Untitled - Treccani

Transcription

Untitled - Treccani

Oil exploration and production
Historical background
of the oil industry
The birth of the oil industry
The photograph par excellence, the symbolic photo
of the oil industry, is that of Edwin Laurentine Drake
with a rudimentary drilling plant in the background
(Fig. 1).
It was indeed Drake, a would-be speculator, and
a former railway worker, who marked the start
of the industrial oil era when, on 27 August 1859,
in Titusville (Pennsylvania), he drilled down to a depth
of about 25 m with his rig, although the accumulation
discovered by him was a modest one, able to produce
no more than about twenty barrels a day.
Hydrocarbons were in actual fact known and had
already been used for a long time, but it was not until
that initiative of Drake’s that a modern technical and
economic approach commenced, enabling us to speak
of an oil industry.
The waterproofing properties of asphalt were
already known in antiquity. Remaining traces bear
witness to its fairly widespread use for cisterns and
sailing craft. The Chinese, who moreover used
bituminous products rationally 3,000 years ago, were
pioneers in the field of drilling and transport, boring
wells some hundreds of metres deep applying
advanced technologies, and transporting gas in
bamboo pipes.
A knowledge of hydrocarbons and some form of
their use by Mediterranean and Near Eastern peoples
are spoken about in Genesis and other books of the
Bible, in which there are many references to oil and its
derivatives. And in Herodotus’ History we find
information of a certain interest, for example when he
reports some rudimentary methods applied in
Mesopotamia for separating and transporting
hydrocarbons.
VOLUME I / EXPLORATION, PRODUCTION AND TRANSPORT
An area that has always been famous for its
striking surface shows of hydrocarbons is the Caspian
Sea, where in ancient times a cult developed that
worshipped the fires released by the emission of gas.
There are more detailed accounts dating from the
Middle Ages, such as that of Marco Polo who in his
Travels speaks of the trade in petroleum products in
the area of nowadays Azerbaijan.
Fig. 1. E.L. Drake’s derrick in Titusville,
Pennsylvania, 1859 (Bettmann-Corbis/Contrasto).
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In pre-Columbian times in America, various ethnic
groups knew about the waterproofing properties of
petroleum, also in their case used above all for tarring
the hulls of sailing craft.
Coming now to more recent times, there are far
more testimonies of the knowledge and use of
hydrocarbons, in Eastern Europe (especially in Galicia,
where oil had been used since the Sixteenth century for
medicinal purposes and for lighting), as well as in
Southeast Asia (in particular in Burma, where already at
the beginning of the Nineteenth century some hundreds
of hand-dug wells and trenches enabled nearly 200,000
barrels a year to be produced), and above all in North
America. Here, around the mid Nineteenth century,
Samuel Kier, from Pittsburgh, marketed so-called rock
oil as a medicine and also tried, but without success, to
sell it as lamp oil. Success instead smiled on a method
of extracting oil from coal and from oil shale patented
in Europe. In those same years a Canadian geologist
patented an analogous process for extracting an oil from
coal, which he called kerosene, granting a licence for it
to various North American industries. Its production
grew rapidly as it could be sold at a price lower than
that of the vegetable and animal oils then available on
the market. This brings us to the eve of Drake’s
enterprise and to the recognition of the great energy
potentials of hydrocarbons. From then on, each of the
countries, in which significant surface occurrences of
hydrocarbons and geological situations suitable for their
exploitation were present, was to follow its own course
in developing production technologies; but it was the
United States that achieved and for long retained preeminence in the sector.
The United States
The United States oil industry, strongly expanding
onwards from 1859, the year of Drake’s exploit,
displayed from the outset the cyclical course that was
to be its characteristic in the years to come: the first oil
boom was interrupted in 1863 through lack of demand,
while in the ensuing two years there was a resumption
of exploration; a second downswing occurred in 1867,
to be followed by another resumption in the years
1868-70. Within just a few years the States of New
York, West Virginia and Ohio became oil producers,
and somewhat later the process extended to California,
Colorado, Tennessee, Wyoming and Kansas. From the
mid Sixties the number of refineries increased in
Pittsburgh, Cleveland and the Atlantic coast, to meet
the pressing market demands. To transport the product
more easily the first oil pipelines were designed, but
were violently opposed by carters and railway workers
who regarded them as dangerous instruments of
competition to the exercising of their activity
(Anderson, 1984).
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Right up to the end of the century the petroleum
product most in demand was kerosene for lighting, and
so the main aim of the oil industry was to refine the
crude oil in order to obtain the maximum possible
quantity, while gasoline and the heavy parts (bitumen
and asphalt) were not exploited. It was necessary to
wait another few years for the advent of motorization,
the consequence of which was a balanced
consumption of all petroleum products.
Already at the end of the Nineteenth century, when
the Russian and Austro-Hungarian empires appeared
on the market, it was United States oil that clearly
dominated the international scene, also because in the
United States product diversification had started,
whereas in European countries consumption was
limited to lighting and lubrication. However, precisely
in the year 1900, the United States whose production
had in a forty-year span increased from Drake’s
memorable 20 barrels a day to 64 million barrels a
year, was exceeded by Russia, whose output that year
reached 76 million barrels. The other producer
countries (the Dutch East Indies, Poland, Romania,
Burma, Japan and Canada) all occupied marginal
positions with respect to the two predominant States.
1900 was also the year of the discovery of the
Spindleton field, at Beaumont in Texas, which ensured
a considerable boost to United States production. From
then on prospecting was stepped up in many States in
the Federation (Montana, New Mexico, Arkansas,
Kansas, California and Oklahoma).
Development was particularly strong in the decade
from 1911 to 1920, when the spread of motorization
shifted oil consumption over to the automobile market
as against that of lighting (in 1911 gasoline passed
kerosene in volume of sales) and the strong upturn in
domestic demand actually made it necessary to import
oil from Mexico, in spite of the extraordinary
productive increases recorded in a number of States
such as Arkansas and Oklahoma (in the decade, thanks
above all to progress in these States, national production
increased from 209 to 443 million barrels a year).
Meanwhile the industrial groups were organizing
themselves in a precise manner and defining their
operational roles, anticipating what was to be the
company structure of the oil corporations in the next
few decades, their objectives and their competences.
Among the first big industrial companies we recall the
Standard Oil Company, which controlled a fair part of
the oil market, but which had to withstand a series of
Federal antitrust measures culminating, in 1911, in the
obligation to wind up the group. New companies were
then registered in the individual States, many of which
retained the name Standard for a certain time, such as
the Standard Oil Company of New Jersey, which
eventually became Exxon.
ENCYCLOPAEDIA OF HYDROCARBONS
OIL EXPLORATION AND PRODUCTION
In the years of the great economic slump (1929-30),
the production glut that was a consequence of a
demand that had dropped clearly below supply levels,
together with other troubles, led to a chaotic situation
in the oil world. It was thus necessary to emanate a
series of federal regulations containing the principles
of management of oil activity, for a more rational
working of the fields. These rules concerned above all
resource conservation, good development practices
and production control.
The Thirties were prolific years for the United
States oil industry. One of the most significant events
was the discovery, at the start of the decade, of the
East Texas Field, the biggest one in the country, with
6 billion barrels. In that period avant-garde
technologies were also developed (Anderson, 1984).
In the exploration sector operations relating to electric
logging, magnetometry and above all reflection
seismic survey became consolidated. In the drilling
sector, drilling guns, Blowout Preventers (BOP), the
tricone (three-cone bit), and semi-submersible drilling
rigs came into use. And in the transport field, oil
pipelines able to transport different fluids
simultaneously appeared. Some of these
improvements were patented by the oil companies
themselves, while others were devised by the service
companies (contractors) then undergoing rapid
growth (some of them are still active, such as
Halliburton, Hughes, Schlumberger, Baroid and
Dresser). In the following pages, a general framework
of the early stages of oil industry will be offered,
using information from a work of great interest
(Owen, 1975).
Russia
Russia is the country that at the start of the 20th
century, applying different operating modalities, had
passed the United States in oil production.
Already in 1847, a dozen years before Drake’s
initiative, the Russian government had had a well
drilled in Azerbaijan (for some time then forming part
of the Tzarist empire) in the area of what was later to
become the Bibi Eybat field, close to Baku. But not
until 1871 was a first oil well completed. This took
place in a context in which the oil industry was
regarded as a merely extractive mining activity,
exercised in a rudimentary fashion with hand-dug
trenches and wells.
The first real impetus to oil activity in the Baku
area was provided by two Swedes who had immigrated
there in 1875, Robert and Ludwig Nobel, brothers of
the scientist who invented dynamite and established
the prize that bears his name. To them were due the
first real oil operations: the acquisition in 1877 of the
Balakhany field and after that other oil fields, the
construction of the first refinery, the first oil pipeline
and the first oil tanker. They were also the first, in
1885, to employ a geologist, the Swede Hjalmar
Sjögren, as a permanent consultant.
A second important stage was the entry into the
petroleum sector of the Rothschild family, who in
1892 set up the Société Caspienne et de la Mer Noire,
the aim being to supply petroleum products to the
territories of the Austro-Hungarian Empire. At first
barges were used, plying the Volga and other Russian
rivers, and later oil pipelines and railways were built,
reaching the shores of the Black Sea.
Russian production rose from 34.5 million barrels
in 1891 to 85 million in 1901 (already in the previous
year, as observed, this had surpassed United States
production). About three-quarters of the output was
marketed within the country.
In the Caspian region the Russian General Oil
Corporation had already been established. Royal
Dutch-Shell entered the Baku area in 1911 and the
following year it bought up the Rothschild’s company.
In 1914 production stood at 65 million barrels, but
in the next few years it started going down, dropping
to a mere 25 million barrels in 1920, for various
reasons, both technical (low productivity, inadequate
drilling methods, distance of the fields from the areas
of consumption) and administrative (the type of
concessions); but above all the country’s participation
in the First World War and the events of the Soviet
revolution had a negative influence.
The new nationalized economy was characterized
by the well-known five-year plans. The first of them
(1928-32) led to widespread mechanization, the
consequence of which was an appreciable increase in
the demand for hydrocarbons, accentuating the
importance of the oil industry and centralizing its
organizational structure, goals and investments. The
resumption of drilling activity and the reopening of
old fields enabled production to recover (64 million
barrels in 1926 and 84.7 in 1928), even though the
technologies applied in exploration remained quite
rudimentary, still being based on geophysical methods
of gravimetric and magnetic type. Refraction seismic
survey was applied for the first time in 1929 in
Chechnya, in the Groznyj area, while the intensive use
of electrical prospecting was started the previous year.
Magnetotelluric methods and natural electric currents
were widely applied to define the basement or
formations with a different resistivity. Refraction
seismic surveys properly so termed were introduced by
Gamburtsev in 1939, in the Bashkiria Republic, to
define a number of shallow structures.
In the second five-year plan (1933-37) drilling,
mining and refining techniques were improved, but
certain limiting conditions persisted, such as the
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shortage of steel for infrastructure, and obsolete
equipment which did not allow production tests to be
run at deep levels. Furthermore, the exploration of
new areas had not yet started (in 1932 the annual
output was 156 million barrels, still coming very
largely from the Azerbaijan fields). In those years the
contribution of hydrocarbons to the Soviet energy
balance was barely 15%.
