Geology and gas in Northern Ireland

Derek Reay

Geological Survey of Northern Ireland

Talk Outline Introduction - Geology of Northern Ireland

Petroleum Exploration

– History of exploration

– Conventional and unconventional gas resources

– Basins and exploration plays

• Northeast ‘concealed’ basins

• Southwest Carboniferous basin

– Legislation and regulation

Competition for the subsurface

Conclusions

Geology of Northern Ireland

Indigenous oil and gas resources

Could

• Enhance security of supply by reducing dependence

on imported oil, gas and coal

• Provide inward investment and create employment

• Generate income through corporation tax (30%), ring-

fenced petroleum tax (32%) and royalties (7.5%) on

petroleum production revenue

Potential for oil and gas resources in NI

– limited exploration but no production to date

History of exploration

• Petroleum legislation enacted in 1964

• First licence, in Fermanagh, in 1965

• Exploration activity modest – cycles driven by prices,

discoveries in analogous settings and technological

advances

• 10 seismic surveys and 15 exploration wells

• Some oil and gas shows but no production

BUT

Significant untested potential for both oil and gas

Concealed Basins

Reservoir Permo-Triassic sandstones

Seal Permo-Triassic

mudstones

Source Carboniferous coals & shales

Traps Structural

Stratigraphic

Secondary targets Carboniferous sandstones

Unconventional gas

Petroleum prospectivity in Northern Ireland

Southwest

Unconventional gas

Reservoir Carboniferous shales

& sandstones

Seal Carboniferous shales

Source Carboniferous shales

Traps Non-essential

Elements of conventional petroleum exploration play

Elements

Organic-rich source rock

Permeable reservoir rock

Impermeable caprock

Efficient trap

Processes

Source maturation

Trap formation

Hydrocarbon migration

Relative timing of processes is crucial!

Conventional and ‘unconventional’ gas resources Characterised by reservoir quality and production methods

Conventional

Porosity 10 – 30% Permeability 1mD – 1 Darcy

Gas is present as free gas, trapped within the pore space

between the grains of the reservoir rock

Gas will usually flow from the reservoir up to the surface under

its own pressure

Unconventional

Porosity <5% Permeability 0.01mD – 0.1mD

Gas may be present as free gas, as adsorbed gas – attached

to the rock grains – or a mixture of the two

Gas requires stimulation to be produced to the surface at

commercially viable flow rates

Unconventional gas resources

Petroleum exploration plays

Northeast play area –

Deep sedimentary basins concealed by Antrim basalts

Primary conventional and secondary unconventional targets

Exploration is technically challenging

Source risk, trap delineation challenges

Southwest play area –

Carboniferous sedimentary basin

Primary unconventional and secondary conventional targets

Widespread gas shows

Production challenges

Northeast Permo-Triassic Basins

Source: Carboniferous coal/shale

Reservoirs:

1. Triassic sandstones

2. Early Permian sandstones

3. Carboniferous sandstones

4. Carboniferous shales

Caprocks:

1. Triassic salt/mudstone

2. Late Permian salt/mudstone

3. Carboniferous shales

Conventional Traps:

1. Tilted fault blocks

2. Anticlines

3. Fan deposits

BM

Structural trapping styles

Examples from the Larne and Lough

Neagh Sedimentary Basins

a & b Tilted fault blocks

(a tested by Ballytober well)

c Anticline

(tested by Annaghmore well)

Source rock quality & type reservoir quality

• Good quality source rocks present in coalfields

• Both oil and gas prone source rocks - maturity ranges from oil to gas windows

Exploration results to date

• Six exploration wells

– 3 in Larne basin, 2 in Lough Neagh basin, 1 in Rathlin Basin

• Minor gas shows and oil staining in Larne and Lough Neagh basin wells

• Ballinlea well (Rathlin Basin, 2008) – recovered live oil to surface

FUNCTIONING PETROLEUM SYSTEM PROVEN

Risk Factors

• Poor imaging of sub-basalt structure

• Source rock – distribution and maturity

• Timing of migration and trap formation

• Post-migration leakage

Current petroleum licences

Exploration in the Northwest Irish Carboniferous Basin

Source

Carboniferous shale

Reservoir

Carboniferous

sandstone and shale

Caprock

Carboniferous shale

Traps

1.Anticlines

2.Flower structures

3.Basin-centred gas

4.Shale gas

Source rock quality & type and reservoir quality

• Poor to moderate quality source rocks

• Maturity in wet to dry gas window

Lough Allen Basin

sandstones

Exploration results to date

• Fifteen vertical exploration wells (9 in Fermanagh, 6 in Cavan & Leitrim)

• Gas shows in all wells except Glenoo

• Exploration targets Lower Carboniferous Mullaghmore and Dowra sandstones

• widespread, thick sandstone with poor porosity and permeability

• tight gas sandstone, requires reservoir stimulation

• Dowra No. 1 well fractured in 1981, increased flow rate tenfold

• Evergreen Resources drilled six wells in 2001 and hydraulically fractured

the Mullaghmore Sandstone reservoir before running extended well tests

on five of these wells – flow rates not commercially viable

• Modelling suggests that horizontal wells might sustain commercial production

Lough Allen Basin recently re-evaluated for shale gas potential • Bundoran Shale Formation identified as prospective for shale gas

