,” led by top female The final technical program will industry professionals. include 220 oral presentations, more than 150 posters, short courses and Middle Tomorrow’s Energy East region-specific field trips. The conference also will include five panel GEO’s focus on the future also includes sessions: a robust program for young professionals and students representing 18 universities. u Long Term Strategies Through In addition to networking events, Unpredictable Markets. technical courses, poster sessions and core workshops, the conference features a soft skills short course and a panel session discussing factors for success in the industry. AAPG’s Imperial Barrel Award competition, scheduled for March 6, will include eight teams – a record number for the Middle East Region. University students can participate in the EAGE GEO Quiz and the SEG Challenge Bowl during the week, and 200 high school students are invited to tour the exhibition. Kuchinski said he looks forward to learning about “Tomorrows Energy” at the conference. “We expect this energy will be discovered and produced using ideas and technologies that are new and/or haven’t been thought of or invented yet. It will cover the range from new conventional discoveries, bypassed pay, EOR, unconventional resources and things we may not know about yet,” he said. Kuchinski said he expects participation from throughout the region and the world, noting that energy professionals from abroad have much to learn from their colleagues in the region. “The Middle East contains the world’s largest oil and gas reservoirs distributed throughout many unique, interesting and dynamic countries,” he said.” These oil and gas deposits are being developed by NOCs that are committed to producing as much oil and gas as they can, using the most advanced technology and sophisticated techniques possible. “As much of this technology and techniques are adapted from other parts of the world, a geoscientist in the Middle East gets exposure and learning opportunities from people all over the world,” he said, “and also has the chance to explore many exciting and well- exposed outcrops. “Thanks to the arid climate and lack of vegetation, there are numerous outstanding geological sections to visit and study,” Kuchinski said. Bakhorji agreed that attending GEO 2016 is an invaluable investment for energy professionals everywhere. “As always, GEO 2016 will be attended by decision makers, senior executives and top notch scientists and engineers from across the industry providing international networking and educational opportunities that will enrich our career and professional development. This will indeed be the most productive and strategic time that one can spend away from his office in 2016,” he said. Event details, registration, sponsorship and exhibition opportunities are available

at http://geo2016.com. EXPLORER 28 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 29 EXPLORER PROTRACKS What Does the Future Geologist Look Like? By MATT BOYCE, Gulf Coast Section Young Professional

popular topic among educators uniformitarianism in Hutton’s day. and recruiters in our discipline is The historical precedent of geology This achievement evolved from past A what geology, and the people who endeavors to understand flow through practice it, will look like in the future. as an integrative science is well- macro-pores. It’s an interesting question when you Perhaps future geoscientists, with a consider the origins of our discipline, its established and the geologists of greater proclivity for physics, will tackle pioneers and how both geology and its the future will need to be equally the issue of hydrocarbon flow through practitioners have evolved in the past pico-pores and change how we look at 100 years. multidisciplinary. producible stratigraphic horizons. Arguably, one of the most important BOYCE contributors to our field was James More Math and Physics Hutton. He was known as “The Man Who by popularizing Hutton’s theories that mapping intensely by foot would be Found Time,” but not because he made of uniformitarianism. He rejected a staple in our education. I have been told by many that geology a deliberate effort to do so. Hutton was the prevailing theory of deposition However, even with Google, the will ultimately begin to merge more with attempting to solve the riddle of erosion by catastrophism and cemented mapper is no better off in understanding engineering, but I passionately disagree. and sedimentation – a quandary that had sedimentation and erosion as basic the subsurface. Mapping technology Much of the engineering we deal with plagued many naturalists and thinkers of geologic principles. may have evolved beyond the methods in industry is related to mechanical and the day. The result illustrates one of the employed by Smith, but the philosophy of physical properties. Currently, the most When he “found” time, he was hardly beautifully ironic truths of our science: “ground truthing” he pioneered remains pressing problem for a geoscientist is not aware that he was laying the foundations as my graduate adviser observed, “In fundamental. how to produce hydrocarbon, but how to of geology. geology, you’re only right for so long.” The historical precedent of geology as find more of it that will produce similarly. Hutton’s concepts were furthered by Our understanding of the earth and an integrative science is well-established My opinion is that sometime in the Sir Charles Lyell. Lyell’s main vocation, its history is being continually refined by and the geologists of the future will future, as the industry encounters more by all accounts, was law, yet he authored advances in research and technology. need to be equally multidisciplinary. The technical challenges, you will likely see one of the most widely used and Consider William “Strata” Smith, transition to this future reality already can additional math and physics courses in interesting books on geologic theory at creator of the first geologic map of be observed as the title of “geologist” is most geologic curriculums and new hire the time. Great Britain. During the early 1800s, supplanted by “geoscientist” on many geoscientists with multiple, potentially So influential was Lyell’s “Principles Smith conducted stratigraphic surveys business cards and email signature lines. unusual, skill sets. You likely will see less of Geology” that it was carried by his on foot, on horseback and other means Increased emphasis on math and reliance on the previous “standards” of friend Charles Darwin aboard the H.M.S. of transportation. In doing so, he physics will be required as techniques education in geology and more emphasis Beagle and heavily informed the theories inadvertently evolved our science to rely for extracting hydrocarbons from rock on using computer-based technology to put forth in “On the Origin of Species.” on extensive amounts of field mapping. become increasingly complex. rapidly find and produce new reservoirs. Nearly 200 years later, and despite For example, in the past 15 years and If Hutton, Lyell and Smith are any You’re Only Right For So Long the advent of remote sensing, mapping since the boom of unconventional plays, indication, the geoscientist of the future remains a staple of geologic training. If we have begun to produce hydrocarbons will be an out-of-the-box, integrated Lyell’s contributions evolved the Smith had access to Google Earth by from nano-pores, which was unthinkable thinker that will push the industry forward,

definition of a modern geologist some odd change of fate, it is unlikely 20 years ago and akin to the denial of and the rest of us along with it. EXPLORER