The ensuing five-year plans coincided with
industrial growth and at all events led to a gradual
increase in the oil industry: 690 million barrels of oil
and 20 billion m3 of gas were produced in 1958.
The relaunch of exploration in new areas came
about thanks to the persistent pressure of Ivan
Mikhajlovich Gubkin, one of the great figures in
Soviet petroleum history and one of the very few
geologists who had visited the oil fields in the United
States. It was due to him that exploration was
undertaken in the early Forties in the Volga-Ural basin,
which proved to contain fields with huge reserves, to
the point of being called the ‘Second Baku’. The first
discoveries made in this basin, in reservoir of
Devonian age, characterized by different production
parameters from those traditionally known, persuaded
the authorities to invest very large sums also outside of
the Caspian area. Systematic surveys were started (as
many as 350 seismic teams and 700 geophysical teams
were operating in Soviet territory) and exploration
started in western Siberia, in Kazakhstan (Mangyshlak)
and on the island of Sakhalin. Drilling activity
increased considerably, too, but the wells remained
rather shallow: according to Soviet terminology deep
wells were ones that went down to around 2,000 m,
and thus very different from the wells considered deep
in the United States, of around 4,500 metres.
It was only after 1957 that the reorganization of the
Soviet system in the petroleum sector delegated
institutions and industries to carry out autonomous
programmes of exploration. However, the result was
not brilliant as the competition among the various
agencies, ministries and institutes and the uncertain
definition of competences between preliminary
and detailed exploration made the process complicated
and costly.
The work done in this period, among the many
personages who have remained in the shadows, by
P.Y. Antropov, a petroleum geologist and Minister for
Geological Exploration of Hydrocarbons, deserves
mention. The start-up of exploration in western Siberia
was due to him. The results obtained in the Siberian
area were very successful: with 32 fields discovered
and 8 authentic giants, it was rightly dubbed the
‘Third Baku’.
Reflection seismic survey, although applied in
regional surveys, was 20 to 25 years behind the times
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compared with what had been done in the United
States. Its poor technological content in terms of
recording and processing seismic data was reflected in
the difficulty of interpreting complex geological
situations.
East European countries
In Romania at the end of the Nineteenth century
hydrocarbons were produced in a rudimentary manner
with hand-dug trenches and wells. On the basis of the
oil produced in 1895 a refinery was built, financed by
the Hungarian Bank, and subsequently reorganized by
the Deutsche Bank within the framework of German
production.
At the turn of the following century a number of
foreign investors were already present. Apart from
Standard Oil, particular importance attached to the
entry into the country of Royal Dutch-Shell, which in
1907 boasted of an output of 250,000 barrels of oil. In
1910, the global production of 9.7 million barrels and
the activity of 547 hand-dug wells, 819 drilled wells
and 244 wells being drilled, made the Romanian oil
industry one of the most efficient ones, with the
majority of its production coming from the Pliocene
sands of the Ploesti area.
should also be made of AustroSpecial mention
Hungarian Galicia, a region nowadays hared between
Poland and Ukraine, with its 631,000 barrels already
in 1891 and its peak output, in 1909, of as much as
13 million barrels.
Southeast Asia
In 1891 Burmese oil fields produced 200,000
barrels, which by 1910 had risen to 6 million. The
Yenangyaung field, known since Antiquity, was
worked by the native population with extremely
rudimentary methods, digging trenches and wells by
hand. In 1887 the Burmah Oil Company, in which
British capital accounted for the majority share, started
drilling wells mechanically: in 1905 a first production
test was performed, resulting in 12,500 barrels/day.
In the Dutch East Indies, the territory colonized by
Holland corresponding to present-day Indonesia,
activity started with the Royal Dutch Company in
1890. In northern Sumatra the Dutch company carried
out some accurate geological surveys in an area where
since 1895 a number of shallow wells had been sunk
in the vicinity of surface indications. In 1898 the first
wells were drilled for commercial production. In 1911
the total production of the Dutch East Indies, more
than one-third of it from the eastern part of Borneo,
was 12 million barrels, rising in 1920 to 20 million,
placing the country in the fourth position in the world,
after the United States, Russia and Mexico. There was
considerable development during the Thirties and in
1940 production reached 65 million barrels (still
fourth, after the United States, the Soviet Union and
Venezuela).
Latin America
In Mexico surface indications were observed as
early as the Sixteenth century and there was legislation
for the mining industry as from 1884. However, it was
necessary to wait until the opening decade of the
Twentieth century for any systematic exploration to be
started (by Charles Canfield and Edward Doheny of
the United States in the Tampico area), which then led
to the discovery of immense reserves concentrated in
the two areas called Northern Fields and Golden Lane.
Annual production, standing at 100,000 barrels in the
early part of the century, had risen to 3.6 million
barrels by 1910 and, in spite of a decade of political
instability, to as much as 193 million in 1921.
Still in 1910 (the year in which production was
500,000 barrels) Venezuela was not regarded as a big
oil province, although the large asphalt deposits in the
Orinoco region, for long known, had formed the target
for various surveys by geologists stationed on the
island of Trinidad. Only in the mid Twenties, with the
finds made by Shell and the intense activity of the
United States companies (which controlled more than
50% of production, with the companies issued from
the Standard Oil Company in the forefront) did
reserves increase from 400 to 900 million barrels.
British. A consortium was formed in 1912 among the
Deutsche Bank, the Anglo-Persian Oil Company and
Royal Dutch-Shell, to obtain a concession to develop
the oil resources. Two years later the Turkish
Petroleum Company came into being (eventually
taking the name of the Iraq Petroleum Company in
1929). After the First World War, the Deutsche Bank’s
share was bought up by the French. In 1927 the Kirkuk
field was discovered, and from the very outset it
confirmed the noteworthy oil potential of the
Mesopotamian area. The immediate consequence of
such an interesting result was the pressure put on by
United States companies, wanting to participate in
exploiting Iraqi resources. In 1928 a consortium
formed by these companies obtained a 23% share.
In Saudi Arabia, in the other countries of the
Arabian peninsula and in the islands of the Persian
Gulf, oil activities proceeded in parallel fashion. In the
beginning of the Twenties, Frank Holmes, a New
Zealand mining engineer that believed in the mining
potentials of the region, managed to sign a series of
agreements relating to oil prospecting in Saudi Arabia,
Kuwait and Bahrein. With the financial backing of
Standard Oil of California – now Chevron – the first
wells were sunk, and positive results were obtained in
the Bahrein islands in 1931-32. In 1935 the first signs
appeared of what turned out to be the discovery of the
Saudi field at Ghawar (1948), which was to finally
establish Saudi Arabia as one of the countries having
the largest oil resources.
The Middle East
It is curious that the Middle East, which contains
the largest reserves on the planet, did not form the
object of industrial activity with any appreciable results
until very late in the day, well into the Twentieth
century. The start of the Middle Eastern oil history can
be pinpointed as 1901, when the Briton William Knox
d’Arcy obtained directly from the Shah of Persia a
concession for sixty years to explore an extraordinarily
extensive area. After various ups and downs, in 1908
the Masjed-e Soleyman field was discovered.
Management of this field was subsequently assigned to
the Anglo-Persian Oil Company, controlled by the
British government. Following geological studies and a
resumption of exploration in 1925 (applying
geophysical methods, with refraction and reflection
seismic survey playing an important role) the field
turned out to be a giant. In the ensuing years
exploration was very intense and annual production
grew rapidly (at the time of the Second World War it
had reached 172 million barrels/year).
In the Mesopotamian region, coinciding
substantially with modern Iraq, which was part of the
Ottoman Empire, the Germans had acquired a number
of mining rights, entering into competition with the
Emerging countries and national companies
In the years of the Second World War and those
immediately afterwards, a different picture emerged of
the world oil situation, due in part to a series of actions
by the governments of the producer countries aimed at
securing higher revenues, in some cases with the
actual nationalization of the petroleum industry
(Venezuela, 1948; Iran, 1951; Egypt, 1956; Indonesia,
1960). This was the period when the production
situations took on their present form, with traditional
producers claiming more committed roles and new
producers appearing on the international scene. In
reality, in some countries signs of the demand for
greater control over companies and production had
already become manifest, the emblematic case being
that of Mexico, in which indications of this trend were
already included in the 1917 Constitution and where
nationalization was put through in 1938, with grave
consequences for Standard Oil and Shell, and the birth
shortly afterwards (in 1940) of Petroleos Mexicanos
(Pemex) which took over ownership of the resources
and management of all oil activities.
In Venezuela, where for some time relations
between the government and the companies had grown
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worse because of the increase in the royalties asked for
the new concessions, a law was promulgated in 1948
imposing a 50/50 sharing of oil profits between
government and companies. Some concessions
continued to be granted, but in 1958 there was a
further increase in royalties up to 66-67% for the
government. In 1976 foreign companies were
nationalized and ownership of them was transferred to
Venezuelan companies.
The Middle East situation is more complex. Already
in 1932 Persia had cancelled its agreement with the
Anglo-Persian Oil Company, and in 1951 the Prime
Minister, Mossadeq, nationalized the petroleum
industry, setting up the National Iranian Oil Company.
However, it was not until the Sixties and the setting up
of OPEC (Organization of Petroleum Exporting
Countries) that the negotiating potential of the Arab
producer countries was fully used. OPEC, established to
exercise price controls and to increase the oil revenues
of the producer countries, was at first formed by five
countries, four of them in the Middle East (Iran, Iraq,
Kuwait and Saudi Arabia), and the fifth one being
Venezuela. Qatar joined in 1961, Indonesia in 1962,
Libya in 1966, the United Arab Emirates in 1967,
Algeria in 1969 and Nigeria in 1971. Ecuador, which
joined in 1973, left it in 1992, and Gabon did likewise,
joining in 1975 and leaving it twenty years later.
Africa, which in the preceding decades had played
a marginal role in the oil market, attained considerable
levels of output in the Sixties. Egypt, for long the sole
African producer, reached 10 million barrels in 1948,
and it was not until the end of the Fifties that its
production started to reach industrial levels.
Subsequently it was joined by Libya, Algeria and
Nigeria, and later by Angola, Congo and Gabon.
In Libya it was not until 1954-55 that important oil
production activity started, with the assignment of the
first concessions to Shell, Total, Esso, Mobil, BP,
Oasis, Continental and Amerada. The first finds took
place in 1959 and continued in the early Sixties. With
the second series of assignments of mining
concessions, the areas of interest were confirmed,
followed by the big discoveries at Sirte and in the
Mediterranean. The establishment of the National Oil
Corporation (NOC) in 1971 and the nationalization in
1973 of the holdings of Shell, Texaco and Occidental
reflect the OPEC model of total production control.
In Algeria the first commercial finds date from
1956 when oil was struck at Hassi Messaoud and gas
was found at Hassi R’mel. Petroleum activity in the
country succeeded in keeping going during the War of
Independence, but found goings difficult when
independence had been achieved (1962), due to
uncertainties connected with the new political and
social situation. In 1963 it was decided to nationalize
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all the oil and gas pipelines, and to purchase the local
distribution networks. In the same year the Société
Nationale de Transport et de Commercialisation des
Hydrocarbures (Sonatrach) was created, which in
1971, in accordance with the new petroleum law, took
over full responsibility for all the mining rights in the
country, with the possibility of accepting foreign
partners up to a maximum share of 49%.
