11 th african oil & gas conference & exhibition new frontiers of exploration activity 23 -...

23 - 25 May 2007 111th African Oil & Gas Conference & Exhibition

New Frontiers of Exploration Activity

Optimum Application of Geosciencesin the Search for Hydrocarbon in Frontier Basins,

Examples from Sudan

Reservoir Facies

Source Efficiency

Trapping Integrity PLAY

ByDr. Mohamed Zayed Awad

NOT AN OFFICIAL UNCTAD RECORD



Basement Rocks

Cretaceous & Older Sequences

Tertiary & Older sequences

Basin Boundary

Simplified Geological Map of Sudan

MugladBasin



OpportunitiesOpportunitiesWhy has there been so much interest in onshore Sudan?

• Success & profitability

High success rates (69%) Low Exploration Unit Finding Cost ($0.90/b)

• Improved infrastructure More than 300-kilometer long pipelines from Heglig,

Palogue & Fula to Bashyer Marine Terminal in the Red Sea. Three refineries of 130,000 b/d capacity (to be expanded to

200k b/d)

• Contractual arrangements Cost recovery & profit sharing basis (PSC) Encouraging tax & custom exemption

Sudan is providing areas with exciting opportunities for exploration companies of all sizes.



• Engagement of small indigenous companies with smaller capital allows them to partake in oil profits and minimize capital flight

• Localization of projects that facilitated knowledge and technology transfer, which were & remain crucial for better harnessing of local workforce and resources

• Nationalization program is focusing on improving the technical capability and competence levels of the local workforce (80% of two major op. co. nationalized within 5 yrs.)

For the industry to be beneficial to the Sudanese people, the Government formulated policies to ensure localization of all petroleum projects …..

Developing local content Developing local content

Developing people for better resource management



PETROLEUM RESOURCE PETROLEUM RESOURCE ASSESSMENT IN FRONTIER BASINS ASSESSMENT IN FRONTIER BASINS

“DESPITE THE IMPRESSIVENESS OF FANCY ECONOMIC AND ENGINEERING ANALYSES, THE BIGGEST FACTOR IN THE POSSIBLE PAYOFF OF A PROSPECT OR A PLAY IS THE GEOLOGICAL, JUDGMENTAL ESTIMATION OF HYDROCARBON VOLUME AND RISK”

-- David A. White (1993)



Explorationists are not concerned about whether hydrocarbons are present or not in the prospect, rather they want to know the chance of finding a sufficient quantities of petroleum to warrant completion of the drilled well. They also think of “if a well is completed, how much profit will it generate?”

Risk and Volumetric



To quantify the unknown (uncertainty)

Why Do Risk Analysis?:

Prerequisites of Risk Analysis:

To forecast or predict events yet to come

To compare alternative investments

Before one goes into risk analysis, it is important to assess potential outcomes and their values.

Before one goes into risk analysis, it is important to assess potential outcomes and their values.

Define investment opportunities (outcomes)

Seek expert opinion

Knowledge of principles of probability and statistics

Historical data or analogy



Economic Analysis

(Cash flow Model & Value Matrix, NPV, EV;

Fiscal terms, Tax)

Economic Analysis


Fiscal terms, Tax)

DECISION

Mean Resource Volume

(=EV= Revenue)

Mean Resource Volume

(=EV= Revenue)

Engineering Facility cost,

Production profile,Recover Factor


Production profile,Recover Factor Risk &

Sensitivity Analysis

Economic Assumptions

• Price• Cost Escalation• Inflation• Exchange Rate

Economic Results

• Economic Indicators

Assessment of Geol. Elements

SourcereservoirTrap/ SealTiming



EVALUATION PROCESS FLOW



HC Resource Assessment in Virgin Basins“Look-alike Approach”

Comparison has to be made on basis of examination of the key factors that are favorable for the generation and accumulation of commercial quantities of hydrocarbon .