• Petroleum licence issued in Fermanagh & licensing options in Cavan/Leitrim

• Remaining potential in tight gas sandstones and better quality ‘basal

sandstones’

Current petroleum licences

Shale gas – issues to be addressed

Technical/economic –

• No horizontal wells drilled yet

• Shale gas production not tested

Environmental protection –

• Water use, storage, disposal

• Pollution risks – water, air, wildlife, habitats

• Induced seismicity

Health & safety

Planning –

• Impacts of development on people, tourism, agriculture, traffic,

infrastructure, economy (local/national)

Public confidence and acceptance

NI Petroleum legislation

• Petroleum (Production) Act (Northern Ireland) 1964

• Petroleum Production Regulations (Northern Ireland) 1987

• Hydrocarbons Licensing Directive Regulations (Northern

Ireland) 2010

• Petroleum Production (Amendment) Regulations (Northern

Ireland) 2010

PPA1964 – enabling legislation

• Vests petroleum in DETI

• Powers to grant licences to “search and bore for and

get petroleum”

• Ancillary rights to land access (not used to date)

• Rights to compensation

• Powers to make regulations (fees, licence areas,

model clauses etc)

Initial Term 5 years Exploration (including well)

1st Renewal term 5 years Appraisal (further wells)

2nd Renewal term 20 years Development/production

NI Petroleum legislation

Petroleum Production Regulations (Northern Ireland) 1987

Petroleum Production (Amendment) Regulations (Northern

Ireland) 2010 • Model Clauses – general not specific

– Work Programmes

– Commencement, abandonment and plugging of wells; control of development wells

– Storage tanks, pipes and pipelines

– Avoidance of harmful methods of working (includes prevention of escape of petroleum into waters or

water-bearing strata); notification of incidents; availability of funds to discharge any liability for damage

– Safety, health & welfare of employees

– Training

– Records, samples, returns, confidentiality

– Department’s rights of access & inspection, power to execute works, right of entry

– Compensation for damage, provision of insurance (to cover Licensee and Department)

– Powers of revocation, provisions for arbitration

What can the Licensee do without additional consent?

• Desk studies – analysis of existing data, data re-processing,

re-interpretation

• Laboratory analyses of existing rock samples

• Walk-over surveys – geological mapping, outcrop sampling

Regulation of exploration activities -1

Additional consents required for:

• Environmental studies & seismic monitoring (DETI/NIEA)

• Fieldwork in ASSIs (DETI/NIEA)

• Shallow drilling (DETI/NIEA)

• Geophysical & geochemical surveys (DETI/NIEA)

• Siting and drilling of deep exploration boreholes (incl. hydraulic

fracturing) (DETI/NIEA/HSENI/Planning)

• Testing and production of hydrocarbons (DETI/NIEA/HSENI)

Regulation of exploration activities - 2

DETI’s responsibilities

• Exploration , appraisal and development programmes

– Technical Standards

– Seismic risk

– Compliance and enforcement

• Financial & technical capabilities of licensees and operators

– Insurance, bonds

– Qualifications & experience

• Application for Consent to Drill

– Well design, construction, cement & casing, testing, completion &

abandonment

• Co-ordination of consents/permits/licences?

Regulation of drilling operations

• Planning permission, with Environmental Impact Assessment

• Licensing of water abstraction, storage and disposal

• Compliance with legislation:

Health & Safety

Environmental Health

Pollution Prevention and Control

Groundwater protection

Competition for the subsurface

Permeable sandstones that are good petroleum reservoir rocks also have

potential for:

– Storage of carbon dioxide

– Deep geothermal energy potential

Additionally, in the Larne basin there are thick beds of Triassic and Permian salt

which have potential for :

– Storage of natural gas

– Compressed air energy storage

Salt exploration in the Larne area

GDL

BGE

IMSL

ISME

BGE Bord Gáis/Storengy

GDL Gaelectric Developments Ltd

• Compressed Air Energy Storage

IMSL Islandmagee Storage Ltd

ISME Irish Salt Mining & Exploration

• Active salt mine at Kilroot

PC Portland Cement

• Mining lease (not in use)

PC

Larne

Storage caverns for natural gas in Larne Lough

3D seismic

through cavern

site

Block diagram showing

possible distribution of

storage caverns

Schematic cross-section

showing dimensions of

storage cavern

Images courtesy of Islandmagee Storage Ltd

Conclusions

• Realistic prospects for indigenous resources of oil and gas onshore Northern

Ireland but further exploration needed

• Shale gas project in Lough Allen Basin; secondary potential in tight gas

sandstones and deeper ‘basal’ Carboniferous sandstones

• Three licences in Rathlin and Lough Neagh-Larne Basins with primary

conventional gas potential and secondary unconventional gas potential

• Unlicensed areas in Lough Neagh and Larne basins

• Effective regulation is critical to the successful development of these resources;

shale gas exploration and production presents new challenges

• Deep geological rock formations in Northern Ireland have several potential uses,

which may compete for the same subsurface or which may be able to co-exist at

different depths or within the same rock units at different locations