Nigeria gained an important position among
producers at the beginning of the Seventies. It was
only in the latter half of the Fifties that an intense
campaign of exploration had been started,
implemented by Mobil, Shell, Tenneco and Agip. The
Nigerian National Petroleum Corporation (NNPC) was
founded in 1971, and the exploration started led to
exciting results. Port Harcourt became an important
centre of operations.
The national companies of the OPEC countries
have played a more and more important role in the
world panorama, at times being associated with
integrated oil companies or obtaining interests in oil
refining and marketing (such is the case of Venezuela
and Kuwait). Alongside the OPEC state companies,
mention should be made of the state companies of
other producer countries, such as Petronas (Malaysia),
Petrobras (Brazil) and others, which in recent years
have shown evidence of great vitality on a
technological as well as on a business basis.
Evolution of petroleum geology
Introduction
Petroleum geology is a branch of applied geology
that aims at recognizing, in a basin, the mechanisms of
formation, migration, accumulation and conservation
of hydrocarbons. To reconstruct this process, the
petroleum geologist uses, apart from the geological
sciences properly so termed (mineralogy, stratigraphy,
petrography, sedimentology, structural geology,
geochemistry, palaeontology, geomorphology and
subsurface geology), also correlated disciplines (fluid
mechanics, physical chemistry).
Petroleum geology, as an operative discipline, has
the main aim of identifying accumulations that are
important from the economic standpoint therefore
using a series of surveys (gravimetric, seismic,
magnetometric) from which to obtain indirect
information for recognizing hydrocarbons (type of
geometries, types of lithology, structures), as no direct
method of recognition exists. The reconstruction that
the geologist makes of the basin on the basis of the
parameters available to him is always a working
hypothesis. No model, however elaborate and based on
advanced technologies, can depict reality. In the
specific case of oil activity, proof of the truth comes
from drilling the well where the samples collected and
analyzed, the lithologies, and the formation fluids,
represent the verification of the hypotheses
formulated. To arrive at complex models such as those
that exist today, the road was a long one (Owen, 1975).
The precursors
In the first half of the Nineteenth century, the
European schools of geology had already produced a
series of ad hoc observations on the distribution of
hydrocarbons in the known oil-bearing areas,
accompanied by coring and analysis, at times of a
systematic nature. In Romania, in Burma and in the
Caspian Sea region, the material supplied was abundant
and the opportunities of study frequent. In the Baku
area, for example, observations on the links between
manifestations of hydrocarbons and the formation of
diapirs, their relations with structure and faults had
provided certain ideas for reflection and some initial
hypotheses on the migration of hydrocarbons. The
German geologist Hermann Wilhelm von Abich and the
Russian chemist Dimitri Mendeleev deserve to be
remembered in this context; in 1839 von Abich observed
the close correlation between mud volcanoes and the fire
linked with the release of gaseous hydrocarbons, while
Mendeleev was one of the first scientists to study the
Caucasus (1877). Both of them were advocates of the
inorganic theory of the origin of oil.
In North America, too, the observations of a
number of scientists and technicians mostly working
in national geological surveys, who had the possibility
of using a mass of precious data and observations,
enabled the first hypotheses to be made on the origin
of oil, on migration, on trap mechanisms and on the
anticline concept. Among the many who would
deserve mention, we can name the Americans Samuel
Prescott Hildreth, who in his reports on the bituminous
deposits in Ohio (1836) was the first one to give a
correct definition of the anticline concept; Henry
Darwin Rogers, of the Pennsylvania Geological
Survey, who in his observations (1858) associated the
origin of oil with coal; and Thomas Sterry Hunt, a
chemical geologist who may be regarded as the first
world authority in the petroleum field. Considerations
of great interest were also made by Alexander Murray,
of the Canadian Geological Survey, who studied
(1856) the oil springs of Enniskillen in Ontario,
originated by bituminous schists, and at the same time
laid the foundations for an adequate industrial
exploitation of the area.
The years of formation
Geology as a science, in the years immediately
following Drake’s discovery (latter half of the
Nineteenth century), only made a minor contribution
to the oil industry.
The first prospecting was carried out close to the
areas where seepages occurred, or actually where
mining had already started. Prospectors and
wildcatters with a modest knowledge of the subject
went out into the adjoining areas, but adopted criteria
not exactly rigorous scientifically speaking. Moreover,
in academic circles Drake’s initiative was not greeted
with much enthusiasm.
The oil fields and showings of hydrocarbons in
Europe were known through the literature and the
geological reports of Henry Darwin Rogers and
Alexander Wintchell on source rocks and reservoirs
(1860), which started giving an organic picture of
current knowledge. In those same years, Hunt, going
into the theory of the anticline in the accumulation of
hydrocarbons, anticipated the possibility of lateral
migration (1863). He also developed a hypothesis of
the in situ origin of the oil contained in carbonate
rocks. The American Ebenezer Baldwin Andrews, in
1861 formulated the concept, later taken up by his
fellow-countryman Charles Henry Hitchcock, of
fractures linked with folds, correlating the presence of
oil more with structural discontinuities of the rock
mass than with just the anticlinal structure. An
important step towards the operational use of geology
was taken with the mapping of geological formations.
The structure-contour map, drawn up on behalf of the
Indian government by Benjamin Smith Lyman in 1870,
represents the first attempt at geological mapping.
At the end of the Sixties of the Nineteenth century,
the United States knew only a number of basic
concepts of petroleum geology: the animal or
vegetable origin of hydrocarbons, the generation of
carbonate or argillaceous source rocks, transformation
by decomposition or distillation, reservoirs as fissured
rocks, cover provided by clays, vertical and at times
lateral migrations, and anticlines accepted more or less
generally as the main accumulation mechanism.
The anticline theory was taken up again in the years
1883-89 by J.C. White: wrongly considered to be the
father of this theory, he was at all events the first one
to apply it successfully in prospecting for gas, which
in that period was in considerable commercial demand.
In the period 1891-1910, European geologists paid
more attention than American geologists to aspects
regarding the origin and migration of oil. French,
Polish and Romanian geologists made significant
contributions in a context that was fertile at academic
level. In the works of Franz Posepny on Poland, on
Romania and on the Caspian area (1871), for the first
time salt domes are explained as extrusions of deeper
saline beds. Also Hans Hofer had the merit in 1876 of
bringing United States knowledge to European circles
9
and of enabling German-speaking scientists to
reinterpret the Carpathian area on a more modern
petroliferous basis. While in Germany, the ideal place
for the study of salt domes and diapiric folds,
scientific contributions about oil were scanty, for the
Caspian area, the oil-bearing region par excellence, the
studies of the Swede Hjalmar Sjögren published in
1885 are worthy of note. The first geologist to be
employed by an oil industry, Sjögren was more
inclined to emphasize structural alignment in the
distribution of accumulations of hydrocarbons than the
anticlinal mechanism.
Moreover, in the United States a very practical
method of prospecting, besides the anticlinal one, was
that of belt or of potential oil accumulations
distributed along preferential belts: a rather rough
method, which however responded to geological
criteria of homogeneous trend from a stratigraphic and
structural point of view. Approaches of a more
scientific character, particularly useful for prospecting,
are due to John Franklin Carll and Edward Orton.
Carll, of the Pennsylvania Geological Survey, was
the first one (1875-80) who tried to construct a complex
sedimentary model taking into account surface
observations and subsurface data, and establishing
stratigraphic correlations between wells. His was
a first attempt to visualize formations with
a three-dimensional geometric representation. In his
elaboration, stratigraphy is much more important than
the structural aspect in the distribution of
hydrocarbons. The systematic description of the data
collected gave rise to a new working method.
Another contribution of great interest is that of
Edward Orton in 1886-87, which contains interesting
observations on the origin, accumulation and belt
distribution of hydrocarbons, accompanied by a map
of the roof of the Trenton Limestone formation, the
first one of its sort published by a United States
geological survey.
Although studies of petroleum geology in Europe
were far more rigorous than in the United States, they
were short lived, whereas in the United States, with the
discovery of fields of considerable size, the sector
received a great boost. The oil industry started
systematically asking for detailed surface maps, cores
and new systems of classifying the data.
It should be borne in mind that in that period a
good part of the deposits were located in Tertiary
terrain of anticlinal structure, close to seepages, as in
Burma, in Romania and in some parts of Russia. There
were few structural situations without such
occurrences which were recommended for drilling.
Exploration suffered from the lack of structural maps
and geological surveys on a regional basis. The
geologist’s work therefore consisted in mapping
10
anticlines near oil showings, and when the well went
through deeper layers and with a different tectonic
style from that of the cover terrains, some problems
arose as to interpretation. Where the deposits were
linked with unitary sequences affected by only a single
deformation phase, the surface survey could be
satisfactory, but when it was a question of tackling
deep levels with different structural characteristics
from the cover, that method was no longer sufficient.
It was therefore necessary to outline a 3D model.
Surface geology made enormous progress in Romania
and California onwards from 1910, and in fact after a
few years it became one of Shell’s working
methodologies.
As far as the employment of geologists in the
petroleum industry is concerned, some, mostly
European, companies (Royal Dutch-Shell in Burma as
from 1898, then the Anglo-Persian in the Middle
Eastern countries, the Nobels in Russia, the Deutsche
Bank in Romania and Poland, and Aguila in Mexico)
had already formed their staffs of geologists. But the
first consulting companies had also been started
(Boverton Redwood, Beeby Thompson) which had
earned some degree of credit with the companies, even
though their surveys were sporadic and rather
superficial. Only two United States companies used
full-time geologists before 1900, and eight of them
had a permanent staff by 1913. In reality, in this phase,
the geologist was employed more for following field
development and extension works than on exploration
properly so termed. However, Shell had a permanent
central geology department onwards from 1913 and
made systematic use of geology in its operational
activities.
The Thirties and geophysics
The real quality leap in exploration came with
geophysical surveys, and seismic surveys in particular.
The geophysical survey has proved to be the most
useful prospecting technique in oil exploration, even
though at first this did not lead to abandoning the
other prospecting techniques and has not completely
replaced them.
The geophysical survey originally adopted costly
methods and required a certain amount of
programming, apart from choice of the specific areas
to be surveyed: all elements that small-scale operators
were not in a position to contemplate in view of the
limited number of areas available and the modest size
of their concessions.
The first geophysical applications for oil and gas
exploration were carried out, in a period prior to the
First World War, in Romania and Bohemia on salt
domes, and were based essentially on the
magneto-gravimeters designed by the Hungarian
Roland Eotvos. In any case geophysical exploration
achieved its first great result in 1924, when thanks to
the torsion balance and refraction seismographs, the
salt domes of the Gulf Coast were identified.
The seismic refraction method has its roots in the
work of the Canadian Reginald Fessenden for the
definition of the seabed (1913), but the first attempts
to apply it to oil exploration are due to John C.