30 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER INDUSTRYHIGHLIGHTS

Schlumberger, Statoil To Conduct Multiclient algorithm provides a constrained inversion WAZ Survey in the Campeche Basin of the dip field with any errors globally minimized. Constraints are in the form of user- Schlumberger announced that Statoil Gulf picked positions on multiple seismic events. of Mexico LLC has signed an agreement You can also use conventionally tracked to license a large part of the WesternGeco horizons and well markers as constraints. Campeche wide-azimuth (WAZ) deepwater Visit www.dgbes.com for more information. multiclient seismic survey in the southern Gulf of Mexico. The license also includes Baker Hughes Begins Field Trial of LEAP collaboration with WesternGeco in the Adaptive Production System seismic processing phase. “We are pleased to have the opportunity Baker Hughes announced that the first to collaborate with Statoil in this breakthrough field trial of its “LEAP” adaptive production project, which is the first WAZ multiclient system, installed in December at a depth broadband survey in Mexican waters of the Gulf of 5,200 feet in the Mississippi Lime play in of Mexico,” said Maurice Nessim, president, Woods County, Okla., for SandRidge Energy, WesternGeco. “The complexity of the geology is delivering 300-percent greater oil production in the Campeche requires wide-azimuth and 200-percent higher natural gas production acquisition to image the subsalt effectively, and compared to the previous artificial lift solution. we are bringing all of our experience gained In continuous operation since its installation, the in the US Gulf of Mexico to deliver enhanced system was seamlessly deployed through the subsalt imaging to our clients.” deviated section of the wellbore and started on A fleet of eight vessels is conducting the its first attempt with no issues. survey in the Bay of Campeche for the three- An entirely new approach to artificial lift, year project. The project follows the Mexican the LEAP system is designed to adapt to the government opening licensing rounds to non- dynamic production profiles typical in most government companies for the first time. unconventional oil wells. For further information about the “Until now, operators have had to use Schlumberger multiclient surveys, visit www. 100-year-old technology that was never multiclient.slb.com/mexico. intended to operate in deep, horizontal wells or to handle the rapidly declining production rates OpendTect Pro Launches and high gas volumes typical of unconventional reservoirs,” said Wade Welborn, vice president Oil companies will be able to enhance profit of artificial lift systems at Baker Hughes. “As the and reduce costs with dGB Earth Sciences first artificial lift technology designed specifically “OpendTect Pro.” This unique seismic for these unique production challenges, the interpretation system is more accurate and LEAP adaptive production system represents a less expensive than all competitive systems step-change in artificial lift technology.” currently available on the market. With low oil The downhole system consists of a positive prices and oil companies looking to save costs displacement pump, which can be installed to OpendTect Pro is the perfect answer. sit deeper in a well than traditional rod pumps, “OpendTect, our flagship product, is a submersible linear electromagnetically used by thousands. We are proud to serve actuated motor, which drives the pump and open source users, academic users, and eliminates the need for the long rod string (a commercial users from across the globe. primary source of failure in rod lift systems) OpendTect is used for data visualization and and a sensor which provides pressure attribute analysis or as a platform to run special and temperature data to help ensure the workflows supported in commercial plugins. highest level of production optimization and Although basic interpretation tools have been system longevity. Unlike any other positive available for a long time, OpendTect has displacement pumping technology currently never been targeted as a competitive seismic available, proprietary software built into the interpretation system,” said Paul de Groot, LEAP system surface variable speed drive dGB’s president and co-founder. (VSD) integrates with downhole electronics The new release also marks the launch to allow remote adjustments to the pumping of a new commercial plugin by dGB Earth system speed and stroke length as production Sciences. The Faults & Fractures plugin rates change. offers new fault attributes and edge- “Overcoming the technical hurdles preserving smoothing filters, as well as tools associated with unconventional production isn’t for extracting fault planes and un-faulting the only advantage of the LEAP system. It also seismic volumes. is helping Baker Hughes meet its commitment Finally, dGB is implementing a new 3-D to deliver solutions that continually improve the HorizonCube algorithm also based on CSM safety algorithms. Instead of tracking the dip-field as For more information, visit with the current HorizonCube tracker, the new www.bakerhughes.com.

INMEMORY AAPG member William R. Dickinson Johnnie Boyd Brown, 77 has passed away. Midland, Texas, Feb. 10, 2015 Dickinson was renowned as a leader in the “plate tectonics revolution,” as Keith Allen Lowell, 87 well as for his work West Vancouver, Canada, July 17, 2015 in sedimentary geology and Pacific Rodney Rymer, 58 Oceana geology. Opelousas, La., Aug. 28, 2015 He was professor emeritus at the Lew Gilliam Schroeder, 86 University of Arizona Huntington Beach, Calif., Oct. 27, 2015 and a member of the U.S. National Rudolf B. Siegert, 81 Academy of Mobile, Ala., Oct. 14, 2015 Sciences. DICKINSON He was an Joseph Bernard Teichman, 81 AAPG member since 1975 and has Hallandale, Fla., Feb. 22, 2012 been honored with numerous awards throughout his distinguished career, Editor’s note: “In Memory” listings are including AAPG’s A.I. Levorsen based on information received from the Memorial Award. AAPG membership department. Age at He resided in Tuscon, Ariz., but time of death, when known, is listed. When passed away in his sleep while he was the member’s date of death is unavailable, on an archeological trip to Nuku’alofa, the person’s membership classification Tonga on July 21, 2015. He was 83. and anniversary date are listed.)

WWW.AAPG.ORG FEBRUARY 2016 31 EXPLORER HISTORICALHIGHLIGHTS Spain’s Oldest and Only Onshore Oilfield By JORGE NAVARRO COMET

