Copyright of Shell U.K. Limited
4D seismic and reservoir engineering, best friends or annoying neighbours? – Examples from the North Sea
Mariano Floricich Shell U.K. Limited
1 October 2012
Definitions and Cautionary Note
Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves and SEC proven mining reserves.
Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves or SEC proven mining reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions and includes Oil Sands.
Organic: Our use of the term Organic includes SEC proved oil and gas reserves and SEC proven mining reserves excluding changes resulting from acquisitions, divestments and year-end pricing impact.
Identified Items: This presentation refers to Identified Items which have been excluded from CCS earnings and EPS calculations. Please see page 4 of the Quarterly Results Announcement for a listing of those items.
To facilitate a better understanding of underlying business performance, the financial results are also presented on an estimated current cost of supplies (CCS) basis as applied for the Oil Products and Chemicals segment earnings. Earnings on an estimated current cost of supplies basis provides useful information concerning the effect of changes in the cost of supplies on Royal Dutch Shell‟s results of operations and is a measure to manage the performance of the Oil Products and Chemicals segments but is not a measure of financial performance under IFRS.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell plc. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management‟s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell plc to market risks and statements expressing management‟s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as „„anticipate‟‟, „„believe‟‟, „„could‟‟, „„estimate‟‟, „„expect‟‟, „„intend‟‟, „„may‟‟, „„plan‟‟, „„objectives‟‟, „„outlook‟‟, „„probably‟‟, „„project‟‟, „„will‟‟, „„seek‟‟, „„target‟‟, „„risks‟‟, „„goals‟‟, „„should‟‟ and similar terms and phrases. Also included as forward-looking statements in this presentation is our disclosure of reserves, proved oil and gas reserves, proven mining reserves, resources, and all future estimates of refining capacity, oil and gas production, capital investment and expenditure, cash from operations, dividends, share buybacks and investments. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group‟s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from re-categorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell‟s 20-F for the year ended December 31, 2008 (available at www.shell.com/investor and www.sec.gov). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all.
The term “Shell interest”is used for convenience to indicate the direct and/or indirect (for example, through our 34% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
Date 22/11/2012
Let‟s start with a game...
Two identical boxes
One has half crayon inside
One has a full crayon inside
Question: Which box has the shortest crayon inside? (you cannot open the boxes)
The answer in a few minutes....
1 2
4D seismic interpretation
Building static/dynamic models and interpreting 4D seismic has been moving towards integration of all subsurface disciplines in the last 15 years
4 Date 22/11/2012
4D seismic – Integration is the key
Today subsurface disciplines work closely together to create the best representation of subsurface in a static/dynamic model
5 Date 22/11/2012
Geophysics
Geomechanics
Geology
Geostatistics
Geomatics
Reservoir Engineering
Petrophysics
Production Technology
Geochemistry
Well Engineering
....
Copyright of Shell U.K. Limited
OUTLINE
Introduction to 4D seismic
Back to the game...The answer!
Gannet-F – Big Value from a small field
Draugen – 4D seismic data identifies new infill targets in a mature field
Key learnings / concluding remarks
6 June 2012
Monitor 3D seismic survey Base 3D seismic survey
“4D” time-lapse seismic measures changes in time
(changes in fluids, pressures, temperatures)
Principles of Time-Lapse Reservoir Imaging
Time
Why we do 4D seismic?
Reduce subsurface Uncertainty Drainage patterns Connectivity Compartmentalization Scenario choice
Improved static & dynamic model Better forecasts Better plans
Improve Field performance Better well positions (producers and injectors) Control existing wells to:
increase rates/UR, Avoid water breakthrough Reduce water/gas production
HSE Drill safely into partially depleted reservoir Blow-out monitoring Safe injection monitoring Safe disposal monitoring
Back to the game...
Two identical boxes
One has half crayon inside
One has a full crayon inside
Please, rise your hand if you think Box 2 has the shortest crayon inside
1 2
And the answer is .... Acquire 4D SEISMIC
Intuitively, we try to shake the box (i.e. send some vibrations to the earth) and listen (i.e. record the sound waves).
We do this two times, one for each box (i.e. at different production times)
We look at the difference in the sound to predict which one has the shortest crayon (i.e. look at the sound waves difference to assess changes in the reservoir).
