-Basic-oil-2007

Exploration Management

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Eni Exploration & Production Division

Exploration Management

WHAT is EXPLORATION? Deliberate, business oriented search for hydrocarbons Upstream activity targeting the replacement of produced reserves

WHY WE still- DO EXPLORATION? To open new frontiers for ultimate potential To create opportunities & value for the shareholders To keep core industry competence

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Upstream (Exploration & Production) activitiesUPSTREAM

Exploration Exploration

Development Development

Production Production

Exploration is the first of the main activities constituting the upstream workflow. Its purpose is to identify new areas prone to reservoir producible hydrocarbons, in order to replace ongoing production and, if possible, to increase the Companys production capabilities

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Exploration Project definition and objectivesEXPLORATION PROJECT: Within the frame of a general strategy, the exploration project consists of a series of studies and operations aiming at the replacement of the produced reserves. This is achieved through: 1. 2. 3. 4. identification of new targets in a defined area definition of their technical value: reserves and associated geological risk (POS = probability of success) definition of their economic value (EMV = expected monetary value). drilling of an exploratory well and ensuing possible appraisals

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Exploration Project definition and objectivesWhat we are looking for is a peculiar situation, within the basin, where all the necessary conditions for generation, expulsion, migration and entrapment of hydrocarbon have materialized in the right chronological order. This type of geological feature is called prospect. Once the prospect has been firmed up to a sufficent degree of confidence and its economic value has been estimated to be beyond the minimum threshold set by the Corporate, it becomes drillable.

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Exploration Project definition and objectives

However, this is the last stage of the pre-drilling exploration work. Before reaching this point, a great deal of work is devoted to basin regional studies, in order to identify specific areas of interest. Usually, the objects which are subsequently taken into account during this quest for new exploration targets are:

PLAY

LEAD

PROSPECT6

in decreasing order of size and, conversely, in increasing order of data availability, prediction accuracy and confidence. But lets give some definitions


PLAYa project associated with a prospective trend of potential prospects, but which requires more data acquisition and/or evaluation in order to define specific leads or prospects.Project activities are focused on acquiring additional data and/or undertaking further evaluation designed to define specific leads or prospects for more detailed analysis of their chance of discovery and, assuming discovery, the range of potential recovery under hypothetical development scenarios.

From: Petroleum Resources Management System SPE, 2007

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LEADa project associated with a potential accumulation that is currently poorly defined and requires more data acquisition and/or evaluation in order to be classified as a prospect.Project activities are focused on acquiring additional data and/or undertaking further evaluation designed to confirm whether or not the lead can be matured into a prospect. Such evaluation includes the assessment of the chance of discovery and, assuming discovery, the range of potential recovery under feasible development scenarios.


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PROSPECTa project associated with a potential accumulation that is sufficiently well defined to represent a viable drilling target.

Project activities are focused on assessing the chance of discovery and, assuming discovery, the range of potential recoverable quantities under a commercial development program.


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Drillable prospect generationBefore a well is drilled we can only achieve an understanding of the petroleum system and, afterwards, of the trap geometry and reservoir characteristics, on the basis of indirect methods of investigation . Several options are available, depending on the stage of the analysis where we are and, hence, on the required degree of resolution. In the preliminary regional basin analyses surface geology, magnetic and gravimetric methods are sometimes used (of course on top of older data and information belonging to previous exploration campaigns, if any). Subsequently, interpretation is based primarily on seismic data.

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The seismic methods

Of all the indirect methods of investigation, which include gravimetric, magnetic, electric and sonic, the latter, also called seismic, is by far the preferred for the hydrocarbons exploration. The reason is that it compounds a good resolution capability with the easiness of acquisition and with a reasonably low cost, compared with the amount of information it can generate. Virtually all the pre-drill exploration analyses and interpretations are carried out on the basis of seismic data.

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Seismic for E&P Activities

seismic is largely the most used investigation method in oil and gas E&P seismic is less expensive than drilling seismic data provide information on: geometry and size of the trap HC migration paths timing of trap formation direct presence of hydrocarbon (DHI) information regarding velocity, density, fluid content

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Reflection Seismic

a source sends acoustic energy into the ground the resulting echoes from underground rocks are detected by seismic sensors (geophones) at the surface the sensors transform the echoes into electrical signals proportional to the intensity of the echoes the signals are recorded on magnetic tapes for computer processing

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Indirect investigation: reflection Seismic

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Direct investigation: drilling

Mechanical drilling through the subsurface rocks is the only direct method to explore for hydrocarbons15


Exploration Project main phasesProspect generation & evaluation

Basin / Play analysis

Acreage identification / acquisition

Drilling & well results evaluation

Commonly, the exploration activity is subdivided into four different phases At first, regional studies and analyses are carried out in order to identify areas of potential interest. Then, on specific parts of these hydrocarbon prone area, more in-depth investigations are performed to point out specific blocks to be targeted for acquisition.16




Acreage acquisition


When the exploration licence is acquired, data and information from the past exploration activity (if any) become available. Usually, a new seismic survey covering the area of possible interest is also recorded. These data are used for prospect generation work. Throughout all this process, and until the first exploratory well is drilled, the technical work is aiming at firming up the play / lead / prospect potential with an continuously increasing confidence in the geological model and a constantly reduced degree of uncertainty about reserves and their economic value, in order to justify further investments.

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Acreage acquisition


The ultimate result of the studies carried out during each phase is a technical and economic evaluation of the hydrocarbons contained in the area. The same type of evaluation is performed each time an investment authorization is required, each time making use of more data and information acquired during the life of the Project.

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Acreage acquisition


All methods and techniques (seismic, geochemistry, basin modelling etc.) are often used more than one time, in subsequent phases of the project, to analize and integrate new data. In any case, the rule is to make full use of all the data and information available at any moment, in order the achieve the best possible result.

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Exploration activity as a process: the OPES

To guarantee the highest level of quality in its activities, Eni E&P Division has adopted a standard working procedure based on a detailed description of the exploration process. Each activity is described in a set of Handbooks, Best Practices and Workflow maps. This complex system is called OPES, an acronym standing for Opportunity and Project Exploration System. A similar tool is available also for the Development (OPDS) and the production (OPOS) phases. The three systems are linked one to the other, so that there is no break between activities20



Exploration, Development & Operations Management SystemsOPES OPESOpportunities G 1 Opportunities G 1 E E Generation Generation Opportunities G 2 Opportunities G 2 E E Evaluation Evaluation Pre-drill G 3 Pre-drill G 3 Exploration E Exploration E Drill & Drill & Post-drill Post-drill Evaluation Evaluation

OPDS OPDSGE4 GE4Evaluation Evaluation

OPOS OPOSConcept Concept Definition Definition

G1 G1

Concept Concept Selection Selection

G2 G2

G3 G3

Execution Execution

Handover Package

Handover First Handover First Acceptance Period to to Period Operations Production Operations ProductionHC in