Karcher who, in the Twenties, demonstrated in
Oklahoma the possibility of its application in oil
prospecting. In 1927 the reflection seismic survey was
already regarded as a routine method, and then in 1930
it became the most used one, and was decisive in
finding hydrocarbons. Initially this method was not
fully used due both to the economic slump and the
cost of operations, and to the trend of the oil market
which did not seem to justify the use of these
techniques. But as from the second half of the Thirties
there was a clear-cut prevalence of discoveries made
thanks to seismic rather than traditional techniques,
which however went on making their contribution (in
1938, for example, in the United States 31 finds were
made by the seismic method versus 6 thanks to
traditional methods). In the same period (1933)
electric logs (spontaneous potential and resistivity)
came into common use in 1936.
While in the Thirties the big corporations already
existed and technology was being developed in
exploration (e-logs, gravimetry, magnetometry,
seismic surveys), drilling and production, in the
ensuing years seismic campaigns were conducted in a
systematic and intensive manner. In 1952 a large
number of seismic teams (8,000 teams/month) were at
work in the United States.
Bearing out the validity of this method, a good part
of the very large fields (giants) in the United States
were discovered by 1945, and 89% of them by 1955,
when the effects of seismic surveys made themselves
felt at industrial level. Only in 1953 was taperecording apparatus introduced on the market,
enabling a number of recordings to be summated, and
weaker sources to be used; while in 1956 the multicover method was invented, whereby the rate of
propagation of seismic waves could be determined.
With the commercial advent of digital recording in
1963, great development took place in seismic data
collection and processing, thanks above all to more
and more sophisticated electronic processors able to
analyze a considerable volume of data. The period
following the Second World War (1946-57) marks the
extraordinary development of subsoil geology with a
large number of geologists engaged in monitoring
drilled wells, providing a conspicuous mass of
information on the areas explored (sedimentological,
palynological, stratigraphic and petrophysical data).
With the support of the new information many areas
thought to be mature were reconsidered and
sometimes their hitherto ignored sedimentary
characteristics were evidenced, or even new geological
models were drawn up, reassessing deeper objectives
that had earlier been unknown. Onwards from the
Seventies a start was made on exploring the
continental shelf, witnessing the unquestioned triumph
of the seismic.
The present time
In the last few decades continuous improvements
have taken place in technologies related to exploration,
from logs (acoustic, sonic, radioactive) to recording
techniques during drilling. In-well data processing,
together with the development of information
technology, has made it possible to supply a great
quantity of data. Above all seismic, with the
introduction of 3D surveying techniques, has led to the
acquisition of a remarkable volume of data. Although
the first 3D seismic survey was conducted about 40
years ago, it is only in the last fifteen years that this
technique has become an instrument in common use.
At the same time there has been an evolution in
information technology (software and hardware for
acquiring, processing and interpreting the data in the
most efficient way possible). The information obtained
with a survey of this type constitutes a volume that
may be represented both in vertical sections, as in
traditional surveys, and in horizontal sections (time
slices) at a selected time, or again in virtual vertical
sections, which run through the wells present in the
area. Since the mid Eighties, with Shell the pioneer
company, the practice has been spreading in the oil
industry of acquiring 3D surveys of very extensive
areas, especially in marine surveys, at the beginning of
the exploration cycle. For deep-water projects,
currently all oil companies start on the exploration
phase with a 3D survey. The main benefits obtained
from this working choice are a greater geometric
reconstruction of the subsurface and the possibility of
using seismic data for predicting the presence of
hydrocarbons in the subsurface. This means a better
evaluation of the potential of the area and, above all, a
shortening of the petroleum exploration and
production cycle, as the seismic survey itself is used
both for exploration and for development, with the
consequent reduction in times and costs in the event of
a find.
Regarding the probability of mining success, too,
the choice of the 3D survey translates into a better
ratio between hydrocarbon-bearing wells and the total
number of wells drilled.
For an improved use of 3D seismic, innovative 3D
geological modelling technologies have been
11
elaborated, making it possible not only to reconstruct
the present characteristics of the basin, but also the
petroliferous evolution thereof. By now there is no
difficulty in inserting all the observations relating to
faults and fractures at every scale, from that of the
exposure to the well seismic, in deterministic and
probabilistic models (fracture fields) which enable
wells to be located rationally.
Lastly, downstream of these elaborations, the use is
being consolidated of new integrated geologicalgeophysical interpretation techniques (gravimetry,
magnetometry and seismic) of 3D seismic volumes
that enable a quick definition of the sedimentary
bodies concerned to be obtained, on which to carry out
specific analyses or even obtain more detailed
petrophysical characteristics, if it turns out to be a
hydrocarbon-bearing deposit (field). These
technologies provide the geologist with a quantity of
information that has to be inserted in an interpretative
model in which all the components of the basin can be
coherently explained (maturation process, expulsion
and migration of hydrocarbons) in order to achieve the
definition of the traps present and of the possible
loading of the fluids through preferential migration
paths. In other words, quoting Wallace E. Pratt, «oil is
in the human mind» and technology is only one of the
ways to find it (Pratt, 1937, 1944).
Cycles of exploration and discovery
The typology of an exploration and discovery cycle
12
100
90
80
$ 2003
$ money of the day
70
60
50
2000-03
1990-99
1980-89
1970-79
1960-69
1950-59
1940-49
1930-39
1920-29
1910-19
1900-09
1890-99
1880-89
30
20
10
0
1870-79
40
1861-69
Fig. 2. Evolution of oil
prices (1861-2003)
(BP, 2003).
price (US dollars per barrel)
The exploration process is framed in a broader
context of exploration, development, production and
marketing of petroleum products, which are followed
by abandonment and the environmental restoration of
the sites or of the offshore areas used for development
of the field when the latter is exhausted.
The average times of the first period of an
exploration permit are around four years, during which
the foreseen seismic and drilling surveys are
performed and, usually, if a positive result is reached,
the first hydrocarbons discovery is made.
In the economy of an oil project, the time between
the discovery and the start-up of production of a field
is of great importance. This time span affects the
economic return on the investment, as the profitability
of the project is greater if recovery times for the
money are short. First and foremost, as already
mentioned, to bring a discovery well into production it
is necessary to have an authorization, explained in the
signed agreement (called ‘development lease’).
Within a few months of the discovery of
hydrocarbons, the operator must submit a field
assessment programme to the competent authority and,
within an agreed period, define whether it is a
commercial oil field or just a discovery of no economic
interest. In the first case a development plan has to be
prepared, containing all the technical specifications
necessary to bring the field into production and then
manage the whole process (product transport,
development infrastructure and environmental
protection). Prior to starting any type of activity and
investing in the discovered field, the operator has to
request a development lease in the area containing the
field, which will protect his mining rights.
Before assessing the size of the field by means of a
drilling programme, a detailed seismic survey is often
necessary to determine the location of the offset and
production wells. To make the passage between the
exploration phase and the development phase easier, it
is often useful, from the first exploration phases, to
seek to integrate all the technical measures pertaining
to the study and the subsequent development of the
well, with the objective of reducing costs and
shortening the time between discovery and production.
This is particularly important in deep water
or in remote locations, i.e. when possible delays
in production are very onerous due to the amount
of invested capital.
For this, the example of the Angolan deep-water
area can be taken: here, the Kuito field was put into
production 24 months after the first discovery well.
This period is far less than the average time necessary
to bring a deep-water discovery into production, i.e.
normally five years (forecasts of bringing current
projects into production range from the two years
foreseen for Equatorial Guinea to the nine for
Norway).
Historical cycles
The evolution of the oil industry, from the very
outset, has been characterized by its uneven, cyclical
trend, with peaks of activity followed by sometimes
traumatic standstills. In the United States already in
the very earliest years of the petroleum era a series of
fluctuations occurred, both positive (1861-63, 1864-65,
1868-70) and negative (1863, 1866-67), due to an
excess or shortage of supply. The dependence of
activity on the trend of prices is a constant of the oil
market, which in its turn conditions the occurrence of
political and economic crises (Fig. 2 shows the
evolution of prices from the very birth of the oil
industry). A number of significant facts are recalled
in particular: a) 1973: the Arab-Israeli war with the
consequent embargo against pro-Israeli countries and
increases in price from 3 to 12 dollars per barrel;
b) 1979: the Iranian revolution followed by the
Iran-Iraq war, with a drop in production and a
substantial increase in prices from 14 dollars in 1978
to 35 in 1981; c) 1985: price slump due to OPEC
policy and to the increase in production by Saudi
Arabia, of as much as 10 dollars per barrel; d) 1991: the
Gulf War, with a price peak linked to the uncertainties
caused by the invasion of Kuwait; e) 1998: economic
crisis in Southeast Asia, with the price per barrel
down to its historical minimum (below 10 dollars).
Apart from the prices, other factors exist bearing
witness to the cyclical trend in exploration activity:
e.g. the number of wells drilled, the investments
effected or the discoveries made. It is clear that a
brusque price drop is generally accompanied by an
immediate squeeze in exploration expenditure and
there is normally a tendency to favour short-term
investments rather than to bank on long-term
projects. There are however moments when relatively
modest price fluctuations correspond to peaks of
activity. In the United States one such peak of
activity occurred in the mid Fifties, with more than
8,000 exploration wells drilled during 1955-56
(Owen, 1975), followed by a regular decline until the
Seventies, when however the number of wells drilled
was more than 3,000. Such an increase is assumed
for the Soviet Union between 1950 and 1958 (when
exploration wells increased from 6,980 to 12,176).
Although the figure for Soviet wells leaves some room
for doubt, it is borne out by the growth trend which led
to a production of 181 million barrels in 1947 to over
1 billion barrels in 1960. It is however sure that
between 1950 and 1965 intense international activity
developed: a fair number of significant fields (giants)
were discovered in the Soviet Union (in Volga-Ural
basin, in the pre-Caspian basin and in the southern
Caspian in the Fifties, while the western Siberian and
Kazakhstan fields date from the early Sixties), in the
Middle East and in North Africa.
The years 1970-1980
After the Yom Kippur War and in the immediately
ensuing years the trend delineated in the oil
exploration sector was one of intense activity. The
major United States oil companies relaunched their
investments in the upstream sector in both the national
and the international market. In those years, in fact,
with the ending of intense onshore exploration, the
target became the conventional waters (down to a
depth of 200 m) and the hitherto impracticable
territories of Alaska. The policy of the major oil
companies tended to develop national reserves and to
pursue internationally highly ambitious objectives in
areas of high risk but with great economic returns. The
exploration started of new areas such as the Gulf of
Mexico, the Arctic, the Andes, the North Sea, the
Shetlands, Yemen, Nigeria and the China offshore
area. This type of strategy, dictated by an attitude
inclined to privileging long-term investments rather
than immediate dividends, depended not just on the
level of prices, but also on the fact that in the mature
basins discoveries proved to be of modest size and at
relatively high costs. Furthermore in these years
technology evolved rapidly.
The cycle came to an abrupt halt in 1986 following
the change in Saudi strategy and the slump in crude
prices, which dropped from 26 to 10 dollars per barrel.
Even though the industrialized countries were
advantaged by the reduction in prices, the oil
companies were forced to cut first their investments in
exploration and then in development, with the
consequent severe reductions in activity. At the 12th
World Petroleum Congress (held in Houston, Texas, in
May 1987), with increases in oil prices up to 18
dollars a barrel, the companies wondered whether the
time had not come to resume explorative activities that
had been so brusquely penalized. In the next two years
there was a 26% upswing in investments in exploration
projects by United States companies, and of 18% and
19%, respectively, by BP and Shell. At the end of the
Eighties there was a resumption of activities at the
level of wells drilled and of acquisition of areas in the
international sphere.