he Ayoluengo field was the first – an agricultural terrain mostly dedicated commercial oil discovery in Spain and to growing potatoes and locally known as Tmore than 50 years later remains the “Loras.” Although this faulted anticline was only onshore oilfield in the Iberian Peninsula. suspected from surface mapping, it was the The field was discovered in 1964 and first properly matured seismic prospect to is still producing. It is located about 300 be tested north of the Burgos area. kilometers north of Madrid in the southern part of the Basque-Cantabrian Basin, The Well at Ayoluengo a geological region where natural oil seeps, tar sands and asphalt have been The location of the first exploration well recognized in outcrops since the early 20th was carefully chosen jointly by Amospain century. This region was considered highly and CAMPSA’s engineers and geologists. promising and most of the hydrocarbon It was named Ayoluengo-1, as per the exploration efforts in Spain during the 1940s small village nearby, and located some and 1950s were focused here. 15 kilometers southwest of the Zamanzas The Compañía Arrendataria del Valley, where previous shallow exploration Monopolio de Petróleos Sociedad Anonima drilling by CAMPSA had been concentrated. (CAMPSA), the Spanish-government The well was designed as a 3,500-meter petroleum monopoly created in 1927, was in deep test of the Cretaceous sandstones, the 1946 granted the hydrocarbon exploration Lower Jurassic marine carbonates, which rights for a 2,800 square-kilometer area had commonly recorded oil shows in the old north of Burgos. With light rigs, CAMPSA CAMPSA wells, and the Triassic section. drilled some shallow stratigraphic wells, Geological map of the Iberian Peninsula showing the Ayoluengo oil field location, about 300 kilometers The well was spudded on May 5, all based on surface geological surveys, north of the city of Madrid and within the Basque-Cantabrian Basin. 1964. From 990 to 1,346 meters’ depth, as no reflection seismic was available numerous poor shows of oil were then, resulting in many of the outcropping observed, none worthy of further interest. anticlines being pierced. On June 2, at 1,346 meters, the well Later exploration by CAMPSA was penetrated a 5-meter thick sandstone bed focused in the Zamanzas Valley, along the of Late Jurassic-Early Cretaceous age with eroded axis of a large surface anticline significant oil and gas shows. with outcropping Cretaceous tar sands in The geological personnel assigned its core. The shallow wells typically found permanently to the well at that moment heavy black oil while drilling the Cretaceous were William “Bill” Thornton Stoeckinger, an section; traces of gas and very small American geologist working for Standard amounts of lighter oil (26-28 degree API) Oil Company of California, and Cristobal along with salt water were occasionally Racero, a Spanish mining engineer recovered from the Jurassic carbonates, but working for CAMPSA. A first drill stem test no commercial flow was established. was run, but the testing tool failed. In order Additionally, during the 1940s, to improve the hole conditions for testing, rudimentary and experimental underground the well was deepened a few meters and a mining in the Zamanzas Valley was carried conventional core was cut over a very hard out by CAMPSA to exploit the tar sands – a shaly section, just below the oil-bearing process that was quite primitive. The tar sandstones. Then, a second DST (at 1348- sands were crumbled and dumped into 1361 meters) was run on Saturday, June 6, large water tanks heated by wood fire. a warm and sunny day. Heat favored separation of the The tool was opened at 8:55 a.m. with bituminous material that floated on the an immediate good blow that rapidly surface and then was manually collected increased to strong. The oil rushed up the with dippers and poured into barrels. Oil hole and flowed up to a height of some production was marginal – only about one 30 meters above the ground, spraying to three barrels per day. Eventually, this oil across the drilling site, vehicles and a exploitation was abandoned because of the nearby cropland. The flow period was one uneven distribution of the tar impregnations hour and was estimated at 85 barrels of and the poor economic returns. 36-degree API oil per day. After the Spanish Civil War (1936-39), Depth map for an intra-Jurassic horizon showing the Ayoluengo-1 exploration well proposed location. The well was rapidly controlled and the country faced economic sanctions from euphoria spread at the rig site, especially the international community. Economic and 25 percent to Texaco. In 1960, the exploration effort was focused on the among the Spanish technicians from isolation combined with nationalist rhetoric company named Amospain (CAMPSA 50 Ubierna permit, where photogrammetric CAMPSA who for the first time had committed the Franco dictatorial regime to percent, California Oil Company of Spain 25 studies, stratigraphic measurements, witnessed such an oil flow in their country. pursue self-sufficiency. By the late 1950s, percent, and Texaco Spain Inc. 25 percent) detailed surface geological mapping The church bells in nearby villages began the failure in self-sufficiency planning was awarded the operatorship of the and modern reflection seismic data was to ring, and inhabitants came to the well seemed clear and the regime began Ubierna Exploration Permit, located within acquired during the early 1960s. These location to witness the oil flow and to modifying economic policy and lowering the former state national reserve north of studies resulted in the identification of a celebrate the discovery by toasting with restrictions to foreign investment. Burgos, previously held by CAMPSA. faulted anticline in the subsurface, below an champagne, shooting fireworks and In December 1958, a new hydrocarbon Under this new operatorship, the Upper Cretaceous carbonate flat plateau collecting some oil samples as souvenirs. law was enacted for petroleum exploration Meanwhile, CAMPSA employees and production that sought to encourage were carefully planning how to smoothly Jorge Navarro, president of the AAPG-affiliated Association foreign companies to explore. As a result, communicate this exciting news to Ruperto of Spanish Petroleum Geologists and Geophysicists (AGGEP), most of the promising Spanish basins Sanz, the CAMPSA exploration manager. is geology manager at CEPSA E&P where he is responsible for were covered with exploration licenses. He was a Spanish mining engineer who coordination, management and supervision of the petroleum geology It allowed companies with as much as had been one of the petroleum exploration studies and works in regions where CEPSA E&P is currently active: 100-percent foreign capital to work in Spain, pioneers in Spain, as well as a strong South America, North/East Africa, Middle East, South East Asia while favoring the association of national supporter of foreign investment who was and Spain. He also is a member of the CEPSA E&P geosciences and foreign companies for the exploration fully persuaded of the commercial oil quality assurance committee, which validates geological works, of state reserves, with the state keeping a possibilities in this region. hydrocarbon prospects, volumetrics and risks, geological majority of the share. modeling, exploration and development well proposals. He holds In 1959, CAMPSA signed an agreement NAVARRO Spain’s “Oklahoma” a bachelor’s degree in geology from the Complutense University with American Overseas Petroleum Limited in Madrid, Spain. Before joining CEPSA E&P in 1997, Navarro worked for REPSOL as whereby CAMPSA assigned a 50-percent Ayoluengo was the first commercial oil exploration and development geologist in Syria and offshore Spain. He has been a interest in their exploration permits: 25 discovered in Spain after more than 100 lecturer on petroleum geology at several Spanish universities, also leading geological percent went to Standard Oil Company of field trips and he is an active member of EAGE and PESGB. California (which later became Chevron) Continued on next page 32 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER Continued from previous page dry holes. It brought great expectation to the region, presumed to become a prolific “black gold” producer. The oil discovery gained national attention with wide coverage by the media, which attracted many visitors to the well site, as shown in the photograph taken in June 1964. Photo taken by Federico Velez Rumors and speculations abounded in the national press as debate and discussion about the importance of the discovery, the size of the reserves and the quality of the oil made headlines. An “Oklahoma Oil Boom in Spain” was a ubiquitous headline in some national newspapers. To avoid speculation, trading of CAMPSA shares on the Madrid Stock Ayoluengo-1 drilling rig in June 1964, a few (Right) Ruperto Sanz, exploration manager in CAMPSA and one of the pioneers of petroleum Exchange was suspended for several days after first oil was tested. exploration in Spain. days. The radio, television and the popular “No-Do” (from “Noticiarios y Documentales,” or “News and blocks and the rapid lateral changes in dismantled in 1993 exposures of most of the elements of Documentaries”), a state-controlled series sand percentage, the thicknesses of the oil and all the production the Ayoluengo petroleum system: tar of cinema newsreels that contained servile columns are also extremely variable. is now transported by impregnated sandstones, the claimed reporting in favor of the Franco regime, Most of the individual reservoir layers are tanker trucks. Liassic source rock and textbook faulted widely broadcasted the good news. News isolated by shales and compartmentalized The Ayoluengo anticlines. Furthermore, the possibility of of the discovery of the first oil in Spain by faults, making the Ayoluengo not a oil is paraffinic with seeing working rod pumps in the field and being so widespread, well site geologist single field but a grouping of more than relative high arsenic of visiting the surface production facilities, Bill Stoeckinger became a sort of celebrity 100 independent small accumulations. and vanadium together with the large amount of well data in Madrid. The reservoir drive mechanism is primarily content, which and seismic coverage available, has long According to Ina Stoeckinger, Bill’s gas expansion and gravity drainage. Oils STOECKINGER damages catalysts made the Ayoluengo field an ideal training wife, “Bill was often recognized and present different physical properties from and makes it ground, providing students and non- congratulated on the street by total well to well and from sand to sand, with inadequate for refining. An alternative technical people an excellent demonstration strangers who had seen him on the gravities ranging from 20 to 39 degrees market was found and production was sold of a working petroleum system. television news covering the story.” API, which evidences the complexity of the as fuel oil to local users in northern Spain, The region provides an excellent CAMPSA’s Ruperto Sanz was also petroleum system. The organic-rich marls which continues today. Oil is produced by opportunity to initiate people into the oil continuously requested by the media to and black shales of Liassic age have been rod pumps, locally and popularly known in exploration and production industry, now release data related to the Ayoluengo largely considered the only source of the oil, Spanish as “caballitos.” The small amount enhanced by the March 2015 opening of discovery, even directly contacted by some but this is still far from clear. of produced natural gas is used to power the Oil Museum in Sargentes de la Lora government members to provide them with In 1965, two distinguished persons the rod pump motors and to generate the (Burgos). The museum is the first of this “original, unfiltered information.” visited the Ayoluengo field: Juan Carlos and electricity used in the field. Produced water category in Spain, and is sponsored by The two Spanish mining engineers, Sophia, then the prince and princess, later (around 50,000 parts-per-million sodium the municipality of the village of Sargentes Sanz and Cristobal Racero, were king and queen of Spain. The visit caused chloride) is reinjected in one disposal well. de la Lora and the Fundación Repsol in decorated in May 1965 by the Spanish some nervousness and embarrassment to A total number of 52 wells have been collaboration with – among others – the Government for their “outstanding the American technicians and executives drilled in the field, the last in 1990. At University of Burgos and the AAPG- participation in the Ayoluengo discovery.” because they did not know the protocol for present time only 10 wells are active. Many affiliated Association of Spanish Petroleum After the well testing, Ayoluengo-1 drilling how to greet and interact with royalty. It is of the infill wells encountered undepleted oil- Geologists and Geophysicists (AGGEP). continued to the top of the Triassic, reaching reported by some witnesses that, during the bearing sandstone beds, indicating the field The museum is focused on the a total depth of 2,397 meters on July 18, visit, when opening a choke in a well head, complexity. A 3-D seismic of 390 square upstream, introducing the petroleum 1964. An oil zone in the Lower Jurassic was some oil sprinkled the Princess’ white mink kilometers was acquired in 1988, aimed system concept and the wide variety of tested, flowing a small amount of 41-degree coat, but that she just shrugged it off. at identifying undrained reservoir beds geological, geophysical and engineering API oil, which was considered as non- An exploitation concession named and better estimating remaining reserves. techniques used in exploration and commercial. The well was plugged back “Lora,” partially derived from the Ubierna Unfortunately, poor results were obtained. production. An important part of the and completed in the upper sandstone bed. exploration permit, was awarded in Fifty years later the Ayoluengo field is still exhibition is dedicated to the Ayoluengo The Ayoluengo-1 discovery well December 1966. Some discussions were active. After several changes in operators field geology and its history, captured appeared to have been drilled on the held for laying a 150-kilometer oil pipeline and partnerships, the current field operator in an excellent collection of photos northwestern flank of the anticline and to the port city of Bilbao or even building a is Compañía Petrolífera de Sedano S.L. provided by the villagers and local not on the crest. Further appraisal and refinery in Burgos, as was requested by the (CPS), a subsidiary of the British company newspapers, together with press clippings, delineation drilling at higher structural local authorities. Leni Gas & Oil plc. The current average documentaries of the mid-60s, educative positions resulted in the discovery Finally, at the end of 1966, a 11-kilometer production is some 150 barrels of oil per panels, geological 3-D models, drilling of additional and thicker oil-bearing pipeline was completed from the field’s day and the accumulated oil production and production material and an authentic sandstones, but also evidenced a central facilities to a cargo terminal on the nearly 17 million barrels of oil. working rod pump. The museum is located high degree of vertical and horizontal Burgos-Santander highway, 300 meters inside Las Loras Geopark project. compartmentalization, showing that the lower in altitude. The first Ayoluengo oil The Oil Museum in structure was a complex anticline divided production started in 1967, reaching the Sargentes de la Lora A Gordian Puzzle? by several normal faults. peak production at 5,200 barrels of oil per The Ayoluengo field, as we know today, day in 1969. Since then, production has Deep river erosion in nearby areas The Ayoluengo discovery revitalized consists of a northeast/southwest-oriented gradually decreased. The pipeline was allows observation in spectacular geological seismic and drilling activity in the region, salt-cored anticline, related to Triassic salt but subsequent exploration wells during the movements. The field covers an area of 1970s and ‘80s only tested non-commercial 10 square kilometers and the structure oil flow rates. has a vertical closure of about 200 meters. After years of intense exploration activity, The structure is divided into two structural surprisingly, the Ayoluengo field still remains blocks by the Ayoluengo normal fault with a unique oil discovery as the only onshore 250 meters of vertical throw that affects the commercial oil field in Spain and also the Jurassic carbonates up to the surface. The only one in the entire Iberian Peninsula. This field produces from a series of thin lenticular geological singularity has brought recurrent fluvio-lacustrine sandstones packages of discussions among petroleum geologists Late Jurassic-Early Cretaceous age. because it is difficult to explain why a More than 50 separate oil and gas petroleum system is uniquely working at sandstone beds have been identified. Some this particular spot and nowhere else within beds are as thick as 10 meters, but the such a vast territory. average is only two or three meters. Areal Despite a long history of hydrocarbon extent of these lenticular sandstone bodies exploration, the Basque-Cantabrian Basin is varies widely. Some are quite restricted, Schematic regional cross section through the Ayoluengo oil field. The deep erosion by rivers still considered one of the most prospective while others are laterally continuous. The in nearby areas allows observe on outcrops most of the elements of the Ayoluengo petroleum sedimentary basins in Spain and, at the sandstones have mean porosity values system. It allows observing tar impregnated sands in the core of a spectacular surface present time, most of the exploration activity of 18 percent and permeabilities up to anticline. Also are observed outcrops of the black shales of Liassic age which have been largely for conventional and non-conventional plays considered as the only source rock for the Ayoluengo oil. 1 Darcy. Because of the number of fault is mainly concentrated in this region. EXPLORER WWW.AAPG.ORG FEBRUARY 2016 33 EXPLORER POLICYWATCH OCS Issues Drive Policy Debates By EDITH ALLISON, Geoscience and Energy Policy Office Director