Gp1 Gp1

Running Running Production & Production & Improvement Improvement

Gp2 Preparation to Gp2 Preparation to DecommissioninHC free

Running Running Production and Production and

Decommissionin g g

Project Management System Project Management System

Value Management System Value Management System

Technology Management System Technology Management System

PMS

VMS

TMS

Technical Scientific and Know-how Portals21


The EMS/OPES covers the exploration process according to the set of guiding principlesEMS/OPES guiding principles Value driven Knowledge sharing OPES guiding principles Exploration risk reducing

Flexibility

Aligned with best practice

Standardisation of terminology Decision driven

Team based

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Opportunity & Project Exploration System - OPES

New venturesPhase

Activities in existing Eni blocksPre-drill Exploration GE 3 GE 3 Drill & Post-drill Evaluation GE 4 GE 4 Evaluation

Opportunities G 1 GE 1 E Generation

Opportunities G 2 GE 2 E Evaluation

Main Gate question

Objective

To identify generic identify generic exploration opportunities exploration opportunities within strategic within guidelines guidelines

To evaluate specific To evaluate specific opportunities from a opportunities from a technical/economic technical/economic perspective and decide perspective and decide whether to proceed whether to proceed securing the legal right securing the legal right

To implement the To implement the operational programme operational programme aimed at detailing the aimed at detailing the prospect and evaluating prospect and evaluating how to proceed to the how to proceed to the drilling phase drilling phase

To confirm the presence To the presence of hydrocarbons and of hydrocarbons and update the technical update technical evaluation according to evaluation according to well results well results

Does the Does the opportunity deserve opportunity deserve further further investigation? investigation?

Is the acreage Is the acreage valuable enough to valuable enough to proceed to the proceed to the license license acquisition? acquisition?

Is the prospect Is the prospect technically and technically and economically mature to economically mature to proceed to the proceed to the drilling phase? drilling phase?

Does the Does the discovery deserve discovery deserve to move to the to move to the Evaluation Evaluation phase? phase?

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Phase 1: Opportunities Generation

Monitoring

Strategic guidelines

Opportunities selection/ updating

Opportunities generation set-up

Additional data & information acquisition

Regional geological study

EB

Data, information and studies collection

Basin & play analysis

Preliminary screening

Opportunities generation DSP submission

Scouting GE1 LegendKey Activity Preparation Activity Decision

Gate Assurance

Strategic Guidelines

Internal/ External Decision

Each phases activities are traced in detail

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Opportunity GenerationActivity Denomination Regional geological study

Activity Description Inputs Data for regional study

Interpret data in order to define number, type and location of plays in the region

Output/Deliverables Play inventory and play chance

HEM

EM

E

G

Head office HEM Exploration Management

EM

Exploration Manager

E

Explorationist

G

G&G

R

Reservoir

W

Drilling & Completion

F

Facilities

H

HSEQ

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For each phase Workflow Specifications are also available, tracing steps

Code N. EA.1EA.1 Management of Monitoring Process & Preliminary Opportunity Screening EA.2 Generation Project

Management

EA.3 Submission to Gate 1

of Opportunity

Ste MA &P26


and, within each step, the relevant tasks.N. EA.1.1 Task name Acknowledgement of Strategic Guidelines indications Co-ordination of the monitoring cycle Task Description - Receive and share with Exploration Team Company Overall Strategy. Professional EM M I Software applications Output

EA.1.2

- Co-ordinate the monitoring of other EM operators/competitors exploration activities. - Co-ordinate the monitoring of local authorities to follow the political/economic evolution. - Co-ordinate the research of technical information. - Develop network and contacts with competitors and third parties.

M

Internet Robertson IHS WoodMcKenzie

EA.1.3

Activate the preliminary screening of generic exploration opportunities

- Identify, during the monitoring process, possibilities to develop exploration opportunities. - Define a preliminary opportunity screening project, identifying structure and breakdown of the technical activities. - Plan the employment of resources assigned to the project. - Define the amount of work required, the project timeline and milestones, reporting schedule and deliverables. - Co-ordinate/Manage the process of project financing (budgeting). - Issue a Request of cost estimate; - Issue a Job Order upon approval of the Cost estimate provided; - Activate the process of releasing cost charging unit(s) (commessa), to fund and to control specific project activities.

EM HEM Responsible Functional Competencies

M M

PSOS

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Finally, geoscientist can also rely on check lists to make sure their work is complete

OPES Phase I:28

- ExploratioEni Exploration & Production Division


All this work, as we saw, is meant to produce a raccomandation to the Management, with a proposal for investment to be presented at the Gate. Before doing so, the opportunity/project must be validated by an independent entity. The opinion of experts outside the project group is sought, in order to gain different perspectives and to maximize projects definition. A mechanism of Assurance Checks has been put in place to this effect.

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Assurance Checks (AC)Assurance Checks (ACs) are aimed at introducing additional outside perspectives in order to increase potential project value Three types of Assurance Checks are envisaged by OPES:

Peer Reviews (PR) Recommended knowledge capture/sharing

Assurance Review (AR) Mandatory formal reviews aimed at verifying project quality and sustainability

Peer Assists (PA) Advice of an expert on technical aspects aimed at verifying and improving work in progress

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Assurance Reviews

Assurance Review (AR) Mandatory formal reviews aimed at verifying project quality and sustainability

Technical Review Assessment of prospect/project geological & geophysical quality

Project Review Assessment of project technical and economic evaluation

Opportunity Review Assessment of the opportunity within exploration portfolio

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OPES Assurance Reviews

Opportunities Opportunities GE1 GE2 Generation EvaluationO T P O

Pre-drill ExplorationT P

GE3O

Drill & Post-drill GE4 EvaluationT/P

Evaluation

O P T

Opportunity Review Project Review Technical Review

Assurance Review mechanisms are provide throughout the process, to enhance confidence in the recommendation before each gate is accessed.32


Opportunities G 1 Opportunities G 2 E E Generation Evaluation Prescreening Screening & Selection

Pre-drill Exploration Portfolio Selection

GE 3

Drill & Post-drill Evaluation

GE 4

Opportunity submission

Tools update

Opportunities evaluation

Opportunity validation

Assurance Reviews are described in the relevant Best Practice

Activity

Inputs

Activity Description

Outputs

Roles

Timing

Opportunity submission

Play inventory and play chance

Submission of the opportunity to the Exploration Body

Opportunity report

HEM Tool owner

Every time a new opportunity occurs

Tools update

Opportunity report

Insert new opportunity in the exploration portfolio Printout of the results

Opportunities positioning

Tool owner

Every time a new opportunity occurs

Opportunities evaluation

Opportunity report Opportunities positioning

Evaluate opportunity impact on risk, reward, cost, timing, materiality and other aspects of the exploration portfolio performance

List of Evaluated Opportunities

EB Tool owner

Quarterly / Every time a new opportunity occurs for specific cases Quarterly / Every time a new opportunity occurs for specific cases

Opportunity validation

List of Evaluated Opportunities

Validate opportunity consistency with the exploration portfolio

Opportunity feedback document Exploration portfolio profile update

Tool owner

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The Decision Support Package (DSP)

Of course, any proposal must be accompanied by a set of documents, in order to give the Decision Maker all the necessary elements to take his/her decision. Both the content and the format of these documents are estabilished by the OPES system and are fully described in the Best Practices. This set of documents is called DSP Decision Support Package.