13
Fig. 3. New exploration
areas in the 1990s.
deep waters
The Nineties and deep waters
In the Nineties the companies found themselves
benefiting from an unprecedented series of
opportunities (Fig. 3). First came an important opening
up of new geographical areas, in particular in the new
independent countries emerging from the break-up of
the Soviet Union (Azerbaijan, Kazakhstan, etc.),
which started attracting numerous foreign investors
including the oil companies. The new republics gave
themselves a series of modern legislative and
contractual instruments and made hitherto inaccessible
technical information available to the market. The
Caspian Sea ‘rush’ involved all the big companies,
both in Azerbaijan and in Kazakhstan. It was in the
Kazakh Caspian area in fact that a consortium formed
by Eni, Total, Shell, Exxon-Mobil and BG made the
most significant discovery in these years, with
recoverable reserves of as much as 13 billion barrels
of oil. In the Caspian no other important results have
been achieved, with the exception of the Shakh Deniz
field with its huge gas reserves (1999).
Activity in deep waters (more than 200 m deep, as
opposed to the continental shelf characterized by
depths of up to 200 m), which is the second new
feature of the period, in reality had had a precedent in
the Gulf of Mexico, where Exxon, Shell and Petrobras
had for some years refined avant-garde technologies.
These technologies were transferred to the deep waters
of West Africa (Angola, Congo, Nigeria and
Equatorial Guinea) and of the Far East (Brunei and
Indonesia). The approach to the deep-water problem
imposed on the oil companies an organization in
which the synergy of different professional
experiences became an element of great importance.
14
former USSR
In drawing up a balance of the results obtained in
this period by the oil industry it is important to
underline the concept of reconstituting reserves linked
with exploration. In the three-year period 1999-2001,
according to Deutsche Bank analysts (DB, 2002 a, b),
only 32% of the reserves certified by the major United
States companies (some 50 billion boe) came from
exploration. At world scale, however, it is observed
that from 1990 to 1994, new discoveries replaced 62%
of the oil mined, while after 1995 this ratio went down
to 53%. Also among the non-OPEC producer
countries, only Angola and Brazil wholly replaced the
oil produced with new discoveries. This picture
evidences how difficult it is to replace reserves by
means of exploration. The year 2000 proved to be an
exception to this, when the extraordinary discoveries
in the Caspian and in Iran equalized the ratio between
reserves discovered and production. Lastly, the low
replacement rate of some very important producer
countries, such as Mexico, Great Britain, Oman and
Colombia should be emphasized.
In the deep-water sector exploration in West Africa
took off at the beginning of the Nineties and
concentrated in particular in the Lower Congo Basin
areas and Nigeria. These basins were considered to
have great production potentials because similar
reference areas such as the Campos basin in Brazil and
the Gulf of Mexico had proved the existence of
‘play’(or combination of factors) situations linked to
the presence and the development of turbidite systems
in deep environments.
In the course of the years this assumption has been
confirmed by the discovery of important fields in
Angola: Girassol, Dalia, Hungo, Kuito, Kissanje,
Landana, Plutonio, Mondo, Tomba and Lobito, all
located in the Lower Congo Basin. The total reserves
found amount to some 7 billion barrels. Discoveries
have also been made in deep Nigerian waters (Bonga,
Agbami-Ekoli, Akpo, Bonga SW and Erha), located in
the first deep offshore belt, where oil prospecting has
attained a fair degree of maturity. It still remains to
explore an outer belt whose residual potential is
presumed to be very great. In the rest of West Africa,
only sporadic finds have been made. In Equatorial
Guinea, for example, the La Ceiba field has been
discovered, and in the deep and ultradeep waters of
Congo (N’Kossa, Andromede and Moho) the results
achieved have not come up to expectations and have
redimensioned the initial interest in the area. Not to
mention the Gabon deep offshore area, so far without
any results. A certain number of discoveries have been
made also in the south-east Asiatic region and in the
north-west Australian offshore area.
In the Gulf of Mexico interesting discoveries have
been recorded with new developments, such as Mad
Dog, Trident, Thunder Horse and Great White. In the
deep waters of the Gulf, too, further possibilities can
be glimpsed, but for high investments and using avantgarde technologies.
In South America, Brazil is outstanding in the oil
sector, with its deep waters (the Roncador field), while
gas seems to dominate the scene in Bolivia and in
Trinidad and Tobago.
Regarding Europe, there was the discovery of
Ørmen Lange in Norway and the Buzzard field in the
British sector of the North Sea.
In the African margin Egypt has provided
interesting gas reserves with the discovery of various
offshore fields. The Temsah, Sapphire, Scarab, Saffron,
Ha’py, Baltim and Darfeel fields should be mentioned,
as well as many others evidenced in the last decade.
In the Atlantic margin, to the west of the Shetlands
and the Färøe Islands, the areas considered of great
potential have instead not yet given significant results.
The same can be said of the Azerbaijan deep offshore
area, where various dry wells have been drilled and
only minor discoveries have been made.
In short, it can be said that deep waters have given
an important contribution to restoring hydrocarbon
reserves in the last decade. According to a recent study
(«Petroleum Economist», 2004), the discoveries
amount in total to 90 billion boe, and the potential still
be discovered ranges around 180 billion boe (60% oil).
In the exploration of deep waters, too,
technological progress in the last few years has made it
possible, initially to invest more efficiently, and then to
explore remote frontier areas. At the turn of the
Twenty-first century wells went down to depths of
2,000 m and operations as far down as 3,000 m were
being planned. It is clear that such a challenge has to
be justified by adequate discoveries for which
appropriate technological responses will be necessary.
A final problem connected with deep waters is the
finding of gas, which lacking a local market becomes
a by-product hard to use. In recent years gas has found
growing use, and discoveries of new reserves have
been far greater than production. To use also this
resource to the full, technological improvements and
investments in the liquefaction processes are required.
This panorama of the closing years of last century
cannot be concluded without recalling the other
discoveries in conventional plays, first and foremost the
oil in the Algerian Sahara which has turned out to be a
rich oil province where resources exist yet to be
discovered; the remaining Algerian sedimentary basins,
especially in the western part of the country, are still
underexplored. Algeria can therefore be considered a
country with a good mineral potential with regard to oil.
For gas, exploration efforts have been concentrated in
the South-West of the country, in the Ahnet Timimoun
basins, whose potential remains to be defined. At the end
of the Nineties the results reached in Iran were good;
some significant oil discoveries were made, a good part
of the additional reserves deriving from the Azedegan
field. An analysis of the Nineties in any case evidences
the great concentration of discoveries in few countries,
especially in already known basins, mostly in the Middle
East, as well as in Angolan and Brazilian deep waters.
At the start of the present millennium a progressive
improvement has been achieved in the success rate,
above all for gas, even though the number of
exploration wells is declining. The result of this higher
efficiency of exploration was the increase in the
additional reserves for each exploration well drilled.
The 2.3 million boe per well of the end of the Eighties
are doubled in the following decade and for some
major oil companies they are over 10 million.
The oil shock of 1998 and the reduction in costs
One feature of the cycle in the Nineties that must
not be forgotten is the collapse of oil prices in 1998
and the consequences of this fact in containing oil
company costs.
During 1998 the coincidence of various factors
(Iraq’s return to the market, the increased output of
Saudi Arabia, the brusque slow-down in Asian
demand) caused oil quotations to tumble below the
threshold of 10 dollars per barrel, values which, in real
terms, had not been recorded since 1972. It is
understandable that such low prices made the oil
companies rethink many projects drawn up in more
favourable periods and reduce investments in
exploration which, by definition, have a deferred
economic return spread over the years.
15
Despite the reduced investments and the
containment of costs, the companies’ reserves and
production increased considerably. This twofold result
was obtained by decreasing the percentage of dry
wells (40% compared with 60% in the Eighties) and
increasing the commercial value, i.e. the reserves, of
each single successful well, thanks to technology and
to a properly targeted strategic approach. Advanced
technology, in fact, as from the Nineties, enabled costs
to be limited and systematic use to be made both of
3D seismic, making it possible to reduce times
between discovery and production, and allowing for
technical improvements for drilling exploration wells.
As far as oil prospecting is concerned, already at
the beginning of the Nineties, the oil companies were
developing a new tendency to control and cut its costs
and succeeding in aligning the finding and
development cost at values of 4-5 dollars per barrel.
BP’s example, too, is significant: the British company
decided to pursue only objectives having a high
economic potential, with the result of bringing the
finding and development cost down from 6 dollars per
barrel in 1987-88 to 4 dollars in 1997-2000.
In conclusion, it can be stated that the oil shock at
the end of the decade had been salutary in terms of
streamlining organization, achieving greater efficiency
and reducing costs, factors that are today still present
in the performances of the oil world.
In particular the geographical distribution of
reserves (Fig. 4) is characterized by a considerable
imbalance in favour of the Middle Eastern area.
In the Middle East, Saudi Arabia has the largest
reserves (261.8 billion barrels or 25% of global
reserves), followed by Iraq (112.5 billion, 10.7%), the
United Arab Emirates (97.8 billion, 9.3%), Kuwait
(96.5 billion, 9.2%) and Iran (89.7 billion, 8.6%),
while the other countries (Qatar, Yemen and Syria)
have definitely smaller reserves.
In Africa important reserves are possessed by
Libya (29.5 billion barrels), Nigeria (24 billion) and –
with clearly lower totals – Algeria (9.2 billion) and
Angola (5.4 billion). In Central and South America the
leader is Venezuela (77.8 billion barrels, 7.4% of
world reserves), followed far behind by Brazil
(8.3 billion), while in Eurasia Russia is the leader
(60 billion barrels, 5.7%), followed by Norway
(10 billion), Kazakhstan (9 billion) and Azerbaijan
(7 billion).
If one considers the reserves in the ten-year period
1992-2002, a modest global increase (+4%) is
observed (from 1,007 to 1,048 billion barrels), but
significant variations are starting to take shape within
the single areas:
685.6
(65.4%)
Assessing hydrocarbons reserves
Introduction
Before speaking about reserves of hydrocarbons it is
considered useful to define the concept of reserves, a
term often used improperly. It should refer only to that
fraction of hydrocarbons contained in a field that can be
extracted (‘recovered’). The actual amount of the
reserves of a field is known only when total production
has taken place; earlier figures are mere estimates.
On the basis of the available geological, geophysical
and engineering knowledge at a given moment, a
distinction is drawn between proved, probable and
possible reserves. The proved reserves are those for
which there is reasonable certainty of recovery and for
which development is defined on given economic
conditions. Probable reserves are those which, even if
the development plan has not yet been finalized, are
likely to be developed. Possible reserves are those that
are uncertain in terms of technical knowledge.
16
38.7
(3.7%)
97.5
(9.3%)
77.4
(7.4%)
49.9
(4.8%)
98.6
(9.4%)
a
A
1,200
1,000
North America
Central and
South America
Europe-Former
Soviet Asia
Africa
800
600
400
Middle East
200
Asia-Pacific
0
1982
1992
2002
b
Oil reserves up to 2002
B
At the end of 2002, reserves of oil amounted to
1,048 billion barrels (BP, 2003), of which 819 billion
(i.e. almost 80%) in OPEC countries.