Copyright of Shell U.K. Limited
GANNET-F: Big Value from a Small Field
2.0
13 Mar 2011
Gwilym Lynn, Christian Ellis, Jonathan Brain, Richard Parker, Gerd-Jan Lortzer and Sophie Michelet.
Shell U.K. Limited
UK
Copyright of Shell U.K. Limited
Gannet F
GANNET F LOCATION MAP
14 June 2012
Central North Sea field 180 km offshore Aberdeen Subsea satellite field to Gannet Alpha
platform First oil in 1997
Structural trap
Deep marine turbidite sands
Palaeocene and Eocene aged Forties,
Odin and Tay Sandstone Members
Copyright of Shell U.K. Limited
14 YEARS OF 4D AT THE GANNET CLUSTER
15 22 November 2012
E F
A
G
D
C
B
Seismic History First monitor: Gannet C 1998 Then 99(D), 00(ABG), 04(ABCDG), 06(EF), 08(D), 10(EF), 11(ABCG)
Water Sweep
Copyright of Shell U.K. Limited
GANNET F OVERVIEW
16 June 2012
OWC: 6644 ft TVDSS rim
100 mmstb Oil Initially In Place
Undersaturated Oil
38.9°API
Porosity: 28 % Permeability: 0.3 – 1 Darcy
Strong aquifer
2 producers drilled in 1997 and in 2006
Copyright of Shell U.K. Limited
THE CASE FOR 4D – DERISKING INFILL OPPORTUNITIES
18 Mar 2011
2006 4D Signal GF-02 Production?
Horizontal well with likely protection from bottom water.
Production may have come from South
No target in N w/o 4D confirmation
Saddle area: good quality but thin sands (Forties & Odin).
Production effects likely from GF02
Down thrown blocks.
Originally targeted by GF02
– high sweep risk
Possible target area – high risk of
GF02 production effects
Flank target area – no
understanding of how far
aquifer has moved up dip
Southern area – too small;
possibly isolated
GF02 has been excellent producer but where to drill next ?
Copyright of Shell U.K. Limited
TIME LAPSE SEISMIC DATA OVER GANNET F
19 June 2012
Positioning Repeatability (Dsrc+Drec @ 1000m) for 2006 vs 2010
97 04 06 10
Baseline Production (GF01)
4D Swath Monitor Monitor 2 GF02
Summary
Repeatability good away from FPSO
Steerable streamers helped stay in the „tunnel‟ of acceptable feather and reduced infill to 2 lines
Dedicated 4D PSDM processing sequence for 3 vintages.
Turnaround < 3 months.
Excellent results with NRMS <11%
Triton arrives
Gannet E Gannet F
Triton FPSO
NRMS 1500-2500ms for 2006 vs 2010 0
0.5
repeata
bility
06-10
97-06
97-10
NRMS 10% 20%
100-2
00
0–50
>200
50-1
00
good o
k p
oor
Copyright of Shell U.K. Limited
4D RESULTS
20 Mar 2011
4D Quadrature Difference 2010-1997
W E
GF01
GF02
2006-1997
2010-2006
GF01
GF02
W E
W
E
Copyright of Shell U.K. Limited
4D RESULTS – MAXIMUM AMPLITUDE EXTRACTIONS
21 June 2012
1997-2006 2006-2010 1997-2010
Copyright of Shell U.K. Limited
4D RESULTS
22 June 2012
Southern Reservoirs 4D signal observed in individual
reservoirs. Interpreted to be signal of water
replacing oil. Requires a communication path between
reservoirs.
Forties Odin Tay
Water replacing Oil
Copyright of Shell U.K. Limited
CONNECTIVITY CONCEPTS
23 June 2012
Injectites
Erosional Contacts between Sands
Fault Sand-Sand Juxtaposition
Fault Vertical Conduit Damage Zone Flow
No Vertical Connectivity
4D
HM
DM
4D
HM
DM
4D
HM
DM
4D
HM
DM ?