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OPES: the Decision Support Package (DSP)The Decision Support Package (DSP) is a self-contained, comprehensive summary of key Project information required to support the decision-making process at gates Subject of authorisation Project Teams recommendations to the Decision Makers

Executive Section

High level overview covering key areas relating to business issues (e.g country data, geology, volumetrics, economics, risks) necessary to demonstrate that gates expectations have been addressed Specific project deliverables for in-depth assessment of key aspects

Reference Section

Feedback Document including Project Teams response

Attachments

End of phase Feedback Report i.e. lessons learned at the conclusion of the phase Technical Annexes optional documentation containing maps, geological data, other details Specific plans for the next phase

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Decision Support Package (DSP) of Phase 1

Opportunities Generation - DSP1DeliverablesExecutive Section

Contents Country overview Eni presence & Strategy Basin/Play summary

Opportunity proposal

Reference Section

Country Report, synthetic report containing the most relevant country aspects:

Eni presence in the country & competitive advantage Geo-political description, legal, fiscal and contractual framework Oil and gas activities (upstream and downstream) Project materiality: prospective resources (oil&gas) and potential Social economic scenario and possible health & environmental effects

Basin/Play description Risk Register Technical Annexes

Geological framework Play inventory and play chance Volumetrics and risks Major critical risk analysis (identification, level assessment and prioritisation) Maps Seismic and/or geological sections Geological data Opportunity Feedback Document

Attachments

AC1 Feedback Document

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OPES: the GateOnly when the DSP is complete, then we can access the Gate. Gate process consists of a management decision aimed at deciding whether to proceed to the next phase

Before GateGatekeeper

After GateProceed Rework

Decision Support Package

Assurance Check Reports

Gate

Hold Change

End of Phase Feedback Report

Decision Makers

Kill37


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Functional competenciesFunctions Business Planning & Business Controlling Planning Exploration Planning & Control Administration & Control Human Human Resources Resources Key support requirements of Exploration Activities To provide economic model and release monitoring, in order to provide an independent review on project consistency with company vision, goals and strategy To provide planning and control of exploration activities through cooperation with exploration units, securing exploration projects economic sustainability To provide cost and fiscal control services and define partnering accounting procedures in accordance with Eni requirements To provide and allocate professional human resources to the project in terms of skills and competencies in a timely and proper manner To provide support for corporate Hardware and Software management, DB organization and management and specific DB projects management To provide legal counseling and deliver legal services consistent with corporate vision, goals and strategy, and with the requirements of the legal and contractual framework To generate value ensuring that works, goods and services of the appropriate quality are made available at the specified place according to required schedules

IT Services

Legal & Contractual Legal

Procurement

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Stakeholder, Risk and Knowledge management

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Eni E&P Management Systems share a common architectureManagement Systems Architecture

Management SystemSet of requirements and rules: what is required and when Supporting best practices: how to meet process requirements

Phased process frameworkHigh level handbook

Supporting systemSpecific handbooks, best practices, workflows, tools

Responsibilities definition: who does what

Processes & OrganisationFlowcharts, Procedures, Organisation charts, Job Descriptions...

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PMS / VMS elementsPMS PMS

Exploration Management System OPES OPES

VMS VMS

TMS TMS

DocumentActivity Denomination Opportunities evaluation set-up Objective Assess geological & geophysical quality of the hydrocarbon accumulation to be appraised and consistency with company standards

DescriptionTechnical Assurance Review: PV- Prospect Validation

Input Activity Description Set-up of organisational aspects for Opportunities based on available data Evaluation phase addressing Technical Evaluation - PRD technical Supporting technical data Key Review Questions Is the activity aligned with the Companys global exploration Programme? Is the evaluation of the activity technically sound? Have corporate standards for technical evaluation been adopted?

OPES Handbook

Inputs DSP1 Gate 1 Approval Joint Study Agreement (JSA) Joint Bidding Agreement (JBA)

Output/Deliverables Project scope & objectives statement update Work plan and resources Risk register update Stakeholder management plan HSEQ plan

HEM EM H

Activities

Develop background on technical aspects of the projects Review, discuss and debate proposals If necessary, ask for external expert opinion Understand key issues and propose possible solution If necessary, request modifications and suggest changes Document key risk/uncertainties and recommendation via Feedback Document

Output Head office HEM Exploration Management EM Exploration Manager E Explorationist G G&G R Reservoir W Drilling & Completion F Facilities H HSEQ PV Feedback Document Validated PRD technical

Define which deliverables have to be produced and when Describe what has to be done for each task

PMS Handbook

PMS/VMS Handbook

Team Management Project Administration Project Planning & Control Document and Data Management H,S,E,Q management Procurement Management Economics

VMS Handbook Value Assurance Risk Assessment Knowledge Management

Best Practice

PMS Best Practices: Economics

VMS Best Practices: Value Assurance

Describe how tasks should be carried out 42


PMS Handbook ESP.PMS.MA.0001.000 Project Staffing ESP.PMS.BP.0001.000 Stakeholder Management ESP.PMS.BP.0002.000 Internal Interface ESP.PMS.BP.0003.000 Decision Tree ESP.PMS.BP.0004.000 Economic Evaluation Economic Evaluation ESP.PMS.BP.0005.000 ESP.PMS.BP.0005.000

EMS Documents Map

Project Org. Cha ESP.EMS.BP.0001.

Job Description ESP.EMS.BP.0002. 43Eni Exploration & Production Division

OPES RoadmapRework, Hold, Change, Kill Rework, Hold, Change, Kill Rework, Hold, Change, Kill Rework, Hold, Change, Kill

Opportunities Generation

G E1

Proceed

Opportunities Evaluation

G E2

Proceed

Pre -drill Exploration

GE3

Proceed

Drill & Post -drill Evaluation

GE4Does the discovery deserve to move to the Evaluation phase?

Does the opportunity deserve further investigation? To evaluate specific opportunities from a technical/economic perspective and decide whether to proceed securing the legal right

Is the acreage valuable enough to proceed to the license acquisition?

