Bringing new life to the North Sea with GIS Ben Rodgers Petroleum Services Deloitte & Touche LLP.

Bringing new life to the North Sea with GIS

Ben Rodgers

Petroleum ServicesDeloitte & Touche LLP

Contents

Introduction - Recent trends in the North Sea

Overview of GIS in oil and gas

GIS data in oil and gas

GIS applications in oil and gas

Conclusions

Introduction

• Now a diverse mix of players in the North Sea

• Rise of new entrants and independents

• Small independents like Tullow, Caledonia, Centrica and Venture

gaining footholds in Southern North Sea

• Larger independents like Perenco & Apache benefited from divestitures

by BP, Shell and BG

• Partly driven by spate of divestitures following

consolidations amongst majors & super-majors

Recent trends in the North Sea

• Majors & super majors developing existing portfolios and

drilling the odd wildcat

• Independents focusing on smaller marginal prospects and

drilling exploration wells. Near-field prospects can be rapidly

developed using existing infrastructure

Activities in the North Sea broadly classified as

Number of wells being drilled and number of

significant discoveries is in decline

BUT!

Policy changes in the North Sea

• ‘PILOT’ launched 2001 in UK – ‘use it or lose it’

• ‘Promote’ licences launched in 21st UK licensing round

• ‘Frontier’ licences launched in 22nd UK licensing round

‘Promote’ licences in pink

• ‘Promote’ resulted in 36 new players being awarded

licences in the North sea – mostly small and medium sized

independents

• 22nd UKCS Offshore and the 12th Onshore Licensing

Rounds were announced on 4th March 2004. This is the

largest offshore licensing round since the 2nd Round in 1965!

“I'm announcing today the opening of the 22nd Offshore and the 12th Onshore Licensing Rounds and with another new type of licence - the "Frontier" licence - for blocks in the Atlantic Margin, West of Shetland.

The "Frontier" licence will allow companies to apply for relatively large amounts of acreage in these challenging areas at reduced costs, so they can make an effective assessment of the most promising 25% on which to focus their exploration and development. The changes reflect the additional technical difficulties in these areas.“

Stephen Timms MP, Scottish Offshore Achievement Awards, March 4th 2004

• But still questionable whether exploration and

development will increase given size of these

companies, without ‘farm-in’ from existing North

Sea players

• Information and data about the North Sea have never been

better

• Wealth of technical, seismic and contractual information

available

• Companies questioning ways of managing these resources in a

useful & efficient manner

• GIS is being widely adopted for this purpose…

New entrants – seeking new opportunities

• New entrants seeking timely GIS updates, historical data and

detailed geological, contractual, field reserve and

infrastructure data

• Seeking ability to quickly understand the marketplace and

reliably make key decisions

• Requirement for an all encompassing system for deployment

in new ventures, E & P, business planning, trading and asset

management departments

New entrants – seeking GIS data and apps

• Geographic patterns hidden in standard column-row data

structure

• Location is critical in the oil and gas industry

• GIS captures the synergy of analysing data simultaneously

at a location and attribute level

• In the past complex spatial modelling has been restricted to

geophysical applications

GIS in oil and gas – an overview

• Shift from traditional operational and drafting role of GIS to a

broader strategic role

• New entrants and independents looking for the successful

marriage of complex databases with new functionality to

support their day-to-day responsibilities

• GIS tools such as ‘company interest’ searches, ‘production

profiling’ and ‘fallow acreage’ reports are now commonly

used in the industry

GIS in oil and gas – an overview

• Gas market analysis – solving network and connectivity

issues such as security of supply and pricing

• New ventures – looking for new opportunities

• Exploration – integrating data sources

• Business planning – considering spatial dimension of

potential acquisitions/disposals and tie-in options

• Asset management – supporting management of corporate

spatial databases – [Shell & independents]

Where can GIS help?