Fig. 4. Proved oil reserves (billion barrels):
A, distribution by macro-areas (2002);
B, evolution (1982-2002).
•
There is a clear-cut drop in North American
reserves (from 90.9 to 49.9 billion barrels).
• In the former Soviet countries reserves have
increased both in Azerbaijan (from 1.3 to 7 billion
barrels) and in Kazakhstan where, with the
discovery of the Kashagan field – the most
significant find in the last few years –, reserves
have recorded a further increase of more than 9
billion barrels.
• In deep offshore areas (depths of more than 200 m)
various discoveries have been made, in particular
in the Gulf of Mexico, in Brazil (an increase from
3 to 8.3 billion barrels), in Angola (from 1.5 to 5.4
billion) and in Nigeria (from 17.9 to 24 billion).
• An increase in reserves has also taken place in
Central and South America, especially in
Venezuela (from 62.7 to 77.8 billion barrels).
The global values in the preceding decade
(1982-92) are of little significance as no certain data
exist on the reserves of the former Soviet area, but
certain important elements should be emphasized,
such as the stationary nature of North American values
and the considerable increase in Middle Eastern
reserves (79%).
With regard to the life index of the reserves, in the
last twenty years this has increased from 28 years in
1982 to 40 years in 2002. But the situation is not so
stable as it might appear at first sight, because, if we
examine the various areas in detail, it is seen that the
countries that significantly sustain a long-term output
are basically those of the Middle East, with more than
90 years, and the Eurasian area (Russia in particular),
whereas for the countries of North America and of
Asia-Pacific, the indices drop dangerously to below 20
years.
Gas reserves in 2002
In 2002 world gas reserves amounted to 156,000
billion m3 (BP, 2003), spread mostly over two main
areas: the Middle East with 36% and Russia with 30%.
Europe, Africa and Asia share the remainder in more
or less equal proportions (7-8%), while the values for
Central and South America and for North America
(Fig. 5 A) are decidedly lower (4.5-4.6%).
Russia is outstanding among the various countries,
with 48,000 billion m3, and in the Middle Eastern area
Iran tops the list with 23,000 billion m3, followed by
Saudi Arabia with 16,000 and Qatar with 14,000
billion.
These figures give us a picture of the future
sources of supply.
If we consider the evolution of reserves over the
last twenty years (Fig. 5 B), it is observed that whereas
from 1992 to 2002 they increased by 12% (138,000
billion in 1992 against the current 156,000 billion m3)
56.06
(36.0%)
7.08
(4.5%)
12.61
(8.1%)
11.84
(7.6%)
7.15
(4.6%)
61.04
(39.2%)
a
A
160
140
North America
Central and
South America
Europe-Former
Soviet Asia
Africa
120
100
80
60
40
Middle East
20
0
Asia-Pacific
1982
B
1992
2002
b
Fig. 5. Proved gas reserves (thousand billion m3):
A, distribution by macro-areas (2002);
B, evolution (1982-2002).
concentrated mainly in the Middle East and offset by a
negative balance in the North American area (20%),
in the preceding decade the increase was considerable:
over 60%, particularly in Nigeria, Qatar, the United
Arab Emirates and Saudi Arabia. Among the
discoveries of the last decade those of Australian deep
waters, at Trinidad and Tobago and in Norway (Ørmen
Lange) are worth mentioning.
The reserves of hydrocarbons
in prospect – the “world petroleum life cycle”
The main productive areas are in basins located
in the northern hemisphere. Some three-quarters of
the 600 existing basins are not at present productive
and one-third of them has never been drilled by
exploration wells. One-third of the basins in the
world are virgin basins. The discoveries made so far
include a certain number of giant fields, i.e. fields
having reserves of more than 500 million barrels.
The reserves of these fields represent 1% of global
discoveries, but constitute 70% of the oil and 50% of
the gas found. Some authors (Klemme, 1980) at the
beginning of the Eighties estimated the additional
potential to be discovered as between 60% and
140% of the total reserves discovered (remaining
and produced), obtaining the more conservative
17
100
90
exploration wells drilled
Fig. 6. Gulf of Mexico:
cycles of exploration
(DB, 2002b).
80
70
60
50
40
30
20
value of 60% on the hypothesis that only virgin
basins could include a potential, while the more
optimistic hypothesis considered an increase even in
the productive basins. Between 1982 and 2002 the
increase in proved reserves was equal to 371 billion
barrels (BP, 2003), while until 2000, according to
the evaluation of the United States Geological
Survey, the resources still to be discovered amounted
to 690 billion barrels (USGS, 2000), a figure which
according to some is an overestimation but in any
case compatible with Klemme’s preliminary
forecast.
At this point the logical question is whether it is
difficult to find fresh exploration provinces. The latest
acquisitions after the international tenders called in
Egypt, Brazil, the Gulf of Mexico and Norway have
produced results inferior to expectations.
Furthermore, areas considered to have a high
potential such as the Azeri part of the Caspian Sea or
the Färøe Islands offshore have not given the hopedfor positive signals. Indeed, as exploration proceeds,
the amount of discoveries diminishes, which means
that more wells are being drilled with progressively
minor results.
Naturally this is true every time a certain play is
being sought. If this changes during the course of
exploration, an automatic ‘rejuvenation’ takes place
within the basin. One example of this is that of the
Gulf of Mexico (Fig. 6) where new plays rejuvenate a
basin above all from the standpoint of the revival of
operative and explorative activity. It should also be
borne in mind that there are about 18 basins in deep
waters in various areas (Nigeria, Gulf of Mexico,
Equatorial Guinea, Angola, Norway, Congo, East
India, Kalimantan, Brazil, Philippines, Egypt,
Malaysia, Mauritania, the Färøer, Morocco, Gabon
and the Black and Caspian Seas) where so far the
18
1993
1994
1995
1996
1997
1998
1999
2000
2001
0
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
10
shallow plays of the sedimentary sequences have been
tackled. Future trends are represented by deep offshore
targets, e.g. pre-saliferous themes, which are at depths
of more than 3,000 m under the sea bed. This
possibility of intervention will naturally depend on the
development of technology and on the drilling rigs
market.
In short, it is observed that in the long term the
areas of exploration will preferentially be located in
the Middle East, Arctic regions, Russia. The Middle
East in particular (especially Iran and Iraq), will be the
main area of production from which the majority of
the resources to be discovered will continue to come.
The hypothesis of the World Petroleum Life Cycle
(Duncan and Youngquist, 1998) regards the times of
exhaustion of oil reserves: a few years or a longer
period, which will permit a ‘soft’ transition to other
types of energy. The forecast of an exhaustion within
a relatively short time was announced as long ago as
1919 by the United States Geological Survey and
has, on various occasions, been the subject of
discussion and controversy. In particular we recall the
model constructed by Hubbert (1956), envisaging, on
the basis of the geological knowledge then available,
the beginning of the decline in production (peak oil)
of North American fields (excluding Alaska) already
in 1970. This hypothesis, valid for the United States,
turned out to be not suitable for a more general
application, since the model did not allow for a series
of technological and environmental variables which
in fact made possible discoveries that were out of the
question with the old geological concepts, or for a
different level of consumption. At a later date certain
followers of this theory, together with other experts,
sought to apply the appropriate correctives to the
original model, stating in particular that at world
level the slump in demand in the Seventies had
postpone the expected peak, but had not eliminated
the decline. Mention should be made, among others,
of C.J. Campbell (1997; 2000; 2001; 2002a, b; 2003),
J.H. Laherrère (1998), R.C. Duncan and W.
Youngquist (1998) and L.F. Ivanhoe (1997).
Contained in the articles of Campbell, the founder of
the Association for the Study of Peak Oil (ASPO),
regarded as the best known of Hubbert’s followers,
there are a number of grounds for discussion: even if
oil continues to dominate the market for long to
come, the boom in discoveries already had its
epilogue in the Sixties; current discoveries barely
cover 1/4 of consumption; the production peak, apart
from the Middle East, already occurred in 1997 and
for those countries the decline in production has
started; the peak at world level will take place in
2005-06 and the use of non-conventional oil will
postpone by few years this inevitable decline.
Campbell is furthermore critical of the way in which
information on reserves is transmitted by government
bodies (Oil & Gas Journal and World Oil or in the
BP reports). According to Campbell the values of the
reserves should be referred to the year of the field’s
discovery and not the summation of revisions which
make additions to something that in reality has
already been discovered. Moreover, the figures for
the reserves are often not only linked to the technical
aspect, but are conditioned by other factors (type of
agreement, budget, development plans).
Furthermore, for resources still to be discovered,
seismic, geochemistry and other technologies bring
to light increasingly more modest and difficult traps,
but do not lead to the discovery of such giants as
those found in the Sixties. In fact, of the remaining
resources, the characteristics of their volume, depth
and recovery are far more problematic than for the
past discoveries. The cumulative curve of finds in
70
12
surplus
deficit
wildcats
60
annual balance (billion barrels)
and produced reserves:
evolution of the year
balance
(Campbell, 2000).
50
10
40
8
30
6
20
10
wildcats (103)
Fig. 7. Discovered resevers
relation to wells drilled shows that big fields are the
first ones to be discovered. As time goes by, the
curve tends to flatten out with a series of marginal
results relating to the last discoveries. And also 2223 billion barrels are produced every year whereas
only 6 are discovered, little more than 1/4 of what is
produced. The production peak follows the peak in
discoveries with a physiological lapse. For instance,
discoveries in the United States reached their
historical maximum in 1930, while the production
peak occurred in 1970, after a lapse of forty years.
Fig. 7 shows the gap between discoveries and
production and demonstrates that the possible
increase in exploration wells would only very
slightly modify the discovery trend. It is also
observed that overly high prices could facilitate the
process of going over to alternative forms of energy.
Campbell concludes with a rather critical picture
with absolute dependence on Middle East prices and
the beginning of the decline of hydrocarbons in 2010
(2005 for oil, 2020 for gas). According to Laherrère
the production of liquid hydrocarbons should reach a
maximum in 2010.
The forecasts of the Energy Information
Administration (EIA) based on data supplied by the
United States Geological Survey are more optimistic,
as the recovery factors foreseen for the hydrocarbons
contained in the fields are higher. It is evinced from
the specific works on the subject that the Middle
Eastern area can for a certain period make up for the
productive shortfalls of other countries. The Middle
East’s present share in production is bound to increase
unless new oil provinces are discovered, as occurred at
the end of the Seventies when the entry into the market
of the North Sea and Alaska (with a considerable
contribution of production) reduced imports from the
Middle East from 38% to 18%.
4
0
10
2
20
1995
1990
1985
1980
1975
1970
0
1965
1960
30
19
Opposed to the Hubbert school, some experts
consider the presumed shortage of hydrocarbons as a
myth to be debunked, and see in technological
improvements in exploration and development the
possibility of discoveries of additional reserves,
evidencing that the average residual life of world
reserves is 40 years in 2002 against 20 years in 1948.