Is the prospect technically and economically mature to proceed to the drilling phase? To confirm the presence of hydrocarbons and update the technical evaluation according to well results

To generate generic exploration opportunities within strategic guidelines

To implement the operational programme aimed at detailing the prospect and evaluating how to proceed to the drilling phase

Roles

Activities Scouting Data, information and studies collection Basin & play analysis Preliminary screening Opportunities selection/updating Opportunities Generation set -up Additional data /information acquisition Regional geological study Opportunities Generation DSP submission

DeliverableReport with information/data on competitor and on exploration activities by country/opportunity List of data sources Country Report Basin/play description Opportunities Evaluation/Summary Report Opportunity inventory Selected Technical Opportunities Database feeding Project Scope & Objectives Statement Work plan and resources Risk Register set -up Data for regional study Play inventory and play chance DSP 1 Deliverable AC 1 Feedback Document End of Phase Feedback Report

Activities Opportunities Evaluation set -up Collect additional data Perform technical evaluation ( Volumetrics & Risk) Perform economic evaluation (Production profile, CAPEX, OPEX, EMV) Opportunities evaluation DSP submission

DeliverableProjects Scope & Objectives statement update Work plan and resources Risk Register update Stakeholder Management Plan HSEQ plan Basin data Lead/prospect generation PRD - technical Database feeding PRD economic Database feeding Decision tree and 7 exhibits DSP 2 Deliverable AC 2 Feedback Document End of Phase Feedback Report Bidding document/letter of acceptance

Activities

DeliverableProj. Scope & Obj. statem . update Work programme Budget HSEQ plan update Risk Register set -up/update Stakeholder Management Plan Environmental Screening Health Impact Assessment Processed data Technical final report Database feeding PRD technical PRD - economic Database feeding Decision tree and 7 exhibits DSP 3 Deliverable AC 3 Feedback Document End of Phase Feedback Report

Activities

DeliverableProj . scope & obj. statement update Work programme Risk Register update Stakeholder Management Plan HSEQ plan update Geological & Drilling well program. Environmental Impact Assessment Health Impact Assessment Drilling Exp. Authorisation Request Well Drilling Data Well Drilling Operational report Drilling & Op. Geology report Testing Exp. Authorisation Request HSEQ records Preliminary well testing programme Well testing programme Well testing data Well testing operational report Well testing interpretation report HSEQ records Environmental analysis Well results document ( prel version) Final Well Report Post -drill Evaluation Summary Well results documents Updated phase 3 PRD DSP 4 Deliverable AC 4 Feedback Document End of Phase Feedback Report Release

Technical Competencies

Head -office exploration management Exploration Manager Explorationist G&G Reservoir Drilling & Completion Facilities HSEQ

Pre-drill Exploration set -up Collect/acquire additional data Perform technical evaluation (Volumetrics & Risk) Perform economic evaluation (Production profile, CAPEX, OPEX, EMV) Budget proposal

Drill & PDE set -up Well Planning Drilling and data collection Completion and testing Post -drill Evaluation Discovery evaluation Drill & Post -drill Evaluation DSP submission

Business Planning

Assure cooperation with Exploration Division competent areas for identification and selection of new exploration projects Manage and coordinate Service Agreement with Business Units

Evaluate opportunity impact on bdg/4 years plan, long term plan Define econ. eval . methodologies Develop/upgrade and provide a model for economic evaluation Assure cooperation with Explor . Division competent areas Participate in negotiation activ . Manage and coordinate Service Agreement with Business Units Validate within the PRC the technical -economic sustainability of exploration projects Coordinate 3 rd parties relations Define tax impact Set up procedures to meet financial and administrative PA, JOA requirements Formulate ad hoc specific training Advice on organisational issues Monitor health related issues Support creation of Project Database (PDB) Support and manage applications and databases Support creation and update of exploration databases Evaluation of legal and contractual opportunity framework Assistance for reviewing, drafting and negotiation Evaluation of procurement framework in PA Assistance for reviewing and advising on agreements with partners in the opportunity (JOA) Advice on possible procurement implication in future activities Define and negotiate contracts for data and studies purchasing Define procurement procedures Finalisation of service Develop background on technical aspects of the projects Review, discuss, debate proposal Ask for external expert opinion Understand key issues and propose possible solution Request modifications & changes Document key risk &recommend Key issues & propose solution Assess project econ. analysis using best practices &procedures Require&suggest modifications Track and document committee members dissent Insert new opportunity in the exploration portfolio Evaluate/re -evaluate opportunity impact on risk, reward, cost timing, materiality Sanction opportunity consistency

Economic model Investment proposal authorization ( Rapporto Preliminare )

Develop/upgrade and provide a model for economic evaluation Monitor & Control project value creation drivers Assure cooperation with Exp. Division competent areas Manage and coordinate Service Agreement with Business Units Validate within the PRC the tech/ econ sustainability of exp. Proj . Assistance for compliance with obligation under PA Participate in negotiation activity Coordinate 3 rd parties relations Cost proj . monitoring vs budget Implement procedures to meet financial & adm. JV requirements Make necessary competencies available for exploration project Resources management for project optimisation Implement ad hoc spec. training Monitor health related issues Support/manage applications and databases Support update of exploration databases

Economic model Release

Monitor and control project value creation drivers Assure cooperation with Exp. Division competent areas Manage and coordinate Service Agreement with Business Units Validate within the ESB the tech/ econ. sustainability of successful Explor . Projects (HC discovery) Assistance for compliance with obligation under PA Participate in negotiation activity Coordinate 3 rd parties relations Cost proj . monitoring vs budget Set up/revise procedures to meet financial & adm. JV requirements Make necessary competencies available for exploration project Resources management for project optimisation Implement ad hoc spec. training Monitor health related issues Support/manage applications and databases Support update of exploration databases Review of exploration databases for alignment and consistency with Development Project DB

Validated PRD contribution JV accounting procedure Project roles Specific organisational circulars/official communication

Exploration Planning & Control

Opportunities recommendations

Validated PRD contribution Preliminary agreements JSBA, AMI, JOA, Shareholder Agreement, Petroleum Agreements, Farm -in, Sales and Purchase Agreement

Validated Discovery Declaration (SEC classification proposal for Exploration Well)

Administration & Control

Functional Competencies

Financial evaluation of tax impact Petroleum Agreement , JOA accounting procedure

JV (revised) accounting procedure

Human Resources Support creation of Preliminary Project Database (PPDB) Set up of collaborative environment to provide access to federated databases and tools Set up of task specific applications Historical data recovery Assistance for review, drafting & negotiation for AMI finalisation Assistance for review, drafting and negotiation of agreement(s ) to obtain data through acquisition or simple disclosure

Back Up of Preliminary Project DB

Project roles Specific organisational circulars/official communication

IT Services

Revision of guidelines and procedures, if requested by project needs Backup of Project Data Base

Revisions of guidelines and procedures, if requested by project needs Backup of Project Data Base

Revisions of guidelines and procedures, if requested by project needs Backup of Project Data Base

Legal

AMI - Area of Mutual Interest CA - Confidentiality Agreement Purchase Data Agreement

Advice on specific issues

General assistance to oper . activ . Support to procurement activities Assistance for compliance with obligation under the PA Possible amendment to existing contracts & Dispute resolution General assistance to oper . activ . Assistance for compliance with obligation under the PA Procurement activities for tendering and awarding for services of G&G data acquisition Logistic assistance for import, export, transportation services Define and negotiate contracts for data and studies purchasing Procurement activities for tendering and awarding Develop background on technical aspects of the projects Review,discuss&debate proposals Ask for external expert opinion Key issues & propose solution Require&suggest modifications Document key risk/uncertainties and recommendation Key issues & propose solution Assess project econ. analysis using best practices &procedures Require&suggest modifications Track and document committee members dissent Define parameters for ranking Feed and run the ranking tool to preliminary select prospects (Re)Evaluate opportunity impact on risk, reward, cost, timing Sanction expl . portf . consistency