hree outer continental shelf (OCS) and central Gulf of Mexico and Alaska’s oil and gas issues were prominent Beaufort and Chukchi seas and Cook Tin 2015 policy debates: Atlantic An important driver for new rules Inlet. This fall, the Obama administration offshore, including permitting seismic further restricted oil and gas leasing by surveys and a new five-year lease sale is the fact that loss of well control canceling 2016 and 2017 lease sales in plan; new rules for offshore drilling incidents are occurring at the same the Beaufort and Chukchi seas. equipment, notably blowout preventers; The mid- and south-Atlantic planning and new rules governing Arctic rate as before the Macondo blowout. areas may be included in the 2017-22 drilling. The topics will continue in the OCS leasing plan the Bureau of Ocean policy limelight in 2016 as the federal ALLISON Energy Management (BOEM) began government moves to release final developing in 2014. versions of the permits, plans and rules. The moratoria were lifted in 2008 and Atlantic OCS. The draft for the proposed 2017-22 Presidential and/or congressional Atlantic OCS lease sales were planned. The current (2012-17) OCS leasing leasing plan released for comment in moratoria on oil and gas exploration in the However, after the Deepwater Horizon plan initially allowed leasing only in the January 2015, includes Atlantic, Beaufort Atlantic OCS started in the mid-1980s. blowout, drilling was again banned in the historically active areas of the western Sea and Chukchi Sea lease sales. The next version will reflect public comments received in 2015, and will be available for additional public comments in the first half of 2016. Whether it will include Atlantic and Arctic areas is unknown. Separately BOEM decided in July 2014 to allow seismic (geological and geophysical, or “G&G”) surveys in the Atlantic OCS. Several companies applied and a lengthy public comment and review process continues. The most recent activities include: u The National Oceanographic and Atmospheric Administration (NOAA) recently completed review of four applications from seismic companies under the Marine Mammal Protection Act. BOEM still has additional work to complete its review, which could take many months. u In early December, Representatives Mark Sanford (R-S.C.), Bobby Scott (D-Va.) and 29 others sent a letter to BOEM asking for a halt to the use of seismic airguns in the Atlantic. The legislators claim that close to 90 towns, cities and counties along the Atlantic coast have passed resolutions opposing seismic testing and/or drilling. Representing different opinions, the Outer Continental Shelf Governors Coalition, which includes governors of North Carolina, South Carolina, Virginia and Maine as well as Gulf Coast states and Alaska, has called for keeping mid- and south-Atlantic leasing in the 2017-22 plan.

Proposed Well Control Rule

The Bureau of Safety and Environmental Enforcement (BSEE) released its proposed well control rule in April and is now considering thousands of pages of technical comments from more than 170 commenters. In December, the Senate Energy and Natural Resources Committee (ENR) conducted a hearing on the well control rule and offshore oil and gas regulations, where Brian Salerno, BSEE director, testified about the well-control rule. Salerno declined to predict what revisions BSEE will make in the final rule or when it will be released. The hearing illuminated the differing opinions on some of the most contentious elements of the proposed rule: Salerno testified that the new specifications for design, repair and maintenance of blowout preventers (BOP) incorporate the recommendations of multiple investigations and studies of the Macondo blowout, and numerous meetings with industry. He noted also that an important driver for new rules is the fact that loss of well control incidents are occurring at the same rate as before the Macondo blowout.

