Skip to comments.Failure marked Shell’s Gulf quest before massive discovery
Posted on 05/07/2014 5:34:44 AM PDT by thackney
A decade before Royal Dutch Shell fired up production at one of the largest offshore facilities in the world, it drilled an expensive dry hole.
Salt canopies laying on top of massive oil deposits in the Gulf of Mexico baffled 1990s seismic imaging technology that Shell used to decide where it could hit its payload. In 2003, the European oil giant struck an area that stunned geoscientists: its oil prospect was no where to be found.
We werent sure what happened, Robert Sloan, Shells Mars B subsurface coordinator, said in a talk about Shells massive Olympus platform during the Offshore Technology Conference in Houston. Did we drill into another basin? Was it a saline basin? What happened?
A decade later, Shells Mars B field has come into its own as seismic imaging improved from its state in the late 1990s. It had essentially imaged oil reservoirs by looking straight down into the ocean. Seismic imaging had become a lot more complex and capable of seeing through stubborn salt formations.
Late last year, Shell brought two wells tied to its massive Olympus platform into production. And the Mars field,130 miles southeast of New Orleans, is now expected to produce 100,000 barrels of oil equivalent per day by 2016. Shell believes the Mars field has 4 billion barrels embedded in underwater rock.
Under new reservoir modeling, Shell could see an additional reservoir that we hadnt seen in the earlier data sets, Sloan said. Shell began to have a lot more confidence in its reservoir images around 2007, when it first used new advances to discover the West Boreas oil lode.
West Boreas started shining through right off the bat, Sloan said. It was amazing how we had such an image below salt. It was very crisp data. When we first wanted to go out and drill another well in the Boreas, people kind of thought we were crazy. But this data was good enough to show its potential.
Shell would eventually approve drilling into the Boreas again in 2009. Near its old dry hole, Shell found over 200 gross feet of sand with over 200 net high quality oil sand base.
These wells confirmed what we saw in the seismic, he said. The company is now drilling into a 12,000-foot thick oil column 22,000 feet below the surface of the Gulf. We have a lot better understanding of whats going on.
Shells Mars B project adds to the companys 190 wells and six floating structures in the Gulf, and is expected to produce 1 billion barrels of oil equivalent over its 45-year lifespan, said Derek Newberry, an executive with Shell Exploration and Production.
Its also the first deep-water project of its kind to expand an existing oil field operation in the Gulf. Shell has already produced 800 million barrels of oil from the Mars field with its first development project that first started producing in the 1990s.
Its really a great example of, as technology is advancing in our industry, how we can use it to open up new opportunities, Newberry said. We stuck with it even after we drilled the dry hole. We were fortunate to go back and make the discovery in 2009. Five years later, were contributing 40,000 barrels per day to the energy supply.
So why then are we still paying $3.50 a gallon for gasoline....IN TEXAS? For crying out loud, this is freakin ridiculous and a huge drag on economy.
True, oil exploration, drilling and support services create thousands of jobs, but on the other hand excessively high energy prices saps disposable income of American families and places a drag on economic expansion.
So...what the heck? Places like Saudi, Iran, Emirates pay pennies at the pump compared to America's avg of $3.60 per gallon.
PEAK OIL PEAK OIL PEAK OIL GLOBAL WARMING CATASTROPHE IDIOTACRACY! Any questions?
US domestic oil production = 8.0 million barrels per day.
US Crude Oil Production
Saudi Arabia oil production = 9.8 million barrels per day.
So why then are we still paying $3.50 a gallon for gasoline
Because gasoline is made from crude oil, and crude oil is "expensive". The US still imports nearly as much crude oil as we produce ourselves. 7.2 million barrels per day.
U.S. Crude Oil Imports by Country of Origin
Our increase in domestic production has be dependent on the relatively higher prices. Those shale fields are not cheap to produce and the wells decline at a much higher rate.
Places like Saudi, Iran, Emirates pay pennies at the pump
And that is due to government subsidizing the fuel cost. Is that what you are suggesting to happen? More government subsidy?
For one thing, fracking shale formations and deepwater drilling are a helluva lot more expensive than drilling Spindletop or Electra.
Most of the drilling activity today is predicated on $80/bbl oil.
Add in the unnecessary expense imposed by government mandates -- e.g., ethanol and seasonal blends -- and you've got $3.50 gasoline.
Your gasoline is cheap.
If you compare the price of gasoline in the US to the price in other nations, the US comes in at #44 of 55. Norway is number one at $9.69 per gallon
If you compare the price of gasoline as a percent of income, the US comes in at #50 of 55. This is of course measured on average income and if you are in a low income group, it would be higher. Conversely, if you have a higher than average income, it would be lower. Measured this way, India has the highest price.
I don’t like the fact gasoline is $3.50 either.
But we are finding oil in a lot of places in the US & its waters because oil price is high. If oil price were not up around $100, or at least $70 to $80, almost none of these places we’ve boomed in oil the last 10 years would ever get explored with actual wells drilled, let alone exploited. The finding and developing cost is very high in deep waters and from very low permeability rocks onshore.
On the other hand, the middle east oil fields are pretty well known, simpler to locate sweet spots, and have two things we do not in abundance; tremendous permeability, 100 to 10,000 times that of an Eagleford (TX) or Bakken (ND) reservoir. Their fields are often also under a lot more pressure, up to 2-3 times ours in cases. F & D costs are vey low there.
“Norway is number one at $9.69 per gallon “
FWIW, another oil producing nation.
Uhhhhhh???? I thought the eco-nuts said we were “running out of” oil? Never mind. I guess they will just continue mandating regulations such that we won’t be able to use or afford it. What complete subhuman morons.
Note, this is not a discussion of a new find, but rather how dispite and expensive failure in the 1990s, the same area back in 2003 found an impressive amount with better seismic technology.
Most of the drilling activity today is predicated on $80/bbl oil.
Which is $4/barrel silver adjusted, i.e. as cheap on the average as it has ever been.
I would have like to have been in the room when the first geologist brought forth the first sub-salt prospect. I bet he was laughed out of the room. And then the drillers got nervous......