General assistance to oper . activ . Support to procurement activities Assistance for compliance with obligation under the PA Possible amendment to existing contracts & Dispute resolution General assistance to oper . activ . Assistance for compliance with obligation under the PA Procurement activities for tendering and awarding for goods and services mainly for drilling operations Logistic assistance for import, export, transportation services


Procurement

Define and negotiate contracts for data and studies purchasing Advice on possible procurement implication in future activities

Contracts Reports / Analysis / Procedures




Technical PV Team

PV Feedback Document Validated PRD technical

Assurance Check

PV Feedback Document Validated PRD technical

Project PRC Committee Exploitation Steering Body Insert new opportunity in the exploration portfolio Evaluate opportunity impact on risk, reward, cost timing, materiality Sanction opportunity consistency

Opportunity Feedback Document Exploration portfolio profile update Opportunity Proposal Country Report (synthetic report) Basin/Play Description Risk Register Technical Annexes Opportunities Evaluation TOR AC1 Feedback Document End of phase Feedback Report

PRC Feedback Document Validated PRD economic

PRC Feedback Document Validated PRD economic

Validate the Discovery data contained in the updated well results document Evaluate the project, highlight the possible local constraints and the critical issues for the asset development Propose project class and type

Hydrocarbon Discovery Declaration ESB Feedback Document including project class and type

Opportunity Exploration Body

Opportunity Feedback Document Opportunities exploration portfolio profile update Investment Proposal PRD Technical PRD Economic Risk Register HSEQ plan Technical Annexes Pre-drill Exploration TOR AC2 Feedback Document End of phase Feedback Report Approve New Ventures investment proposal Commit resources for license acquisition

Inventory of drillable prospect Projects pre -selection Exploration drilling budget proposal Budget Proposal PRD Technical PRD Economic Risk Register Stakeholder Management Plan HSEQ plan update Technical Annexes Drill & Post -drill Evaluation TOR AC3 Feedback Document End of phase Feedback Report To assess whether the Discovery deserves to be evaluated and to proceed to the Evaluation phase of the OPDS HC Discovery Declaration Post Drill Evaluation Summary Well Result Document Updated phase 3 PRD Risk Register Stakeholder Management Plan HSEQ plan update Technical Annexes AC4 Feedback Document End of phase Feedback Report Commit resources, define project class, appoint DPM and start with the Evaluation phase

Eni Exploration & Production DivisionDecision Maker To decide if the opportunity is potentially attractive and consistent with strategy Approve expenditures for evaluation requirements (manpower deployment, data and studies purchase, ) To decide whether to proceed to the license acquisition on the basis of tech & economic potential of the opportunity and its consistency with strategic guidelines

Exploration Manager

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Gate

DSP

To decide whether a selected prospect is drillable and to allocate funds in the budget

Commit resources for Drilling and Post -drill Evaluation Phase (budget)

http://wwwdsc.sd.agip.it/ems/

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Exploration activity: the steps1) Basin regional study and specific areas identification preliminary evaluation data acquisition the the the the bid round farm-out company take over direct negotiation

1) Acreage acquisition

1) Area/block detailed studyseismic acquisition and interpretation prospect generation prospect evaluation and validation evaluation of a discovery transition to Development appraisal planning and execution46

1) Drilling, appraisal and development







The basin regional study

The preliminary evaluation of an area is generally based on scouting and other data already available to the Company. The basin regional study is primarily aiming at the identification of a petroleum system, if any. The petroleum system is a combination of geological factors which, coming into action in the right order, may give origin to an accumulation of producible hydrocarbons.

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Phase 1: Opportunity Generation

Monitoring


Opportunities selection/ updating Data, information and studies collection

Opportunities generation set-up

Additional data & information acquisition

Regional geological study

EB



Scouting

These activity is described in the Phase 2 of the OPES workflow


GE1

LegendKey Activity Preparation Activity Decision

Gate Assurance



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Location of Mauritania Salt Basin

MSGBC Basin

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Offshore Northwest Africa

96 offshore wells have been drilled in the NW African margin from 1966 to 2000 52 offshore wells drilled in the MSGBC Mauritania Senegal 11 30

Guinea Bissau 11

AT LEAST 50% INDICATED PRESENCE of HYDROCARBON at DIFFERENT LEVELS51


Arctic resources potential

52


Arctic Resou53


RUSSIA BARENTS-PECHORA SEA PROJECT Seismic Grid & Prospects

EXPLORATION STATISTICS: >400.000 2D SEISMIC SHOT THREE 3D SEISMIC SURVEYS -PRIRAZLOMNAYA -VARANDEY -SHTOKMANOVSKOYE > 50 WELLS DRILLED AROUND 90 STRUCTURES & 10 FIELDS DISCOVERED > 25 BILLION T.O.E.

LICENCE HOLDERS: SEVMORNEFTEGAZ - SHTOKMANOVSKOYE - PRIRAZLOMNOYE ARCTICMORNEFTEGAZ - VARANDEY & MEDYNSKAYA - KOLOKOLMORSKOYE

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Fig. 22

Malesia

New country

Company name

The result of the technical evaluation of the area is only one of the criteria on which the decision is based. Political and economic consideration on the hosting country are also taken into account.

xx / xx / xxxx

55


as well as the consistency of the expected producible hydrocarbons with the medium and long term corporate portfolio strategies.

STRATEGIC FIT MATURITY RESOURCE POT56


The basin regional study

Assuming that our regional basin analysis has produced a geological model indicating the possibility of an active petroleum system, capable of yelding the right type of hydrocarbons in a country that matches our corporate strategic orientation what do we do? We try to look more in depth, in order to identify specific areas / block of interest to propose for acquisition. This quite often means that we need to buy spec seismic data, data packages, reports etc. and then employ a significant amount of human resources for their interpretation. To do so, we need a specific management approval.57


OPES Phase 1New venturesPhase

Activities in existing Eni blocksPre-drill Exploration GE 3 GE 3 Drill & Post-drill Evaluation GE 4 GE 4 Evaluation

Opportunities G 1 GE 1 E Generation

Opportunities G 2 GE 2 E Evaluation

Main Gate question

Objective

To identify generic identify generic exploration opportunities exploration opportunities within strategic within guidelines guidelines

To evaluate specific To evaluate specific opportunities from a opportunities from a technical/economic technical/economic perspective and decide perspective and decide whether to proceed whether to proceed securing the legal right securing the legal right

To implement the To implement the operational programme operational programme aimed at detailing the aimed at detailing the prospect and evaluating prospect and evaluating how to proceed to the how to proceed to the drilling phase drilling phase

To confirm the presence To the presence of hydrocarbons and of hydrocarbons and update the technical update technical evaluation according to evaluation according to well results well results

Does the Does the opportunity deserve opportunity deserve further further investigation? investigation?

Is the acreage Is the acreage valuable enough to valuable enough to proceed to the proceed to the license license acquisition? acquisition?