Continued on next page 34 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER Continued from previous page In case readers are wondering about the Register for AAPG Congressional Visits Days rules under which Shell drilled its Chukchi He identified major areas of contention Sea well this summer – those were included oin your colleagues and the visibility and support for petroleum to the draft rule: drilling margins, blowout in its revised exploration plan negotiated AAPG Geoscience and Energy geoscience in Washington, helping preventer inspections, accumulator with BOEM in 2015. The plan generally Policy team in Washington, D.C. to make AAPG a top resource for capacity and real-time monitoring. He also J mirrored the preliminary Arctic drilling rule. for Congressional Visits Days, March policymakers seeking technical acknowledged industry concerns about The preliminary 2017-22 leasing plan 14-16, 2016. information on oil and gas issues. overly proscriptive language and potential includes lease sales in both the Beaufort Through CVD, you can advocate The registration deadline is Feb. 16. unintended consequences of the rule. and Chukchi seas, although a 25-mile near- for issues important to our members, To register, reserve a hotel room Erik Milito, group director for upstream shore exclusion zone would be added to including rulemakings impacting at the Army and Navy Club, or get and industry operations at the American the Chukchi Sea area. hydraulic fracturing and methane additional information on CVD or Petroleum Institute (API) complained that emissions, increased access to onshore Washington, D.C., contact Edith Allison industry experts did not get sufficient time Good news from the Gulf of Mexico and offshore federal lands, and federal at [email protected] or 202-643-6533, or enough meetings with BSEE staff to fully research to improve technology and or visit www.aapg.org/about/aapg/ comment on the well control rule, but he In the meantime and in the midst of

build a STEM-proficient workforce. offices/policy. EXPLORER thanked BSEE for scheduling an additional declining oil prices, new projects in the Gulf Your participation helps raise meeting later in December. of Mexico have come online, and offshore He objected to the rules’ lack of U.S. production rose to over 1.68 million flexibility to allow for the unique conditions appraisal wells expected in the Arctic also stated that use of performance- barrels per day in September, offsetting of each well. He also voiced concerns offshore, the cost, over 20 years, of the based seasonal drilling limits and use of declines in some shale-producing regions, about proposed modifications to BOPs same season relief well requirement alternative spill mitigation would reduce according to the Energy Information

and expanded BOP testing schedules would overwhelm potential benefits. He costs and be more effective. Administration. EXPLORER that could create additional risk for safe operation of the equipment. In addition, Milito quoted economic analyses that showed the 10-year cost of the rule to industry would be $32 billion – an eye- catching 36-times greater than BSEE’s cost estimate of $883 million. Jaqueline Savitz, vice president for U.S. oceans at Oceana, stated that her group considers the rule to be a significant improvement over existing regulations, although not sufficiently robust. She recommended the use of dual blind shear rams in BOPs to provide needed redundancy. Savitz also stated concerns that the compliance times – as much as seven years – were too long, creating unnecessary risk until industry installs improved equipment. She also recommended larger penalties for industry noncompliance and increased government oversight.

Arctic OCS

BSEE is working to finalize its Arctic drilling rule even though there is no expectation of any Arctic activity for many years, due to Shell canceling its Chukchi Sea drilling plans and Statoil’s announcement that it would exit all of its existing Chukchi Sea leases. The most contentious elements of the draft rules are those calling for a stand-by rig capable of drilling a relief well, a shortened drilling season, and the requirement for the capability to capture oil using only mechanical techniques (i.e., excluding burning or using dispersants). At the December hearing, Milito described substantial economic and employment impacts from federal policies that keep the huge potential Alaska oil and gas resource from being developed. He also recommended performance- based rules that would allow equivalent technologies, rather than the proposed rigid requirements. He also observed that some of the BSEE proposals could decrease safety and increase pollution, for example, by requiring more vessels at a drilling location. Sen. Maria Cantwell (D-Wash.), ranking member of the ENR committee, stated that six to eight loss of well control incidents each year “emphasize the need for comprehensive and robust safety standards.” Cantwell also pointed out that, according to the U.S. Coast Guard, there is no way to clean up oil in ice. For that reason she recommended that the Arctic and well control rules be finalized quickly. Mark Rockel, principal consultant at Ramboll Environ, testified that because of the low probability of a blowout of the shallow, low-pressure exploration and WWW.AAPG.ORG FEBRUARY 2016 35 The Geophysical Corner is a regular column in the EXPLORER, edited by Satinder Chopra, chief geophysicist for Arcis Seismic Solutions, Calgary, EXPLORER TGS, Canada, and a past AAPG-SEG Joint Distinguished Lecturer. GEOPHYSICALCORNER

Figure 1: Comparison of λρ – µρ and PI-PDF well log curves. On scaling the curves such that Figure 2(a): Crossplot of PI vs PDF attributes computed for well log data for the time interval they are seen to overlay for the background lithology, no separation is seen on the λρ – µρ shown in figure 1, color-coded with density. It is noticed that density decreases in the direction curves in the Ireton and Duvernay shale sections while enough separation is seen on the PI and of the black arrow. Points corresponding to low density (high PDF, low PI) are enclosed in the PDF curves for well (a) A and (b) B. red polygon as they show the characteristics of a source rock. Poisson Impedance Application to Shale Resource Characterization By RITESH KUMAR SHARMA and SATINDER CHOPRA

he main goal for shale resource to exhibit a somewhat better cluster characterization is usually the separation, though it may not be always T identification of sweet spots, which the case. In the latter case, an interesting represent the most favorable drilling attribute called “Poisson impedance” targets. (PI) has been suggested to work better.

Such sweet spots can be identified Mathematically, PI is given as PI = IP - cIS, as those pockets in where the index c describes the optimum

the target formation rotation of the cluster of points in the IP

that exhibit high vs IS crossplot space for obtaining better total organic carbon litho-fluid discrimination. The value of (TOC) content, ‘c’ is determined as the inverse of the

as well as high slope of the regression line on an IP vs IS brittleness. This is crossplot. PI shows better discrimination based on the fact of pay sands from the background that the higher the lithology. TOC in a formation, With this done, we may still be faced SHARMA the better its potential with the issue of variation in sand quality, for hydrocarbon i.e. the ability to separate clean sands generation, and the from shaley or dirty sands. For this higher the brittleness, purpose, another attributes known as the better its Poisson dampening factor (PDF) was fracability. introduced and is mathematically given The TOC content as: is usually determined from well log data and calibrated with the available core CHOPRA A crossplot of PI vs PDF is found data. But such a to be interesting as it helps with determination can only be made at the lithology discrimination and extended location of the wells, even though we characterization of sand quality. Good wish to determine this property in a quality or clean sands exhibit high values lateral sense. of PDF and low values of PI. We thus turn our attention to seismic data. As there is no direct way of Application to the Duvernay Formation computing TOC using seismic data, we adopt indirect ways for doing so. Armed with all this information about PI and PDF, we decided to apply it to Separating Gas Sand Reservoir an unconventional reservoir, i.e. the From Background Lithology Duvernay Formation of central Alberta, Canada. The Duvernay shale play has TOC changes in shale formations are been recognized as the source rock expected to influence the P-velocity (V ), for many of the large Devonian oil and P Figure 2(b): Back projection of enclosed points on the well log curves shows that these points S-velocity (VS) and density (ρ) of those gas pools in Alberta, including the early are coming from the Duvernay zone for both the wells. formations. Consequently, it should be discoveries of conventional hydrocarbons possible to detect changes in TOC from near Leduc, south of Edmonton, surface seismic response through the usually product-attributes are computed. The extent of separation between such Canada. We began with the well log data impedance inversion process. Examples of such attributes are λρ, μρ, clusters depends on the impedance and crossplotted different attributes, During the last decade, prestack κρ and Eρ, where λ and μ are the Lame’s contrast between the litho-fluid and the which can be derived seismically. The impedance inversion has been used constants, ρ is the density, κ is the bulk background lithology. commonly considered pairs of attributes to compute the P-impedance (IP), modulus or the incompressibility, and E Enhanced separation between for the purpose are IP - IS, λρ – μρ, IP