Three main factors have to be considered in searching for analogy:

1. Tectonic evolution, basin geometry & size, 2. Sedimentation style and,3. The Geothermal history

These factors have control on the presence and effectiveness of the petroleum geological elements are processes



Step-by-Step Resource Assessment in Virgin Basins

“Look-alike Approach”

STEP #1: Look for, and choose a mature basin that is comparable or similar to the virgin basin under investigation,

STEP #2: Generate a frequency, and thereafter a filed size distribution diagram from the discovered fields in the mature basin,

STEP #3: Work out the mean reserves from the field size distribution of the analogous mature basin (Muglad Basin)

STEP #4: Use the “Prospect Size Distribution Table” to find out the expected mean HC resource from virgin basin under investigation,



EGYPT

CENTRAL AFRICAN RIFT SYSTEMCENTRAL AFRICAN RIFT SYSTEM

MUGLAD BASIN BLOCK 2A

TALIH

FIELD

UNITY FIELD

May-25

Bamboo

Tayib

RihanLaloba

BarkiHamra

Kanga

El Ghazal

TOMA SOUTH

El Nar (U6)

El Saqr(U7)

El Harr(U8)

Kaikang-1

KuocNor

Nyang

Amal-1

Jak

RED

SE

A

BLOCK 4

BLOCK 1A

ELTOOR

TOMAR

Kaikang-2

HEGLIG FIELD

Jidian

FIELD

Jamousse

Sadeeq

El Mahafir

Amal Updip(K25)

Umm Saqura (U14)

Malok(K9)K5

El Majak

Bamboo South

NH12

El Toor N

El Toor E

Munga Cent.WU5

Khairat E

KS1b(Tamur-1)

Shammam-1(Drilling)

KN15

KN20(Timsah-1)

KN23

KN1



BASIN TECTONICS & BASIN TECTONICS & PETROLEUM SYSTEMPETROLEUM SYSTEM

Rifting

Cretaceous System

Tertiary System

Rif

t C

ycl

es

Sagging

Rifting

Sagging

Rifting

Sagging

S R C T M



Sedimentation Style



0

5

10

15

20

25

MG MGS KNE MGN UBS ETSE FH ETN KHN KHW ESS ETE PA PD KHE USS PJ UBN YAR

Example of field size distribution of discovered reserves“Look-alike Approach”

Typical lognormal distribution



P90

P1

P10

P50

P99

Muglad Basin Field Size Distribution

1 10 100 1000Potential Reserves (MMBO)

0.1

P80P70

Mean = 54 MMBO



The overall mean reserves from lognornmal distribution of the analog (Muglad Basin) is 5.4 X 10 million bbl, and our assessment minimum were 1.0 x 10, we could run down the “Mean” column of Table above until we hit the closest number to 5.4, which is 5.39. The selected distribution would be (1 - 4.47 – 20) X 10. Therefore the mean resource volume to be used for economic assessment & decision analysis would be 45 million bbl.

Mean HC Resource Assessment in Virgin Basins“Look-alike Approach”

Example of estimating future field size of the virgin basin under consideration using the Muglad Baisn as “ANALOG”

X 10



Economic Analysis


Fiscal terms, Tax)

Economic Analysis


Fiscal terms, Tax)

DECISION

45 MMBO45 MMBO


Production profile,Recover Factor


Production profile,Recover Factor Risk &

Sensitivity Analysis

Economic Assumptions

• Price• Cost Escalation• Inflation• Exchange Rate

Economic Results

• Economic Indicators





EVALUATION PROCESS FLOW IN OIL & GAS PROJECTS



P90

P1

P10

P50

P99

Muglad Basin Field Size Distribution

1 10 100 1000Potential Reserves (MMBO)

0.1

SmallFields

SmallFields

MediumFields

MediumFields

LargeFields

LargeFields

P80P70



Chance node (= nature dictates)

Decision node (= decision maker dictates)

Buy Acreage

Don’t buy

Small Field

Medium Field

Large Field

No Commercial Discovery

POS

POS

POSPOF



الشكر لكماالستماع حســـن على

الشكر لكماالستماع حســـن على



Reservoir Facies

Source Efficiency

Trapping Integrity PLAY

SOURCEIs there oil in the

basin?

SOURCEIs there oil in the

basin?

TRAP/ SEALIs there a place to

collect it?

TRAP/ SEALIs there a place to

collect it?

RESERVOIRPorous rock that

can hold?

RESERVOIRPorous rock that

can hold?

TIMINGTrap formation

vs. Generation?

TIMINGTrap formation

vs. Generation?

PLAY CONCEPT

Probability ofSuccessProbability ofSuccess

11 th african oil & gas conference & exhibition new frontiers of exploration activity 23 -...

Documents

exploration companies

oil profits

volumetric slide

low exploration unit

official unctad record

onshore sudan

petroleum projects

frontier basins