Is the prospect Is the prospect technically and technically and economically mature to economically mature to proceed to the proceed to the drilling phase? drilling phase?

Does the Does the discovery deserve discovery deserve to move to the to move to the Evaluation Evaluation phase? phase?

We just completed the work of OPES Phase 1. Now, to move to the next phase and carry out specific evaluations, we need to pass through Gate GE1!

58


Phase 1: Opportunity Generation

MonitoringOpportunities generation set-up Additional data & information acquisition Regional geological study


Opportunities selection/ updating Data, information and studies collection

EB




Scouting GE1

Before accessing the Gate, we still need to have the proposal validated by the Opportunity Assurance Review called EB Exploration Body. Only if the EBs concurrence is obtained the proposal can be submitted to the Decision Maker.59







Phase 2: Opportunity Evaluation

Opportunities evaluation setup

Collect additional data

Perform technical evaluation(Volumetrics & Risk)

PV

Perform economic evaluation(Production profile, CAPEX, OPEX, EMV)

PRC

EB

These activity is described in the Phase 2 of the OPES workflow, the Opportunity Evaluation. Objective of the activity is to identify, evaluate and possibly propose for acquisition assets of economic interest to the CompanyLegendKey Activity Preparation Activity Decision

Opportunities evaluation DSP submission

GE2 License acquisition

Gate Assurance



61







The Bid Round

An international bid is a process by means of which a country assigns to selected oil companies the rights to explore for and to produce hydrocarbons in specific areas (blocks, licences) within its boundaries. The areas can be either on land or in the offshore. The bid is on competitive basis: each of the companies (that must possess an adequate level of standards and experience) makes an offer in cash and work programme, and proposes a scheme for sharing the future production with the hosting government. Often, these bids include only part of the blocks in a basin. Other are put on offer at a later stage, and sometimes the process is repeated several times. Each offer of exploratory acreage is therefore referred to as a Bid Round. The next slides show few examples63


RUSSIA BARENTS-PECHORA SEA PROJECTBarents & Pechora Sea Tenders 2005-2010BIDDING BLOCKS 2005-2010 AND RESERVES ESTIMATION (Russian Sources)

64


SABRATHA

Lybia 2006 Bid Round IIIGHADAMES CIRENAICA

SIRTE

MURZUQ KUFRA

65


Morocco - Bid Round 2001 Rabat - Safi Area

66


Data Base

7750 km SPECULATIVE 2D SEISMIC SURVEY TGS-NOPEC 2000 (5x15 km mesh size) IHS TECHNICAL REPORT - A technical evaluation of the deep water areas of the Rabat-Safi sector NW Morocco - Offshore licensing round 2000 DSDPs WELL DATA SEVERAL WELL DATA relevant to surrounding basins ENI REGIONAL DATA (SEAGAP, IFNI etc.) BIBLIOGRAPHY DATA

67


Regional Seismic Data Base1000 1000

1 00 00 1 00 1000

0 1 00

200

0 1 00

2 00 0

2 00

50

20 05020 05050

2 00

0 2 00

20 00

0 200

2 00

2000

2 0 00

0 2 00

0 1 00

200

20 00

20 00 2 00

2 00 0

10 00200

0 100

0 200

2000

1000

0 10 0

200

0 2 00

1000

0 200

1001 00 00

2000

10000 20 0

2000

2000

0 2 00

2000

1000

1000

2000

2000

20 0 0

2 002000

10 00

501000 0 1 000 20

0 1 00

2000

200

200

1000

1000

1000

0 10

0 20

0 20 0

2 00

0 10 0

10 00

2000

1000

1000

20 20 0 0 00

0 1 00

2000

0 20

2000

0 1 00

2000

0 20

300 0

20 0

200

101000 00

100 0

1000

200

20000 20

0 5

0 30 0

20001000

0 200

2000

200

200 0 2000

0 5

20 0

10 00

2000

2000

200

0 5

20 0

200

0 2 00

0 2 00

1000

0 2 00

20002002000200

0 1 00


3000

1000

0 2 00

2002000

1000

0 3 00

68

Regional Seismic LineNW

DSDP 547B

SE

Intra Tertiary Base Tertiary Albian Top Jurassic Triassic

69


Petroleum System SOURCE ROCKS (T.O.C. Values) PRERIFT SEQUENCE: SILURIAN (12 % ) DEVONIAN ( 6 % ) POSTRIFT SEQUENCE: TOARCIAN ( 4 % ) ALBIAN/APTIAN ( 6 % )

REGIONAL SEALS

TRIASSIC SALT APTIAN TO CENOMANIAN SHALES

RESERVOIRS (Porosity Values) PRERIFT SEQUENCE ORDOVICIAN SANDSTONE ( 8 -11 %) DEVONIAN CARBONATE ( 5 -14 % ) SYNRIFT SEQUENCE TRIASSIC SANDSTONE (10 - 16 % ) POSTRIFT SEQUENCE JURASSIC CARBONATES ( up to 35%) LOWER CRETACEOUS SAND. ( 25% )

TRAPS STRUCTURAL 4 WAY DIP CLOSURE (SEDIMENT DRAPING OVER SALT DIAPIRS) STRATIGRAPHIC TRUNCATION AGAINST THE DIAPIRS FLANKS UP-DIP PINCH OUT, CONFINED CHANNEL SYSTEMS ETC.

70


Post-Salt Play Types1 1 2 2 3 3 CARBONATE PLATFORM EDGE - REEFAL BUILDUPS CARBONATE PLATFORM EDGE - REEFAL BUILDUPS STRATIGRAPHIC PINCH-OUT STRATIGRAPHIC PINCH-OUT DIAPIR RELATED CLOSURE: DIAPIR RELATED CLOSURE: 3A PIERCED DIAPIRS 3A PIERCED DIAPIRS 3B SEDIMENTS DRAPING OVER DIAPIR 3B SEDIMENTS DRAPING OVER DIAPIR2.0

Sea Level

1JUR A SSI C PL ATF OR

M

NW4.0

2

SE

SEA

BED

RY TIA TER k E SM BAS OU CE ETA CR RA INT Mk US EO C ETA CR ER W LO

3B

3A

TRIASSIC SALT

71


Lead A1 - LC3

A1

10 km LC3 - DEPTH MAP

AREA (oil) VERT. CLOSURE HYDR. COLUMN (max) OOIP POS

17,9 Sqkm 814 meters 350 meters 341 Mbbl 12%

72


The Bid Round

After having determined the technical value in terms of resources and probability of success, we need to assess the economic value of a development project, based on the expected amount of producible reserves. The balance between the expected development and maintenance costs and the expected revenues of the hydrocarbons sale is an indication of the project profitability. This index is called EMV (Expected Monetary Value) The EMV must be positive in order to proceed with the submission of an acquisition proposal to the Decision Maker (Gate GE2) Before doing that, however, we still need to pass through three separate Assurance Reviews:73


Phase 2: Opportunity Evaluation

Opportunities evaluation set-up

Collect additional data

(Volumetrics & Risk)

Perform technical evaluation

PV

(Production profile, CAPEX, OPEX, EMV)

Perform economic evaluation

PRC

Screening & Selection

technical review, project review, and opportunity review!