S-impedance (IS), VP/VS and density the Young’s modulus of the rock. clusters of points representing gas sands – VP/ VS, etc. As discussed above, for attributes, amongst others. Of course, In the case of conventional reservoirs, and those that represent the background conventional gas sand reservoirs, λρ the robust determination of density from it is usually noticed that on a crossplot lithology is sought by crossplotting and μρ pair of attributes is found to be

seismic data requires very long-offsets of IP vs IS, the cluster of points coming other combinations of seismic attributes superior to the IP - IS pair, or some other and noise-free data, which are seldom from a gas sand reservoir tend to such as λρ and µρ. Gas sands usually attributes in terms of fluid and lithology available. So as to avoid this stringent separate out from the cluster that exhibit lower values of λρ and high requirement for determination of density, represents the background lithology. values of μρ, and are generally seen Continued on next page 36 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER Continued from previous page discrimination. We make a comparison of λρ - μρ with PI - PDF attributes. Figure 1 shows this comparison. The panels to the left in figures 1a and b show the λρ (red) and μρ (blue) curves for wells A and B. The curves are scaled in such a way that they overlay each other for the background lithology (in the present case the zone marked above the Duvernay formation). In the Duvernay zone (source Figure 3: (a) Crossplot of PI and PDF attributes derived from post-stack joint inversion along an arbitrary line that passes through the different rock), we expect lower λρ values and wells over a zone that covers the Duvernay formation. Blue polygon encloses points with low PI and high PDF seen on well-log data for the somewhat higher values of μρ, compared Duvernay formation. Points enclosed by red polygon show lower values of PI and higher values of PDF than the values of points enclosed by blue with a non-source rock. However, we do polygon. (b) Back projection of these two polygons shows the prospective zone in the Duvernay shale. not notice this on the λρ and μρ curves in figures 1a and b. On the right panels in figure 1a and b, we have plotted PI and PDF curves, again scaled so that they overlap in the background litho- intervals as for the λρ and µρ curves. Notice that the PI and PDF curves show a crossover separation in the Duvernay intervals in the two wells with respect to the background litho-intervals. With this encouraging observation, we crossplotted PI and PDF for both the wells for the same intervals, color-coded with density values and is shown in figure 2. Data points corresponding to very low density correspond to high PDF values and low PI values, which may be considered favourable for source rocks. To ascertain the location of these points on the log curves, we enclose some Figure 4: Horizon slices from (a) PI and (b) PDF attribute volumes averaged over a 10 ms-window above the Duvernay base horizon. As low PI points on the crossplot in a polygon and and high PDF correspond to the Duvernay formation, the presence of Duvernay formation has been mapped laterally as indicated with the black back-project them on the log curves. outline. However, within the Duvernay formation the quality of it is shown in (c). Notice in figure 2b, the data points come from the Duvernay zone in both the wells. both these attributes using simultaneous We picked up post-stack joint inversion Employing the P-impedance and We now turned our attention to or joint impedance inversion. Both these data for the present study, which uses S-impedance low-frequency impedance deriving the PI and PDF attributes from types of impedance inversion technique the PP- and PS-stacked data from a models, and the appropriate wavelets seismic data. As these attributes are a have been discussed by the authors in multicomponent seismic survey over the function of IP and IS, we need to compute an earlier GeoCorner article (July 2015). area. See GeoCorner, page 41

WWW.AAPG.ORG FEBRUARY 2016 37 EXPLORER FOUNDATIONUPDATE Gifts of Time Build a Solid Foundation By APRIL STUART, AAPG Foundation Programs Coordinator ime is a precious commodity to us such as scoring and all, and is particularly treasured selecting scholarships to T by geologists who have a unique students, grants for select relationship with the concept of time. geoscience initiatives, A geologist’s mind is trained to leap education awards backward and forward by epochs, honoring geoscience which stands in stark contrast to most teachers and professors, people’s frames of reference, which are and more. You too can get typically measured by minutes or days, involved in one or more or decades at most. selection committees. Time is an especially precious commodity when it is given to the AAPG A Multitude of Foundation, in whatever increment. Committee Efforts Since its inception, the success of the AAPG Foundation has been fostered The longest standing by generous volunteers, all of whom committee is the share a deep passion for advancing the 60-person strong Grants- geosciences. in-Aid Committee, a joint Those same volunteers who have AAPG/AAPG Foundation contributed with their treasure have Committee, chaired this also dedicated their time and talents to year by longtime volunteer creating programs that will encourage and Mike Unger. The Grants- financially assist like-minded scientists in-Aid Committee and aspiring to do the same. its leadership spends a Foundation volunteers pause at 2015 ACE. (L-R) MVSP Committee chair, Don O’Nesky, MVSP Committee Foundation volunteers serve in many significant amount of time member Meg Kremer and AAPG Foundation chair, Jim Gibbs. capacities. They donate time and talent reviewing and scoring serving as Trustees, Members of the masters and doctoral applications for grants submitted by science excellence to youth among his or Corporation and Trustee Associates. research projects and will award $260,000 undergraduate geoscience students and her peers, who receives a cash award and Many AAPG Foundation supporters also in research funds 2016. their respective student organizations, an expense-paid trip for two to ACE. donate a considerable amount of time to The Military Veterans Scholarship awarding top students and organizations The Foundation welcomes new the Foundation’s program committees, all Program Committee, chaired by Don with $500 grants. volunteer interest to participate on the of which provide the guidance needed to O’Nesky, will soon begin its second year The Professorial Award panel, led committees described. If you are interested shape the Foundation’s impact. of reviewing applications submitted by by Carol Wicks, chooses one university in donating time and would like to learn These gifts of time and talent pay in big veterans who are studying geoscience at or college professor who has shown more about volunteering for one of the ways, and the Foundation would not be the undergraduate level. excellence in his or her field. Foundation’s program committees, please able to administer its key programs without The newly established L. Austin Weeks Our Teacher of the Year Award panel, email program coordinator, April Stuart, them. Their leadership supports many of Committee, chaired by AAPG Emeritus led by Laura Zahm, annually selects one and express your interest at astuart@aapg.

the administrative efforts of the programs, member Ron Nelson, will soon begin K-12 teacher who has demonstrated earth org or call (918) 510-2644. EXPLORER

38 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER PROFESSIONALnewsBRIEFS David Allard, to general manager- Previously consultant/owner, Fiduk southern region, QEP Energy, Denver. Consulting, Houston. Previously geoscience manager-southern Andrew Miall has been awarded the manager, QEP Energy, Tulsa. Francis J. Pettijohn Medal in Sedimentology Dan A. Billman, to president-elect, and the Geological Association of Canada’s Pennsylvania Council of Professional lifetime achievement award, the Logan Geologists. He will begin his term as Medal in 2014. president in 2017. Billman is president of He received the Digby McLaren Medal Billman Geologic Consultants, Houston, Pa. in Stratigraphy from the International Robert J. Brewer, to president, Commission on Stratigraphy in 2015. Miall Cepstrum Geophysical, Houston. is professor of geology at the Department Previously region business development of Earth Sciences and Gordon Stollery manager, Baker Hughes, Houston. Chair in Basin Analysis and Petroleum Carl Fiduk, to senior geophysicist, Geology at the University of Toronto, Freeport McMoran Oil and Gas, Houston. Canada.