According to these experts the peak in the United
States is explained by the fact that American basins
have been explored very intensely, whilst a good part
of the basins in the rest of the world are
underexplored. Moreover technological improvements
(deflected wells, horizontal wells, 3D and 4D seismic)
will make it possible both to exploit available
resources at modest costs and to address extreme
environments such as ultra-deep waters. This more
optimistic scenario is supported by technological
progress, which permits higher recovery factors (from
22% in the period 1979-81 to 35% in 1997-99) and
above all lower production costs (from 21 dollars per
barrel in 1980 to 6 in 1997-99). According to these
experts, certain facts have limited discoveries in recent
years, in particular the exclusion of oil companies
from promising areas such as the Middle East. Also,
when reserves are spoken about they mean quantities
certified precisely by the accounting departments of
the oil companies and not the mineral potential with
its decidedly higher values; on the basis of this second
parameter, the situation could be one of a glut of crude
rather than one of scarcity, with the risk of
overproduction and the negative consequences that
possible production cuts aimed at avoiding drops in
prices would mean for the producer countries with
weak economies. The limit does not depend on the
physical lack of reserves, but on financial and price
policies. In short, the advocates of this line, while
recognizing that it will be increasingly more difficult
to find new reserves in accessible countries and simple
geological situations, place their trust in technology.
Not only the frontier areas, but also basins that have
for long been productive will go on supplying the
potential necessary, and the oil industry will find
solutions to the problems that arise (Longwell, 2002).
In conclusion, it can be stressed that the two
schools of thought correspond to different
philosophies at operative level (Lynch, 2003).
Believing in the Hubbert model means thinking of
high prices in short times and therefore opting for an
aggressive strategy with the objective of acquiring
additional reserves, even with high-cost projects. In
the other case, instead, a less alarmist outlook means a
more cautious strategy that favours low-cost projects
and a flexibility such as not to have nasty surprises in
the event of a slump in prices, as has sometimes
happened in the past.
20
Classification of fields and basin
distribution
Introduction
Below is a classification of fields (based in part on
the American Petroleum Institute) according to their size:
for oil fields
Megagiant: more than 50,000 million barrels (equal to
6.8 billion t)
Supergiant: 5,000 to 50,000 million barrels
Giant: 500 to 5,000 million barrels
Major: 100 to 500 million barrels
Large: 50 to 100 million barrels
Medium: 25 to 50 million barrels
Small: 10 to 25 million barrels
for gas fields
Supergiant: more than 850 billion m3
Giant: 85 to 850 billion m3
Major: 17 to 85 billion m3
Large: 8.5 to 17 billion m3
Medium: 4.2 to 8.5 billion m3
Small: 1.7 to 4.2 billion m3
Table 1 shows the numbers of fields discovered in
the world in the various categories. The 2 megagiants
are Ghawar in Saudi Arabia, and Greater Burgan in
Kuwait, while of the top twenty supergiants, 15 are
located in the Middle East, 2 in Russia, 1 in Latin
America and 2 in North America.
The location of these oil fields corresponds to
particular geological situations. There are in fact a
number of sedimentary basins that contain the most
significant oil and gas reserves.
Below is an indication of the cumulative reserves
(i.e. the entire quantity of oil found including
hydrocarbons already produced) of the main oil basins
and of the main fields therein. The scale of the
Table 1. Distribution of world oil fields by size
(Ivanhoe and Leckie, 1993)
Million barrels
>50,000
5,000-50,000
500-5,000
100-500
50-100
25-50
10-25
1-10
Size
Megagiant
Supergiant
Giant
Major
Large
Medium
Small
Very small
Total
World Total
2
40
46
240
327
356
761
4,599
6,371
Fig. 8. Oil basins.
major oil basins
(total reserves >15 billion barrels)
reserves comes from a number of sources (IHS
Energy, United States Geological Survey, Oil & Gas
Journal, Petroleum Economist), to which we refer for
further details.
Oil basins
Fig. 8 shows schematically the most important oil
basins, in the general domain of sedimentary basins.
Such description (see also Table 2) is in accordance
with the following subdivision of the world into
macroareas, as frequently used today:
• North America.
• Central and South America.
• Europe-Former Soviet Asia (countries of West
Europe, countries of East Europe, Turkey and
countries of the former Soviet Union).
• Middle East.
• Asia-Pacific (India, Pakistan, Bangladesh, Far
East, Southeast Asia, Australia and the oceanian
zone).
• Africa.
Middle East
The Arabian basin has the most abundant reserves
of all known basins and include two important oil
areas: the Central Arabian province of Rub’ al-Khali
and the Zagros province.
The former has overall reserves of more than 500
billion barrels of oil and 62 billion barrels of
condensate. The fields located in this province are
among the biggest in the world, such as Ghawar and
Greater Burgan. Moreover, the area contains a series
of fields with considerable reserves: Safanya,
other basins
Abqaiq, Rumailia, Zakum, East Baghdad, Manifa,
Zuluf, Bab, Bu Has, Berri, Bibi Hakimeh, Karanji,
Ab-e-Teimur.
The Zagros province contains more than 140 billion
barrels and 7 billion of condensate. There are several
fields of considerable size: Ahwaz, Gachsaran, Marun,
Kirkuk, Aga Jari, Rag-e Sefid, Parsi, Haft Kel.
Europe-Former Soviet Asia
The West Siberian basin consists of various oil
provinces with cumulative reserves of more than 140
billion barrels of oil. The most significant fields are
Samotlor, Fedorovo-Surguskoye, Ust-BalyMamontovskoye and Krasnoleninskoye.
Volga-Ural basin has reserves of more than 65
billion barrels. In this basin over a thousand fields
have been discovered, the best known of which are
Romashkino, Arlan, Tuymazinskoye and
Novoyelkhovskoye.
The Precaspian basin is the most important one in
Kazakhstan, with 133 fields discovered, with reserves
of more than 20 billion barrels of oil. It includes the
following fields: Kashagan, Tengiz, Uzen,
Korolevskoye, Karachaganak and Zhanazhol.
In the North Sea the total amount of discoveries is
more than 42 billion barrels of oil. The most important
fields are Statfijord, Ekofisk, Forties, Oseberg, Brent
and Gullfaks.
The South Caspian basin has 110 hydrocarbon
fields for a total amount of original recoverable
reserves of over 20 billion barrels of oil. The Azeri,
Chirag e Guneshli fields contain the major part of the
reserves.
21
Table 2. Oil basins
Basin
Cumulative
reserves
Fields
(only principal fields are indicated in order of magnitude)
type of fields
billion of barrels
Arabian Basin:
Central Arabian and Rub’ al-Khali Provinces
(Saudi Arabia, Kuwait, Neutral Zone, Iraq,
United Arab Emirates, Bahrein, Qatar)
>500 100-150 50-100 15-50
•
•
•
•
East Texas
Hawkins
Hastings
Thunder Horse
Mars
•
Romashkino
Arlan
Tuymazinskoye
Novoyelkhovskoye
Usinskoye
Bavilinskoye
Campo Costanero
Bolivar
Boscan
Urdaneta Oeste
Ceuta
Centro
Lago
•
Maracaibo
(Venezuela)
•
•
Forcados Yokri
Nembe Creek
Ubit
Zafiro Complex
Meren
Sureste
(Mexico)
•
Akal (Cantarel)
Sirte
(Libya)
22
0.5-5
Samotlor
Fedorovo-Surguskoye
Ust-BalyMamontovskoye
Krasnoleninskoye
Priobskoye
Volga-Ural
(Russia)
North Sea
(United Kingdom, Norway, Netherlands,
Denmark)
Giant
5-50
Ahwaz
Marun
Aga Jari
Gachsaran
Kirkuk
Gulf of Mexico
(USA: Texas, Louisiana)
Niger delta
(Nigeria, Cameroon, Equatorial Guinea)
Supergiant
50
Ghawar
Safanya
Greater Burgan Rumailia
Abqaiq
Zakum
Manifa
Arabian Basin:
Zagros Province
(Iran, Iraq, Turkey, Siria)
Western Siberia
(Russia)
Megagiant
Bermudez Complex
Ku
Abkatum
Tecomonoacan
Malob
•
Gialo
Sarir
Amal
Waha
Bu-Attifel
Statfijord
Ekofisk
Forties
Oseberg
Gullfaks
Table 2 (cont’d)
Basin
Cumulative
reserves
Fields
type of fields
billion of barrels
>500 100-150 50-100 15-50
Giant
5-50
0.5-5
Cerito Central
El Furrial
Mulata
Santa Barbara
Jobo
•
Permian
(USA: New Mexico, Texas, Oklahoma)
•
Yates
Wasson
Kelly Snyder
Precaspian Basin
(Kazakhstan, Russia)
•
Saharan Basins:
Gadames, Hassi Messaoud, Illizi
(Libya, Algeria, Tunisia)
Kashagan
Tengiz
Korolevskoye
Karachaganak
Zhanazhol
Hassi Messaoud
Ourthoud
Zarzaitine
Rhourde el-Baguel
Tin Fouye Tabankort
Hassi Berkine Sud
•
San Joaquin
(USA: California)
Wilmington
Midway Sunset
Kern River
Elk Hills
•
Southern Caspian
(Azerbaigian, Georgia, Turkmenistan,
Iran)
Guneshli
Chirag
Azeri
Balahani-SabunchiRamani
Goturdepe
•
Lower Congo
(Gabon, Congo, Angola)
Takula
Dalia
Girassol
Hungo
Kuito
•
Alberta
(Canada)
Pembina
Redwater
Swan Hills
Raibow
Provost
•
Campos
(Brazil)
•
Roncador
Marlim
Marlim Sul
Barracuda
Albacora
Prudhoe Bay
Arctic Coastal
(USA: Alaska)
Supergiant
50
•
Eastern Venezuela
(Venezuela)
Sumatra
(Indonesia)
Megagiant
•
Kuparuk River
Endicott
Point Mcintyre
Minas
Duri
Bangkot
Bekasap
23
Africa
The Sirte basin is the richest one in Libya with
more than 40 billion barrels of oil. 143 discoveries
have been made in this basin, including Gialo, Sarir,
Amal, Waha and Bu Attifel.
The Saharan basins with the Hassi Messaoud area
contain, besides the supergiant of that name, more
than 20 important oil and gas condensate fields,
including Rhourde el-Baguel and Gassi Touil. The
Gadames basin located in Algeria, Tunisia and Western
Libya contains about 20 fields in the Algerian part
with total reserves of 7 billion barrels of oil. Important
fields are Ourthoud, Hassi Berkine and el-Borna. The
Illizi basin, with original oil reserves of approximately
5 billion barrels, contains the Zarzaitine and Tin Fouye
Tabankort fields.
The Niger basin which is located in Cameroon and
Equatorial Guinea as well as Nigeria, has reserves of
about 50 billion barrels of oil. The chief fields are
Nembe Creek and Forcados Yokri, as well as a certain
number of fields with between 400 and 600 million
barrels (Okan, Imo River, Meren, Bomu, Delta South,
Obagi Parabe-Eko and Edop). In the deep offshore the
following main fields have recently been discovered:
Bonga, Bolia, Agbami, Akpo, Bonga SW and Erha,
for total reserves of about 6 billion barrels. The
discovery of the La Ceiba field in Equatorial Guinea
dates from 1999.