• Wide range of sources – government, field operators and

other equity partners

• UK DTI & Norwegian NPD

• UKOOA via Deal (www.ukdeal.co.uk)

• In GOM and Australia – MMS & Australian government

• Seismic data from service companies

• GIS providers have a wide network of data scouts and

contacts collecting this data on a continual basis

GIS data in oil and gas – sources

GIS data in oil and gas – core datasets

GIS data in oil and gas – core datasets

• Normally 5 main datasets provided:

– Blocks

– Wells

– Fields

– Platforms

– Pipelines

– Plus other cultural and technical datasets

• GIS data provides a detailed overview, but the GIS

functionality adds the real benefit to the independents

• Independents need to act quickly and with confidence in

new acquisitions or exploration opportunities

• They need a database and tools to extract important

commercial and geotechnical information with ease

• They need to access this data quickly in order to be

responsive and competitive

GIS applications in oil and gas

• Company Interests

• Production Profiling

• Fallow Acreage

• Prospects and Well Trading

• Deals and Historic Licencing

• Seismic Tools

GIS tools used by the independents

Company Interest Searches

• Users can generate a list of assets in which a company currently holds an interest

• Company A wants to see what fields Company B has interests in, in Norway

• Users can select parent or subsidiary companies, and restrict the search to blocks, fields, wells, pipes etc as well as specify the % interest range that Company B might have

•For M & A transactions, the Overlapping Company interest search compares the assets of two companies

• Results are presented thematically and in tabular format for further analysis

Production Profiles• If the GIS database contains historic and future production figures for fields then users can visualise these figures by running a production profile

• By selecting fields in the map window or from a list, graphs are generated illustrating the production figures

• Production profiles can additionally be constructed from pipelines and terminals, thus showing any bottlenecks or spare capacity

• Particularly useful tool for independents who might be looking for near-field prospects close to existing infrastructure with some spare capacity

Fallow acreage

• Fallow blocks are those Traditional Licences where the initial term (originally 6 years, now 4 years) has expired and there has been no drilling for 4 years and no dedicated seismic or other significant activity for 2 years

• The fallow GIS tool identifies such blocks and can be restricted to search the blocks of a specific company or country

• This is a useful tool for new entrants and independents in determining which blocks might be worth considering if and when they become available

Seismic tools

• Seismic tools have been developed that enable users to load (UKOOA data for instance), visualise and analyse seismic navigation data.

• Useful tools within the GIS environment include 2D line and shot-point survey labellers and the parallel lines tool.

• Service companies and independents find them helpful for preliminary planning and 3D cost survey analysis

Prospects & Well Trading• Data is often held in disparate locations preventing users from making meaningful analysis in the context of existing acreage, drilling activity, infrastructure, future licensing rounds, fallow acreage etc.

• Prospects tools manage prospect inventories within GIS. Prospects can be added into a centralised database via the GIS interface.

• Well trading tools manage well-trade related data. Current & historic well data and trade scenarios are held within a centralised database and can be accessed through a GIS interface.

• Traded wells are classified either as ‘offered’ or ‘requested’. Offered wells are owned by the database owner at the time of the transaction whilst ‘requested’ wells represent wells gained from a trade.

Deals and historic licensing• Tracking deals and historic asset ownership in the North Sea is a critical process for any effective business development strategy

• New entrants are unlikely to have built up this kind of detailed information and often rely on commercial sources

• The GIS database combines details of all deals and historic block changes in the North Sea since exploration began

• Users can query the deals or historic blocks database through the GIS interface

Conclusion

• After almost 40 years of exploration, the North Sea is witnessing a

steady influx of new entrants and small to medium sized independents

• Lured by government initiatives and corporate divestitures resulting from

consolidation of majors and supers

• New players are embracing GIS as a method of managing disparate

data sources

• Detailed GIS databases, updated on a regular basis and oil and gas

specific tools, are allowing the new players to stay competitive

• The demand for such datasets and GIS tools has seen a shift in

emphasis away from operational or drafting systems to strategic and

business support systems

Thank you

Any questions?