Foundation Contributions for December 2015 General Fund R. Heather Macdonald In honor of David Cook and Jack Wood Austin Jack P. Martin Chuck Caughey R.J. Bottjer and Sara L. Peyton Sandy Meyer Janet Brister Rita Monahan Military Veterans Walter P. Buckthal Sally M. Murray Scholarship Fund Marvin P. Carlson In memory of Grover E. Murray John and Camille Amoruso Martin M. Cassidy Susan S. Nash Robert J. Ardell Talia F. Cooper Jim and Susan Rawson In memory of Rudolf Siegert Arlen L. Edgar Gene E. Richards Lee B. Backsen In honor of Jim Gibbs In memory of E.T. Hill Richard A. Baile James L. Eymann Gary Splittberger In memory of Frances Baile Larry P. Friend Chuck and Cathy Williamson Lee and Joanne Billingsley Robert A. Hefner IV Grant from Williamson In memory of Robert R. Berg Sigrunn Johnsen Family Fund Chevron Matching Employee Fund In memory of Gordon K. Yahney Matching gifts given Vlastimila “Vlasta” Dvorakova by Norbert Cygan Charles G. Johnson Grants-in-Aid Fund Robert L. 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Von Tungeln Chevron Matching Employee Fund H.W. “Dub” Peace II and Paul Wehrle Matching gifts given Norma J. Peace David W. Zwart by Jayne Sieverding James L. Pear Martin M. Cassidy Henry S. and Rosario T. Pettingill John H. and Colleen Silcox Sanford I. Phillips Amoruso Special Named Grant Edward B. Picou Jr. Publications Fund John and Colleen Silcox Sarah Springer and Rusty Riese John and Camille Amoruso In memory of William H. Silcox David C. Salter Peggy J. Rice Charles W. Welby Carlton and Patricia Sheffield Edmund G. Wermund Jr. Martin and Arlyn Shields In memory of Jon R. Withrow Named Grant Allan C. Smith Grover E. Murray Oklahoma City Association of William and Pamela Stephens Professional Landmen (OCAPL) Robert E. Webster Awards Fund In memory of Jon R. Withrow Edmund G. Wermund Jr. Robert R. Berg Outstanding Research In memory of Grover E. Murray Award Lawrence W. Funkhouser William V. York Josephine F. Berg Named Grant In honor of Melissa York In memory of Robert R. Berg Jean K. Funkhouser In honor of Named Public Service Fund Teacher of the Year Award Lawrence W. Funkhouser The Gibbs Family Endowment Fund Gerald E. Harrington Susan and Charlie Hollis James A. Gibbs In honor of Larry Funkhouser In memory of Rudy Siegert Daniel A. Busch Library Fund Patrick M. Tolson Mruk Family Named Grant Newly Released Publications Fund April L. Parsons Frederick L. Stead Digital Products Fund Roger W. Stoneburner Professorial Grant Fund Baylor University Memorial Grant Claude E. Bolze John W. Shelton Sara S. Snell In honor of Larry Funkhouser E.F. Reid Scouting Fund University of Colorado Chevron Matching Employee Fund Frederic A. Tietz William E. and Jean Crain Matching gifts given Named Grant by Norbert Cygan University of Tulsa Bob and Arlene Lindblom Terri Duncan Richard K. Strahan In memory of John and Ronald L. Hart Ginny Jacobson Bryan Haws Wichita State University Richard K. Strahan James A. 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40 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

clay decreases its density, which may GeoCorner lead to an increase in PDF values from page 37 associated with it. Higher content of quartz enhances its brittleness, and thus the better quality of shale we refer from the two seismic datasets in the to has a reference to its brittleness. The broad zone of interest, the P- and red zone thus may be considered being S-impedance attributes are derived. more brittle than the blue zone. Figure 3a shows the crossplot of As we desire to identify sweet spots inverted PI and PDF along an arbitrary in a lateral sense over the interval of line passing through different wells interest on a 3-D volume we generate over a zone that broadly covers the horizon slices of PI and PDF over a Duvernay interval. The overall shape 10 ms window above the base of the of the cluster of points seen on this Duvernay interval, and are shown in crossplot is similar to the equivalent figures 4a and b. We interpret low PI crossplot obtained with well log data and high PDF values as corresponding shown in figure 2a. to the Duvernay zone based on the The cluster of points enclosed in the above-mentioned observations, and are blue polygon are those that exhibit low shown enclosed within a black outline. PI and high PDF values on the log data Finally, based on the values of PI for the Duvernay formation. The points and PDF we compute the quality of the enclosed in the red polygon show lower Duvernay shale, shown in figure 4c. values of PI and higher values of PDF The magenta color corresponds to the than the points enclosed in the blue background trend, and the quality of polygon. the shale increases as we go from dark Analogous to the conclusions that blue to light green colors. we draw from such crossplots for In conclusion, thus we have conventional plays, we notice that as demonstrated the characterization of we go from the blue to the red polygon, the Duvernay shale in terms of PI and the quality of shale should improve. The PDF attributes in a qualitative way, back projection of these two polygons both on well log and seismic data. We on the seismic line shows the location of suggest the application of the above these points and as shown in figure 3b workflow for characterization of other we observe these points highlighting the shale plays and also ascertain how well Duvernay interval. What we conclude the predictions are met on drilling. here is that the red zone represents We thank Arcis Seismic Solutions, better quality shale that the blue zone. TGS, for allowing us to present this

The presence of quartz (sand) in the work. EXPLORER

permeability to produce adequate flow to EMD maintain the energy transfer required for the electricity production. Experimental from page 42 systems have been explored in a few countries in which permeability has been of geothermal generating systems for enhanced by hydraulic fracturing or different types of geothermal resource. similar techniques (enhanced geothermal At a few locations (e.g., Larderllo, Italy; systems, or EGS), but these systems are The Geysers, California), the resource is still in the investigation stage. dry steam at a temperature greater than Some geothermal waters, especially 300 degrees. The steam is fed directly with magmatic heat sources, have a to a turbine, which turns a generator high mineral content with solutes that to produce electricity. More commonly can include economic concentrations the resource is water at a temperature of silica, zinc, lithium, manganese, gold, of greater than 360 degrees, which silver and some rare earth minerals. After is flashed to water and steam at the the heat has been extracted from the surface. The steam is fed to a turbine, geothermal fluid, one or more of these which turns a generator to produce minerals may be extracted, increasing electricity and the water is injected back the economic return of the geothermal into the reservoir to maintain reservoir operation. fluid volume. For both dry-steam and Direct use of geothermal resources flashed-steam power plants, more than and geothermal power production make one stage may be connected in series valuable contributions to the mix of with the steam pressure decreasing at renewable but they are geographically each stage. limited to where high temperatures are For geothermal resources with near the surface or where the use justifies temperatures lower than about 350 the cost of drilling. degrees, a binary system is used. In Ground-source heat pumps may be the binary system the geothermal fluid used at almost any location where space passes through a heat exchanger where heating and/or cooling, and even hot a secondary fluid with a lower boiling water and refrigeration are required. temperature than water is vaporized. Heat pumps are not an energy source The geothermal fluid is then reinjected and consume electricity. However, the back into the reservoir. The vaporized energy savings that result from replacing secondary fluid drives a turbine that most conventional heating and cooling turns a generator to produce electricity. systems with ground-source heat The secondary fluid is cooled before pumps would make a large reduction returning to the heat exchanger resulting in the quantity of electricity needed to in a back-pressure on the turbine. Two be generated. The most efficient and types of secondary fluid are used in cleanest electricity is the electricity that

