Bringing new life to the North Sea with GIS Ben Rodgers Petroleum Services Deloitte

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Bringing new life to the North Sea with GISBen
RodgersPetroleum ServicesDeloitte Touche
LLP
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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

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Introduction
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• Recent trends in the North Sea

• 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

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Activities in the North Sea broadly classified as

• 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

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• Number of wells being drilled and number of
  significant discoveries is in decline

BUT!
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• 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
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• 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!

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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
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• But still questionable whether exploration and
  development will increase given size of these
  companies, without farm-in from existing North
  Sea players

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• New entrants seeking new opportunities

• 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

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• New entrants seeking GIS data and apps

• 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

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GIS in oil and gas an overview

• 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

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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

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Where can GIS help?

• 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

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GIS data in oil and gas sources

• 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

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GIS data in oil and gas core datasets
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GIS data in oil and gas core datasets

• Normally 5 main datasets provided
• Blocks
• Wells
• Fields
• Platforms
• Pipelines
• Plus other cultural and technical datasets

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GIS applications in oil and gas

• 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

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GIS tools used by the independents

• Company Interests
• Production Profiling
• Fallow Acreage
• Prospects and Well Trading
• Deals and Historic Licencing
• Seismic Tools

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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

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

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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

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• 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

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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

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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

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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.

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• 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.

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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

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Conclusion
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• 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

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Thank you Any questions?