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Searching for new oil deposits

Deep beneath the hurricane-stirred waters of the Gulf of Mexico lies a lot of oil, probably a lot more than the 1.7 million barrels per day, or one-third of domestic U.S. production, currently pumped out.
/ Source: Forbes

Deep beneath the hurricane-stirred waters of the Gulf of Mexico lies a lot of oil, probably a lot more than the 1.7 million barrels per day, or one-third of domestic U.S. production, currently pumped out.

Prompted by sky-high oil prices, soaring demand from gas-guzzling sport utility vehicles, China's growing economy and near maxed out production and political tensions in other oil-producing regions, big energy companies like BP, Royal Dutch/Shell, ChevronTexaco and Anadarko Petroleum are seeking to find oil in new geographies.

“The easy oil has all been found. The next stage of exploration will be more complex,” says Gerchard Pfau, BP's team leader of advanced imaging. “In the past, people could almost drill in random locations and find oil. Now we have to go to more complicated geological structures.”

That means mapping and measuring regions in the Gulf that a decade ago were thought too challenging to explore. Finding oil trapped between salt, sand and rock at depths of thousands of feet will never be easy or cheap, but continued improvements in imaging techniques are opening up areas to petroleum geologists and engineers that they couldn't see before. Currently, ten of the 125 oil rigs in the Gulf operate in water depths of more than 5,000 feet.

Whereas oil companies first used imaging to merely find a reservoir, now they are using it to document a reserve's characteristics and to predict what its output is likely to be over the years.

The most widespread imaging technique employs three-dimensional seismic technology to transmit and record a digital image of the reflection of sound waves through water and rock. 3-D seismic mapping, which began to take off in the Gulf in the early 1990s, is often performed by an oil company's contractors by trailing long hydrophone cables off of the back of a ship. The cables receive the sound waves when they bounce off the subsurface.

Interpretation of the data is a collaborative process that frequently takes place in theater-like visualization labs where engineers and geologists make critical decisions about which areas are most promising to drill.

Though 3-D seismic imaging is considered the industry gold standard, many oil exploration outfits also use gravity gradiometry. Originally developed in the Cold War to help navigate Trident submarines, the gravity gradient method captures minute changes in gravitational fields.

This is more suited to depict the Gulf's low-density salt structures. Companies that use both techniques say the combination gives them a distinct advantage over competitors in creating the best possible picture of the Gulf's unusually complex geological structures.

But not all companies can use both techniques. There is a shortage of gravity gradiometry technicians. One expert estimates that there are 50 professionals proficient in 3-D seismic imaging for every one gravity gradiometry expert.

Even with experts and resources, perfect results still are not guaranteed. ChevronTexaco spent $50 million drilling the deepest well in the Gulf of Mexico and it turned out to be dry, though it was thought to hold 200 million barrels of oil. "There will always be a level of uncertainty," says Stuart Strife, exploration manager, deepwater exploration, Gulf of Mexico, Anadarko, a company that uses both methods. "It is not an exact science, it is an interpretative science."

What has also been advancing oil companies' ability to interpret vast amounts of deepwater imaging data is faster, more powerful supercomputers. “Enhancements in computers allow us today to do in a weekend what took six months ten years ago,” says BP's Pfau. Although data interpretation is faster, exploration costs are still rising as deepwater searches require costly technical equipment. ExxonMobil reported 2003 total exploration costs of $1.03 billion while ChevronTexaco's costs were $571 million.

For all its advances, few in the industry think today's technology is adequate to find the oil they will need tomorrow. “The things that we find today are barely visible today. We are always operating at the edge of what we can see,” says Rich Sears, vice president, deepwater and exploration, Royal Dutch/Shell. “The most striking thing is how exploration continues to advance. There may be 10 to 20 billion barrels in the Gulf, but they won't be found using the techniques available today.”

“More sophisticated questions drive us to find better images of the subsurface.” says Rich Hoffman, Shell's vice president, deepwater and exploration research. ““At the end of the day, the earth is our ultimate competitor.”