operating binary power plants, organic does not need to be generated. EXPLORER refrigerants, (the organic rankine cycle, or ORC), and a mixture of two Paul Morgan is chair of the components, typically ammonia and Geothermal Energy Committee of water (the Kalina Cycle). AAPG’s Energy Minerals Division. He Economic geothermal power is also senior geologist of the Colorado generation systems are currently sited Geological Survey of the Colorado on geothermal resources with sufficient School of Mines, Golden, Colo. WWW.AAPG.ORG FEBRUARY 2016 41 EXPLORER DIRECTOR’SCORNER When Will Oil Prices Go Up? By DAVID CURTISS his month our coverage has focused be slowing, it’s still growing year after year on the Middle East, a region rich in as people are born and begin consuming Thydrocarbons and culture. These In every conversation I have energy, as economies grow and people hydrocarbon resources will be discussed seek higher standards of living. in great detail at next month’s GEO 2016 with AAPG members ... I’m asked Eventually, this additional demand will conference in Bahrain. what I’m hearing about the sop up the excess supply. This biennial event, organized by AAPG with support from the Society duration of this low price cycle. Risk and Currency of Exploration Geophysicists and the European Association of Geoscientists CURTISS Risk is another variable that hovers over and Engineers is a prime opportunity for crude oil markets. geoscientists in the region to gather, learn future. But with the news cycle full of OPEC supply in 2015 averaged 31.6 A disruption of supplies to crude oil and discuss how best to find and develop stories of layoffs in the energy sector, million barrels per day with production markets can quickly cause prices to these resources. bankruptcies both occurring and looming, increasing 0.7 million barrels per day in spike. Current prices indicate that the But the Middle East is also a region and a global supply glut, it’s hard not to 2015 and EIA forecasts an additional 0.5 market doesn’t seem to fear a disruption, experiencing significant geopolitical get swept up in the panic. million barrels per day increase in 2016. notwithstanding the regional geopolitical tension with the continued and expanding The price of oil is controlled by many The effect of Iranian oil reaching global tensions. But, events have a history of conflict with ISIL and the re-entry of Iran variables, but the four most important are: markets may change these numbers. EIA proving the market wrong. onto the global stage with the lifting of expects Iran to grow its production by 0.3 Finally, a strong U.S. dollar is pushing economic sanctions that had been in u Supply. million barrels per day in 2016 and 0.5 down crude oil prices. Currencies do not place for decades. u Demand. million barrels per day in 2017. have an absolute value, but rather are The region is also experiencing u Risk. Non-OPEC supply increased by 1.3 valued against something else. economic upheaval with lower crude oil u Currency effects. million barrels per day in 2015 but EIA Crude oil is valued against the U.S. prices dramatically increasing budget forecasts a decline by 0.6 million in 2016. dollar, and if you plot crude oil prices deficits in many countries at the same Unlike me, analysts at the U.S. Energy This supply growth has been driven against the U.S. dollar index over the time as they seek to diversify their Information Administration (EIA) are in largely by U.S. unconventional resource past five years, you see a strong inverse economies. the prediction business. And while they developments, which experience rather correlation between the two: As the dollar Events and trends in this part of the do not, as far as I know, have special rapid production declines and don’t require weakens the price of crude oil rises and as world can have dramatic impact on our or secret information, they do have a the long investment cycles of large offshore it strengthens the price of crude oil drops. industry and profession. And we’re seeing systemized approach to monitoring and installations, for example. That correlation is particularly pronounced it right now in crude oil prices. using data to develop price forecasts. The world is producing more oil, and today. The slide in crude oil started late last that is pushing crude oil prices lower. Many variables control crude oil prices, year and has accelerated in the past Supply and Demand But the world is also consuming more but these four are the most important month. As I write this column, the WTI oil. variables. price is hovering just over $28 a barrel. When you look at supply it’s clear In 2015 the EIA estimates the globe Low prices cure low prices in Everywhere I go and in every that the world is producing more than consumed an average of 93.8 million commodity markets. I don’t know when conversation I have with AAPG members, it’s consuming. EIA’s January 2016 Short barrels per day and they expect that that is going to happen, but our job is to be sooner or later – and it’s usually sooner Term Energy Outlook reports that global oil demand to grow by 1.4 million barrels per ready when it does. – I’m asked what I’m hearing about the inventories grew by 1.9 million barrels per day in both 2016 and 2017. duration of this low price cycle. day in 2015 and they expect that trend to Think about that number: 93.8 million We’ve all heard the old saying that continue in 2016 with inventories growing barrels per day is roughly 1,085 barrels per prediction is difficult, especially of the by an additional 0.7 million barrels per day. second. And, while demand growth may

DIVISIONSREPORT: EMD Geothermal’s Contributions to the Energy Equation By PAUL MORGAN

he Energy and Minerals Division of for these processes may be direct-use the AAPG focuses on unconventional Approximately half of the energy geothermal hot water, as no energy Thydrocarbon energy resources, such conversion is required to provide the heat as coalbed methane and gas hydrates and consumed in an average home in the and water. alternative energy resources, such as coal, Sources of hot water at the surface uranium and geothermal energy. United States, and in many governmental, – thermal springs – are geographically These resources are important to commercial and industrial buildings, is limited and are often further limited by members of AAPG not only because they used for heating and cooling. existing users, most commonly spas. compete with conventional hydrocarbon However, as is known by all drillers and resources but also because they often share MORGAN most members of AAPG, temperatures of technologies in exploration and production. 212 Fahrenheit and higher are commonly High-temperature geothermal resources encountered at typical drilling depths share many of the temperature challenges heat pumps, use the near surface of the consumed in an average home for oil and gas. Where energy prices are that are found in deep oil and gas wells. earth as a thermal reservoir at ambient in the United States, and in many high, and multi-story apartment buildings This article takes a broader look at or near ambient temperatures. They do governmental, commercial and industrial are common, such as in Germany, deep geothermal resources in terms of their not use heat directly from the interior of buildings, is used for heating and geothermal may be economic to produce overall contributions to the energy use the Earth, but use a heat pump to move cooling. Ground-source heat pumps are hot water for space heating. equation. heat from inside a building to the ground very efficient for heating and cooling, These conditions are not common Geothermal is a renewable resource with in the summer and from the ground to the operating with 20-50 percent of the in the United States, but hot produced a useful temperature range from ambient building in the winter. energy consumption of conventional water is a common by-product of oil and to more than 650 degrees Fahrenheit. In A heat pump is the main cooling systems. Widespread adoption of gas production. Wherever this water is addition, it can be a source of important component in a refrigerator or ground-source heat pumps could reduce likely to have a long lifetime, it could be a minerals. refrigerated air conditioning. In a electricity demand in the United States useful emission-free energy resource as Uses of the geothermal resources fall refrigerator, heat is transferred from by 10-30 percent, with a similar reduction direct-use geothermal. into three categories. These are, in order the icebox to cooling coils outside in carbon emissions. of increasing temperature: ground-source the refrigerator. In refrigerated air Many relatively small-scale domestic, Electricity Generation heat pumps, direct use and geothermal conditioning, heat is moved from inside commercial and industrial uses of fuel electricity generation. a building to cooling coils outside the and electricity are for low-temperature The highest temperature geothermal building. However, a ground-source heat applications or hot water. These uses resources are used to generate Ground-Source Heat Pumps pump is reversible and can transfer heat include space heating, greenhouse electricity. There are three basic types out of the building in the summer and into heating, aquaculture, food processing Ground-source heat pumps, also the building in the winter. and preparation, and timber drying. The known as geothermal or geoexchange Approximately half of the energy most efficient source of heat and water See EMD, page 41 42 FEBRUARY 2016 WWW.AAPG.ORG EXPLORER

WWW.AAPG.ORG FEBRUARY 2016 43 EXPLORER

44 FEBRUARY 2016 WWW.AAPG.ORG