Opportunities evaluation DSP submission

GE2

Licence acquisition

Only if everithing is ok, then we may proceed with the submission of our proposal to the Gate.74


The Bid Round: application and contractual terms

We said that he Expected Monetary Value (EMV) must be positive to allow the decision to try and acquire the acreage. Another purpose of the economic evaluation is to define the amount of cash bonus offer and the level of commitment we would be prepared to take in order to secure the block. These terms are part of the application which is presented to the licensing government The following slide shows an example of the most common contractual terms75


Exploration Periods & Committments

Eni

76







The Farm-out

The farm-out (and its reverse, the farm-in...) is a commercial agreement between two oil companies whereby one of them, as the owner of a licence, assigns its interest, or a part of it, to the other in exchange for cash and/or other benefits in kind (wells, seismic, etc.) When two companies agree to exchange their interests in two or more blocks, the deal is called cross assignement or swap of assets.

78


Farm-Out : Corisco Block (Guinea)

EQ. GUINEA

GABON

CONGO

79


Location of Prospect Analogs

Blue: dry wells Red: oil well/fields

Alpha N/S/Baja Area mixed/stratigraphic traps 458 MMbbl risked Medium/High risk

Beta, Gamma, Delta stratigraphic traps 1,1 Gbbl High risk

80


Southern Equatorial Guinea Regional Cross Section

81


Southern Equatorial Guinea Play Types

82


Alpha North ProspectALPHA AREA

Main Features Structure related to a toe-thrust anticline with Aptian salt core Main target represented by Senonian ponded turbidites confined along the eastern flank of the structure (age: Lower Senonian?) Cluster type prospect, being 5/1 the main target Water depth: 200 1100 m (700 m av. for target 5/1) Reservoir av. depth: 2750 m ssl

Main reservoir facies

83


Corisco Deep Block Summary

Multiple proven play types / 56 Prospect Targets Large recoverable resources Block expected mean resources 7.4 billion STB Low risk exploration Good fiscal terms / robust economics Seeking partners for comprehensive exploration & development program

84


Farm-out termsCompany X is farming-out 50% of its working interest and is seeking: two partners, for a 25% working interest each a commitment to a defined carried work program (3 NFW + 1 and 3 OUT + 1) cash bonus

X will maintain the operatorship and is not interested in a swap with other exploration blocks

85


The Farm-out

Once again, a sound decision on the course of action must be founded on a technical and economic evaluation of the project. The evaluation activities and the Assurance Review process, as well as the DSP to be produced, are exactly the same we saw before for the bid round: farm-out is by all means an exploration new venture of Phase 2!

But here are also other ways to acquire new acreage

86







The take over and the direct negotiation

Very simply, the take over is a financial operation by means of which a company takes control of another company. This can be achieved either by buying the target company, or by acquiring the majority of its shares on the stock market. Take overs can be friendly (the two companies agree on the operation) or hostile (the target company doesnt wish to be controlled). One example is shown in the following slides

88


Mauritania offshore 2000 licences acreage1730 1700 V-1 1630 Oct-2 Oct-1B 1600 TIOULIT 15301900 N

PSC C1830 BLOCK 6

TANIT 1830 Coppolani-1 COPPOLANI

PSC B1800 BLOCK 5 DEEPWATER

BLOCK 5 SW

TARFAIAT EL MANSOUR

1800

MTO-3BLOCK 4 DEEPWATER

1730

BLOCK 4 SW

Loup de Mer-1

MTO-1 MTO-2

1730 TAMZAC

PSC A1700 BLOCK 3

1700

PSC C0kmBLOCK 2

50km 1600 15301630

1730

Autruche-1 1700

1630

89


Mauritania offshore exploration HistorySeptember 1996

Group lead by HARDMANAugust 1998

Only regional studies and farm-out campaignSell 70 % of W.I.

WOODSIDE BRITISH BORNEOMay 2000

10.359 Km 2D ACQUISITION

WOODSIDE ENI

3.500 Km2 3D ACQUISITION

90


Mauritania offshore exploration HistorySeptember 1996

Group led by HARDMANAugust 1998

Only regional studies and farm-out campaignSell 70 % of W.I. 10.359 Km 2D ACQUISITION 40 2D Leads at different levels 3.500 Km2 3D ACQUISITION 7 2D leads killed 4 + 2 2D leads to be re-evaluated 9 2D leads to be upgraded 4 3D new leads

WOODSIDE BRITISH BORNEOMay 2000

WOODSIDE ENIApril 2001 10/04 - 26/05

CHINGUETTI-1

Chinguetti - 191


The take over and the direct negotiationIn some countries there is also the possibility to obtain exploration acreage from the government as a result of a private deal. In this case the offer and the contractual terms are negotiated privately between the company and the hosting government.Opportunities evaluation set-up Collect additional data Perform technical evaluation PV Perform economic evaluation PRCScreening & Selection

(Volumetrics & Risk)

(Production profile, CAPEX, OPEX, EMV)

In any case, whichever the method for acreage acquisition, the new Opportunities evaluation venture must always be evaluated, reviewed and approved according DSP submission to OPES workflow and procedures.GE2

92







Phase 3: Pre-drill Exploration

Collect/acquire additional data Pre-drill exploration setup License acquisition Perform technical evaluation(Volumetrics & Risk)

PV

Perform economic evaluation(Production profile, CAPEX, OPEX, EMV)

PRC

Portfolio selection

Budget proposal

These activities are described in the Phase 3 of the OPES workflow. The Phase 3, also called Pre-drill exploration, is aimed at defining drillable prospects.LegendKey Activity Preparation Activity Decision

GE3

Gate Assurance



94







3D marine seismic acquisition

96


Sometimes seismic acquisition can be difficult. An example: Mauritania

97


3D Seismic Data

3D seismic acquisition produces a cube of data98


Structural map

N

99







Exploration Project definition and objectivesWhat we are looking for is a peculiar situation, within the basin, where all the necessary conditions for generation, expulsion, migration and entrapment of hydrocarbon have materialized in the right chronological order. This type of geological feature is called prospect. Once the prospect has been firmed up to a sufficent degree of confidence and its economic value has been estimated to be beyond the minimum threshold set by the Corporate, it becomes drillable.

101


B

ALFA

ALFA

ALFA

102


Prospects Location MapENIs LICENCES PRODUCTION LICENCES ENI CONCESSION

OTHER LICENCES

OPEN ACREAGE

GHADAMES BASIN

103


TUNISIA B PERMIT CONTRACTUAL SCHEME AND WORK PERFORMEDYEAREQUITY CHANGES

199119921993199419951996 1997199819992000 20012002 2003200420052006Block awarded to Elf 100% on 14 Dec 1990

ELF leave Group

LASMO farm-in

UTP farm-in Arco buy UTP BP buy Arco

LASMO buy Phillips and Arco shares

ENI takeCONOCO sell to PIONEER overs LASMO CONOCO buy Gulf Canada

Phillips farm-in 50% on 17 Sep 91

Paladin and Gulf Canada Farm in

1EXPLORATION PERIODS FIRST EXPL. PHASE (5 YEARS) 1500 KM 2D SEISMIC SURVEY 1000 KM REPROCESSING 1 WELL (4000m)

2

3FIRST EXT. (1,5 YEARS) SECOND EXT. (2,5 YEARS)

4(2,5 YEARS) 500 KM 2D SEISMIC SURVEY 1 WELL

5SECOND EXPL. PHASE EXT.