The Lower Congo basin (Gabon, Congo and
Angola) contains total oil reserves of over 20 billion
barrels. It has a distribution of fields of variable size
both in conventional waters and in deep waters. In
Gabon some ten fields of modest size (between 50
and 90 million barrels) have been discovered, while
the offshore fields of Congo have larger reserves:
Loango, Tchibouela, Emeraude and N’Kossa. In
Angola there are some 50 or so oil fields in the
conventional areas of Takula, Malongo, Numbi and
Pacassa, added to which there are the deep-water
discoveries made in the last few years, the most
important of which are Dalia, Girassol, Hungo, Kuito,
Kissanje, Landana, Tomba, Plutonio, Mondo and
Lobito.
North America
The most important basins in the United States are
the Gulf of Mexico, the inland basins (Permian,
Anadarko), the San Joaquin basin (California) and the
Arctic Coastal basin of Alaska.
The Gulf of Mexico basin is both onshore and
offshore and includes the coastal deposits of Texas
and Louisiana. In the coastal complex including the
Texas and Louisiana salt basins, total reserves exceed
50 billion barrels with such significant discoveries as
East Texas, Hawkins, Caillou Island and Bay
24
Marchand. In the offshore sector the total proved
reserves in the Gulf of Mexico are about 15 billion
barrels from a thousand or so fields. Activity has been
particularly intense in the last few years with
discoveries such as Thunder Horse, Mars, Mad Dog,
Neptune and Great White. Of the 95 discoveries made
between 1996 and 2000 (at a depth of less than 800
m), four have more than 300 million barrels and four
between 100 and 300. The deep waters of the Gulf of
Mexico have proved to be rich in oil (75 fields
discovered at a depth of more than 400 m, 40 of them
being oil fields).
The inland basins in the United States (Permian
and Anadarko), with reserves of more than 30 billion
barrels, contain the important discoveries of
Panhandle, Wasson, Yates and Kelly Snyder.
The San Joaquin basin in California, with more
than 20 billion barrels, contains the Wilmington
Midway Sunset, Kern River and Elk Hills fields.
The Arctic Coastal basin in Alaska, with more
than 15 billion barrels of oil, is marked by the
important discoveries at Prudhoe Bay and Kuparuk
River.
The Canadian sedimentary basin in Alberta has
more than 20 billion barrels, with some important
fields and others of medium size. Among the more
significant ones are Pembina, Redwater, Swan Hills,
Raibow and Provost.
The Sureste basin is the most productive one in
Mexico. More than 45 billion barrels have been
discovered there, with its fields at Cantarel, Bermudez
Complex and Abkatun.
Central and South America
The Campos basin has reserves totalling 16 billion
barrels. In this basin, whose depth is between 500 and
2,000 m, the Roncador, Marlim, Marlim Sul,
Barracuda and Albacora fields are located. The
Maracaibo basin has oil reserves of 55 billion barrels,
represented by only few fields. The most important
ones are Tia Juana, Lagunilla, Bachaquero, Cabimas
and Lama, known collectively under the name of
Campo Costanero Bolivar.
The Eastern Venezuela basin contains some
40 billion barrels of oil concentrated in the
El Furrial, Cerito Central, Mulata and Santa Barbara
fields. In the southern part is the Orinoco oil
belt in which there are extensive accumulations
of heavy oil having a density of between 7° and 10°
API and a high sulphur content. The total volume
of oil is estimated as 700 billion to over 1,000 billion
barrels: recovery factors are very low (5-6%),
and this is therefore one of the basic problems,
still unresolved, of the economic exploitation of this
oil belt.
Table 3. Gas basins
Basin
Cumulative Reserves
Fields
type of fields
billions of m3
>40,000 10,000- 5,00020,000 10,000
•
Arabian Basin:
Central Arabian and Rub’ al-Khali Province
(Saudi Arabian, Kuwait, Neutral Zone,
United Arab Emirates, Bahrein, Qatar)
Western Siberia
(Russia)
2,5005,000
•
•
Gulf of Mexico
(USA: Texas, Louisiana)
Arabian Basin:
Zagros Province
(Iran, Iraq, Turkey, Syria)
•
North Field
Ghawar
Greater Burgan
Shaybah
Abqaiq
Awali
Qatif
Asab
Urengoyskoye
Yamburgskoye
Bovanenkovskoye
Zapolyarnoye
Medvezhye
Tambeyskoye
Russkoye Yuzhnoye
Karampurskoye
Yuboleynoye
Utrennyeye
Ahwaz
Tabnak
Kangan
Bibi Hakimeh
Aga Jari
•
Groningen
•
Leman
Hewett
Indefatigable
Viking North
Dovietabad-Donmez
Shorton
Shatik
Gazli
Khangiran
Zewardi
•
Niger delta
(Nigeria, Cameroon, Equatorial Guinea)
Inoua Marine
Alba
Nnwa-Doro
Soku
Obiafu-Obrikom
•
Saharan Basins:
Hassi Messaoud, Ghadames, Illizi,
Thiremt Uplift
(Libya, Algeria, Tunisia)
•
•
Indonesian Basins:
Sumatra, Natuna, Kutei
(Indonesia)
Hassi R’Mel
Hassi Messaoud
Tin Fouye Tabankort
Alrar
Rhourde Nouss
In Amenas Nord
Astrakhan
Karachaganak
Kashagan
Tengiz
Zhanazhol
Natuna D-Alpha (Natuna)
Tunu (Kutei)
Arun (North Sumatra)
Badak (Kutei)
Pecico (Kutei)
Nilam (Kutei)
•
Northern North Sea
(United Kingdom, Norway)
Frigg
Ekofisk
Brent
Sleiper West
Oseberg
•
Eastern Venezuela
(Venezuela)
Santa Barbara
Pirital
Cerito Central
Mulata
Santa Rosa
•
Malaysian Basins:
Luconia - Malay
(Malaysia)
85-850
South Pars
North Pars
Marun
Rag-e Sefid
Pazanan
Gachsaran
Amu Darya
(Turkmenistan, Uzbekistan, Afghanistan)
Volga-Ural (Russia)
Giant
>850
Monroe
Carthage
Katy
Old Ocean
Pledger
Southern North Sea
(Netherlands, Germany, Denmark,
United Kingdom)
Precaspian
(Kazakhstan, Russia)
Supergiant
•
Bangkot (Malay)
Jerneh (Malay)
K05 (Luconia)
F06 (Luconia)
F23 (Luconia)
Orenburskoye
Romashkino
25
Fig. 9. Gas basins.
major gas basins
(total reserves >1,000 billion m3)
Asia-Pacific
The Sumatra basins (Atjeh, Rokan-Kampar and
Jambi-Palembang) contain a total of 15 billion barrels
of oil. The two most important fields are those of
Minas and Duri.
Gas basins
Among the supergiant gas fields, mention must be
made in particular of North Field in Qatar, South Pars
in Iran and Urengoyskoye in Russia. Of the top twenty
gas fields, twelve are located in the former Soviet
countries, seven in the Middle East and one in Africa.
The geological distribution of the gas reserves is
shown in Fig. 9 and in Table 3. The criteria of
representation (cumulative resources are indicated) are
those indicated for oil.
Middle East
The Arabian basin has gas reserves of around
64,000 billion m3 with the following fields: the above
mentioned North Field, Ghawar, and Greater Burgan.
The Zagros province has reserves of 12,000 billion
m3 of gas contained in fields of giant size, such as
South Pars, North Pars Marun, Rag-e Sefid, Gachsaran
and Pazanan.
Europe-Former Soviet Asia
The West Siberian basin, including also the Yamal
peninsula and the Kara Sea, contains of over 40,000
billion m3 of gas with some of the largest gas fields in
the world: Urengoyskoye, Yamburgskoye,
Bovanenkovskoye, Zapolyarnoye, Medvezhye,
Kharasaveyskoye and Tambeyskoye.
26
other basins
Volga-Ural basin has gas reserves of 2,800 billion
m3 and includes, as well as the Orenburgskoye gas
supergiant, Romashkino and other smaller fields such
as Korobrovskoye, Zhaykinskoye and Uritzkoye.
The Precaspian basin, straddling the area between
Kazakhstan and Russia, has more than 5,000 billion
m3. The most famous fields are Astrakhan and
Karachaganak.
The Amu Darya basin in Turkmenistan contains
gas reserves of 7,000 billion m3 in important fields,
the main one being at Dovietabad-Donmez.
The northern part of the North Sea is an important
gas basin where there have been numerous discoveries
(214 fields) and more than 4,000 billion m3 of gas.
The Central Graben area contains the following fields:
Troll, Ekofisk, Ørmen Lange, Frigg, Brent, Sleiper,
Sleiper West, Oseberg, Statfijord and Gullfaks. The
southern area is subdivided into two basins, the AngloDutch, mainly of gas, and the Northwest German
basin. The former has reserves of 2,530 billion m3 of
gas and in it the Leman, Hewett and Indefatigable
fields have been discovered. The latter has 4,500
billion m3 and contains the Groningen field.
Africa
The Saharan basins contain conspicuous gas reserves
(around 5,000 billion m3), which were among the first to
be exploited. Of great importance for exports is the giant
Hassi R’ Mel, with more than 1,000 billion m3 followed
by the 500 billion of the Rhourde Nouss complex and by
minor fields (Hassi Touareg, Nezla, Rhourde Chouff)
each with about 50 billion m3. Also to be noted is the
Alrar field, which takes the name of Wafa in Libya.
Regarding the Niger basin, Nigerian government
sources have declared reserves of 4,500 billion m3 of
gas, i.e. 35% of all African gas reserves. A project is
being drawn up for the creation of the West African
Gas Pipeline from Lagos in Nigeria to Takoradi in
Ghana, with the involvement of Chevron, Texaco and
Shell, while another project is for a natural gas
liquefaction and export plant.
In the Nile Delta more than 1,500 billion m3 of gas
have been discovered, thanks to the intense exploration
activity in the last few years. The basin contains the
Abu Madi-El Qara field, Port Fuad, Wakar, and the
more recent ones of Temsah, Sapphire, Scarab,
Saffron, Ha’py, Baltim and Darfeel. A gas pipeline is
being constructed from Egypt to Jordan.
Central and South America
The Est Venezuela-Trinidad basin is the area in
which the major gas reserves are concentrated, with
about 4,000 billion m3, even if only 10% of it is not
associated with oil production. In the Trinidad and
Tobago gas basin 1,000 billion m3 have recently been
discovered, in particular in the Red Mango, Mahogany,
Kapok and Ibiscus fields.
Asia-Pacific
In the Far East two countries are important for their
gas reserves, Indonesia and Malaysia. Malaysia has
more than 3,000 billion m3, mainly in the Luconia and
Malay basins. The gas fields are Bangkot, K05, F06,
Jerneh, Seligi and a number of more dated ones.
Indonesia has 4,000 billion m3 of reserves in the
Natuna, Kutei and Sumatra basins, with the Natuna
D-Alfa, Tunu, Arun, Badak, Nilam and Wiriagar Deep
fields.
North America
The Gulf of Mexico – considered in its regional
geological acceptation, i.e. including the coastal
basins – has total gas reserves of over 15,000 billion
m3 (approximately 4,400 billions are located offshore,
in 105 fields). The gas is mainly located in the
continental shelf (65% of total reserves), where there
are 31 fields each with more than 35 billion m3 of gas;
only one field of this size has so far been discovered in
deep waters.
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Roberto Prato
Scientific Consultant
1
GEOSCIENCES

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