Future trends in oil and gas exploration

Mike Daly

Executive Vice President, Exploration

BP plc

Oil Technology Centenary 2013

Imperial College London

2

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Global trends influencing exploration

Future resource trends

• Deepwater: the drill out of passive margins and deltas

• Arctic: ice-bound offshore

• Re-exploration of onshore basins and shallow waters

Unexplored Rock Volume

Tight oil giants, Shale plays & EOR

Future technology trends

• Striving for the perfect seismic image

• Ice management, arctic spill response and reduction of environmental impact

• Transformation of Kh and m & characterisation of unconventional pay

• Digitisation of everything

Future geopolitical trends

• Mexico, Venezuela, Iran, KSA…

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0

1

2

3

4

5

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Tn

bo

e

Onshore North America Middle East (On/Offshore) Onshore Latin America

Onshore C.I.S. Onshore Africa Onshore RoW

Shelf (ex Middle East) Arctic Deepwater

Canadian Oil Sand Venezuela: Orinoco Belt

Global discovered resource and yet-to-find

Conventional YTF:

~ 1 tnboe

1948: Ghawar

176 bnboe

1936-40: Supergiants in

Venezuela, Iran, Kuwait

1927: Kirkuk

26 bnboe

1992: Qatar Arch

103 bnboe

2004: Yoloten

67 bnboe

Source: IHS, EIA and CAPP (Canadian Association of Petroleum Producers) for onshore North America data

1979: Troll

10 bnboe

1971: North Field

193 bnboe

Conventional Discovered: 4.5 tnboe

Deepwater Arctic

sub-ice

Onshore Shelf

5

Exploration delivery – past and future

Yet-to-find resources

Source: BP Yet-To-Find data

Deepwater (400m+) discoveries creaming curve

0

50

100

150

200

0 100 200 300 400 500 600 700 800 900 1000

bn

bo

e

2000’s

1990’s

1980’s

Brazil, GoM

Angola

GoM, Caspian

NW Shelf

Brazil pre-salt

GoM Pg

Brazil, E. Africa,Levant

Deepwater - cumulative discovered resource • The growth and decline of deepwater

• The emergence of the sub-ice arctic

• Sustained delivery from onshore & shelf

6

Material new plays of the past decade –

all deepwater

GoM

Palaeogene

S Atlantic

pre-salt

Angola

Congo Fan

East Mediterranean

pre-Messinian

5

5.5

11

38

Deepwater

discovered volumes

(bnboe)

7

13

East India

gas

East Africa gas

Source: IHS EDIN / BP

• Deeper stratigraphy in existing provinces

• Delta’s medial and distal fans

7

Arctic yet-to-find

S Kara

YTF volume (bnboe) 10

N Kara

5

R Barents

Laptev 10

E Siberia

R Chukchi

0.1

NE Greenland

17

Baffin

Source: USGS 2008

7

C Beaufort

2

Arctic Islands

7

7

Lofoten

N Barents

1

Alaska:

Beaufort

N Slope

Chukchi

62

72

127

31

8

E95

E38

R

R

N S

Line 5404 Pokak 3D VTI CI 2 km

E95 Amplitude

C.I. 50m

- - - -

3 km

50 km

Arctic frontiers:

untested basins with great DHI’s

2 km 2 km

9

Ice management key issue

Lomonosov Ridge, 2004: seabed coring, drifting pack ice

10

And society’s opinion?

11

Onshore

frontier

basins

80bnboe

Saharan

Africa

Sub-Saharan

Africa

*Statistics calculated from IHS onshore rifted basin areas.

Kalahari

Etosha

Congo

Taoudeni

Hasi

Messaoud

Ghadames

Murzuq

Strongly asymmetric

resource distribution -

North and South

Remaining

Produced

Source: Basin Resources (IHS, 2013); Depth to basement (E.D. Purdy – Exploration Fabric of Africa)

12

The Congo: 1.2m km2

of unexplored basin

H7

H6 H5

H4

H3

H2 Infra-Cambrian

Carbonate/Evaporite

Jurassic Stanleyville

Ordovician Alolo shale

Samba (TD 2039m) Depth

(Approx.) TWT

2 km

4 km

6 km

8 km

Depth (Approx.)

TWT

2 km

4 km

6 km

8 km

Carbonate H2

H4

H6

H7

H3

H5

H6 Base Jurassic Unconformity

H5 Hercynian Unconformity (Late Paleozoic)

H4 Pan-African Unconformity (Early-Mid Paleozoic)

H3 Early Pan-African Unconformity (Late Precambrian-Early Cambrian)

13 Modified from: Palaeogeography (Chris Scotese PaleoAtlas, 2009)

540Ma

Reconstruction

Congo Oman

Congo and Oman

Infra-Cambrian

seaways

Oman time equivalent

Ara Gp. petroleum

system

‘U’ shale and

Athel

silicilyte

source

rocks have

delivered

~20bnboe

Congo

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Unexplored rock volume in mature basins

East Texas: >100,000 wells total

Industry 3D seismic data

East Texas: wells below 14,000’

10,000’

20,000’

30,000’

10,000’

20,000’

30,000’

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The Bakken: dramatic reserves growth

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Exploring for ‘reserves growth’…

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Desmoinesian

IHS well completion zones in red

Cleveland

Source: Reservoir Visualization

Inc. Copyright 2013

By exploiting missed pay – a lot of it!

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Source rock (shale) plays

The distribution of shale is known…

…understanding quality is key.

Instead, success will be predicated upon:

− best shale (e.g. Eagleford)

− cheapest operating model

− scientific understanding / technology

− deploying the above internationally

Source: Reuters

Eagleford: drilling, logging and evaluating the type outcrop

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Exploration convergence with EOR

• 1200 bnboe remaining HCIP in Middle

East carbonates

• 300 bnboe HCIP in rest of world

carbonates

• Each 1% EOR increase = 15

bnboe

• Sweet spot identification

key criteria

• 1380 bnboe HCIP globally

in clastics/shales

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Future trends in oil & gas exploration

Resource trends

• Deepwater: T and K deltas; plays explored up from the source rock

• Arctic: ice-bound offshore, Russia is leading

• Re-exploration of the onshore (and shallow water) basins

Needs a new image, or a new idea, or new technology

Onshore frontier basins

Unexplored Rock Volume in established basins

Tight oil in old giants

Shale sweet spots

Convergence with EOR