The technical aspects

Basics of petroleum exploration

Oil and gas are stored in underground reservoirs. A reservoir is a geological formation where gas, oil and water are contained within porous rocks but prohibited from seeping upward towards the surface by a dense cap rock that is impermeable. Figure 2.1 shows a schematic petroleum reservoir. As oil and gas both have lower specific gravity than water, they float on top of water in a reservoir. Petroleum reservoirs can exist from surface seeps to subsurface depths over 4 miles (6.4 km) below sea level. Reservoirs vary from being quite small to covering several thousands of acres, and range in thickness from a few inches to hundreds of feet or more.

Petroleum exploration is about finding oil. This requires geological and geophysical surveys to be carried out to determine the underground geology. Geophysical surveys can be magnetic, gravimetric or seismic, among which seismic surveys are the most expensive and sophisticated. Seismic surveys use vibration (induced by an explosive charge or sound-generating equipment) to provide a picture of subterranean rock formations at depth. This is accomplished by projecting sound waves downward into the Earth’s crust, which reflect off various boundaries between different rock strata. Developments in computer technology have allowed the use of three-dimensional seismic surveys. The recorded data are processed by computer to provide a detailed, three-dimensional picture of the formations and structures below the surface. The process is expensive, in the order of $30,000 per mile (as of 2017). But drilling a well can cost multiple millions of dollars, so time and money spent on accurate seismic surveys can be a good investment, since they help locate prospects and minimize dry holes. However, the only sure way to establish the presence of oil or gas is to drill an exploratory well, called a wildcat.

Once an exploration well has found hydrocarbons, considerable effort will still be required to accurately assess the potential of the discovery. This is called “appraisal” in the industry. The role of appraisal is to provide cost-effective information that will be used for subsequent decisions (development).