Do technical studies reduce subsurface risk in hydrocarbon exploration: and if not, how do they add value?
Frank J. Peel, Jonathan White, 2016. "Do technical studies reduce subsurface risk in hydrocarbon exploration: and if not, how do they add value?", The Value of Outcrop Studies in Reducing Subsurface Uncertainty and Risk in Hydrocarbon Exploration and Production, M. Bowman, H. R. Smyth, T. R. Good, S. R. Passey, J. P. P. Hirst, C. J. Jordan
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The title ‘The Value of Outcrop Studies in Reducing Subsurface Uncertainty and Risk’ might suggest that we expect new information to improve prospect risk, but this is not correct. Gaining new information generally does change our estimate of prospect risk: the change may be up or down, and the average of all possibilities is zero change. You cannot acquire data for the purpose of increasing the probability of success. We should expect that: (a) the expected value of the risk of a single prospect, post-data, is equal to the prior (pre-data) value; and (b) risk should become worse for the majority of prospects. New information adds value, not from changing pre-drill risk, but from decisions made as a consequence. The main value added is from identifying prospects not to drill, thereby saving the cost of likely dry holes, and by choosing the ones to test first, accelerating revenue from a successful outcome. Further value is added if the new information leads to the identification of new prospects or new plays, or suggests follow-on potential elsewhere in the region. Value may also be added if the new information is negative for a whole region, enabling us to focus our attention elsewhere.
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The Value of Outcrop Studies in Reducing Subsurface Uncertainty and Risk in Hydrocarbon Exploration and Production
Field studies over a range of scales have been important in the upstream oil and gas industry for decades. Advances in digital outcrop characterization and data capture, coupled with increased computational capabilities, have resulted in a resurgence in fieldwork; these field studies are required to develop depositional, stratigraphic and structural concepts and provide the data which underpin the current generation of complex, computer generated, 3D subsurface models. These models provide an informed means of benchmarking the subsurface along with a more considered view of subsurface uncertainty and management of the risks identified. The papers in this volume cover safety in the field, frontier basin petroleum system assessment, field appraisal and development including unconventional resources, applications of techniques such as LiDAR and 3D photogrammetry, and uncertainty characterization. The studies were undertaken in diverse locations such as the Faroe Islands, Italy, Algeria, India, the USA and Trinidad; they represent a range of tectonic settings and a wide geological time frame. The spectrum of papers is testament to the value and integral position that fieldwork occupies within the modern hydrocarbon industry.