6EXT.

7

THIRD EXPL. PHASE (2,5 YEARS) 500 KM 2D SEISMIC SURVEY 1 WELL

8

(1 YEAR) (1 YEAR)NO SEISMIC REPROC 800km

COMMITMENT

WORK PERFORMED

1500 KM 2D SEISMIC SURVEY (1991) 1000 KM REPROCESSING

BORJ EL KHADRA

620 KM 2D SEISMIC SURVEY 544 KM 2D SEISMIC SURVEY (1998) (2001) 611 KM REPROCESSING (97) REPROCESSING REGIONAL 200 KM REPROCESSING (98) DATA (2000)

FINANCIAL COMMIT.

17 MMUS$

7 MMUS$

0,2 MMUS$

7 MMUS$

RELINQUISHMENTOPERATIONS

S= ORIGINAL AREA 5816 Sqkm 1500 KM 620 KM

80% S=4653 Sqkm

*3172 Sqkm

SEISMIC DRILLING

544 KM WELL 1 ENI 25% (Op) ENI BEK 25%, PIONEER 40%, PALADIN 10%, ETAP (carried)

JOINT VENTURE

1 2 3

14-12-1990 13-12-1995 13-06-1997

4 5 6 7 8

13-12-1999 13-06-2002 13-06-2003 13-06-2004 13-12-2006

104


CARBONIFEROUS

SOUTH TUNISIA - SILURIAN ACACUS PLAYAGEUP. MID UPPER LOWER

FORMATION

PLAYS

LwPer

NO DEPOSITION HERCYNIAN EROSION

EROSIONM'RAR

DEVONIAN

TAHARA A. OUENINE A. OUENINE A. OUENINE A. OUENINE

IV III II I

In the North eastern part of GHADAMES Basin the play concept is:

LOWER

OUAN KASA

TADRARTACACUS

UPPER

SILURIAN

C C B A

C

Acacus A depth mapSILURIAN ACACUS PLAY

The oil and gas are trapped mainly in the Silurian Acacus sandstones structural small anticlines and sealed by intra-formational shales.

LOWER

TANEZZUFTHOT SHALES JEFFARA

The base Silurian Hot Shales represent the main source rock and is distributed almost everywhere in the basin

Ord TWT mapORDOVICIAN GAS LAY

UPPER

ORDOVICIAN

BIR BEN TARTAR KASBAH LEGUINESANRHAR

LOWER

oil charging occurred probably by vertical and lateral migration and the gas, generated later, or in the deeper portion of the basin, replaced the oil starting from the lowest levels (i.e. T2 & A9 level).

MIDDLE

105


TRAP Definition (= Ordovician)

TRIAS GRESEUX

FM. CUS AC A . T FM ZUF NNE TA

D. OR

ANTICLINE

Low amplitude anticlines generally small structures

conformable to Ordovician 4way-dip closures

Seismic resolution represents a limit for the correct structural definition of the reservoir facies. Considerable uncertainty remains about the volume of these traps.106


SILURIAN ACACUS RESERVOIR

107


Acacus (silurian) Facies Distribution ModelSHELFAL AREA(HYPOPICNAL FLOW)

MOUTH BAR AREABUOYANT PLUME

Time 1

SEA LEVEL

RIVER IN FLOODTURBULENT FLOW (HYPERPICNAL FLOW) OVERPRESSURED GRANULAR FLOW RAPID DEPOSITION OF GRANULAR FLOW FACIES F10

Time 2

SEA LEVEL

TURBULENT FLOWTRACTION PLUS FALLOUT TRACTION

FACIES F10 a

SHELFAL SANDSTONE LOBE MO UT EA HB L AR AR HELFA Sof k l tens Severa m

AR EA

CORED SEDIMENTARY FACIESTRACTIVE FACIES F1 F2 F3

Tens of m

TRACTIVE-SUSPENSION FACIES F4 MOUTH BAR F5 F5a F6

DENSITY FLOW FACIES F 10 F 10 a

SUSPENSION FACIES F7 SHELFAL SANDSTONE LOBES F8 F9

The Acacus Fm is usually represented by multilayers reservoirs deposited in sub108 aqueous mouth bar and in interlobe/lobe fringe to shelfal environment.


Fig. 4d

2B SEDIMENTARY MODEL

109


Ghadames Basin Source RocksAverage Total Organic Carbon (TOC)

Tanezzuft Fm. (Hot Shale Mb.)

110


Fig. 4f

Acacus A - DepthCI 2 m Datum: SL

Aca A + Tz isopach applied to Ordovician

Alfa prospect

111


Acacus A Top @ 3081 mssl Vertical closure 25m

Spill Area 2.9 km 1 km

Line 1

Acacus A Depth

Prospect Alfa

Li n e2

112


MIGRATION DRAINAGE PATHWAYS

Acacus A is the carrierHIGH LOW

ALFA

113







Prospect evaluationThe process of prospect evaluation is meant to provide the Management with an a priori estimate of the likelihood of the project to generate economic value. Apart from representing the necessary support to take a sound decision on the project itself, the result of the evaluation enables the comparison between different projects competing for funds. To this effect, it is important that the evaluations carried out worldwide are done according to omogeneous criteria and making use of the same tools.115


Prospect evaluation

The economic evaluation of the project is not sufficient to describe its real potential, unless it incorporates two very important elements: risk and uncertainty. The risk is the chance that the prospect will not contain the expected amount of hydrocarbons, whereas the uncertainty relates to the expected volume of resources. Both these elements affect the evaluation and must be correctly estimated and taken into consideration.

116


Prospect evaluationThe first thing we need is the volume of hydrocarbons the prospect could contain. The value we are looking for is called OHIP (Original Hydrocarbons in Place) and represents the total amount of petroleum in the reservoir in case of success. It is calculated with the volumetric formula and, while assessing this element, we need to take into consideration the uncertainty.

117


HOIP

=

A x h x N/G x x (1 WS) FVF

A acreage of the reservoir filled with hydrocarbon h average thickness of the hydrocarbon bearing zone N/G ratio between net pay and gross thickness porosity WS water saturation FVF hydrocarbon formation volume factor118


In exploration this formula is applied in a stochastic way, in order to accomodate the usually large amount of uncertainty deriving from the poor knowledge of the fluid and of the reservoir characteristics. Rather than with a single value, each parameter of the formula is therefore expressed with a range of values, with an associated distribution of probability. For example:

=15 % 35 %119


Various types of probability distributions can be used:Each value within the range has the same probability to be true min max One value such as min

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