4D
HM
DM
Forties Formation
Odin Fm
Tay Fm
HM – history match
DM – depositional model
Copyright of Shell U.K. Limited
CONNECTIVITY CONCEPTS
24 June 2012
Fault Sand-Sand Juxtaposition
Number of sand-sand juxtapositions through crestal faults
Provides a simple communication route between reservoirs
Considered the most likely mechanism to connect different reservoirs
Possible to history match
Depth Slice just
above OWC
S N
Copyright of Shell U.K. Limited
HISTORY MATCHING 4D SYNTHETIC SEISMIC
25 August 2011
Measured Synthetic
Copyright of Shell U.K. Limited
SUMMARY
26 June 2012
Time-lapse seismic data has generated significant value and enabled further
development at Gannet F by:
Optimal well placement to drain the main Forties accumulation
Identifying unexpected fluid flow between unpenetrated reservoirs
Inter-reservoir connectivity is interpreted to be dominated by sand - sand
communication through fault juxtaposition.
Integration with static and dynamic models, conceptual geological models
and other geophysical techniques has allowed further infill opportunities to
be identified, specifically targeting the southern reservoir units.
Copyright of Shell U.K. Limited
ACKNOWLEDGEMENTS
27 June 2012
The authors would like to thank the Gannet F field partners: Shell U.K. Limited and Esso Exploration and Production UK Limited for permission to publish.
We would like to acknowledge other past and present Gannet F team members for their contribution to the Gannet F Field Development.
Copyright of Shell U.K. Limited
DRAUGEN FIELD: WORLD-CLASS 4D SEISMIC DATA IDENTIFIES NEW INFILL TARGETS IN A MATURE FIELD
3.0
28 Mar 2011
Ingrid Kullberg, Jabeen Zainuddin, Rasa Venslovaite, Jorrit Glastra, Linzey Cartwright (A/S Norske Shell), Uwe Klein-Helmkamp (Sawarak Shell – formerly A/S Norske Shell), Raed Kawar (Petroleum Development Oman LLC - formerly A/S Norske Shell), Jon Brain (Shell U.K. Limited), Hans Dankbaar (Nederlandse Aardolie Maatschappij B.V.)
UK
Copyright of Shell U.K. Limited
Draugen Field information
29 NPF Kristiansand -March 2012
NPD Fact pages: Production start 1993
Reserves 68 MSm3
Original Field Life 20 years
Jurassic Rogn and Garn sands
Excellent N/G >90%
Good porosity ~30%
Excellent permeabilities 0.5-5 D
Large structure 22x8 km
Central platform wells
+2 subsea producers
Lateral water injection N/S
Aquifer support
Sattelites in west and south
Reserves today 143MSm3
4D played a large role
Water comes in from injection areas to the north and south.
Preferential flooding of the western side of the field compared to Dynamic Reservoir Model
Invalidates original A4 location – relocate – tested 12,200Sm3/day
Seismic difference
1990-1998
Different Dynamic
saturation
difference
scenarios
Updated Dynamic
model resulting in
different well
placement - testing
12200 Sm3/day
1998 – surprises and optimisation
4D seismic 1998-2001 – water progressing
North south balance
Drillling of 2 wells in the west in 2001
Drilling of 2 wells to the south in 2002
32 NPF Kristiansand – March 2012
Seismic difference1998-2001 Dynamic saturations modelled into
seismic1998-2001 Seismic difference1990-2001
4D seismic 2004 and 2009 : small attics forming 2004:
First Undershoot
Main water front continues to move towards the platform
Production in west and south
One well in west 2008
One well in south 2008
EastFlank appraisal not drilled
Seismic difference 2001-2004
Seismic difference 2004-2009
2009:
Platform Undershoot
Main water front closes under the platform
East Flank showing 4D signal
Signal in Garn West
Copyright of Shell U.K. Limited
Reflection Seismic – 1990 data reprocessed in 2009 -
Quadrature of Difference – zero crossings above and below the blue loop are top and base of water flood
34 NPF Kristiansand – March 2012
Top Spekk
Top Rogn
Top Garn
FITTING THE PUZZLE TOGETHER
90-98
98-01
01-04
04-09
90-09
2009: Integration between dynamic model and 4D seismic Use 2001-2009 difference, rather than 2004-2009 signal
As before: Dynamic results converted into Seismic (comparison in the seismic domain)
But now also Seismic into Dynamic as additional constrain
Difference maps
4D seismic inverted fluid volumes –> three maps
35 NPF Kristiansand – March 2012
Seismic difference 2001-2009
Saturation differences modelled into seismic dfferences (no noise) 2001-2009
Seismic difference 2001-2009
Copyright of Shell U.K. Limited
Detailed Well Planning
36 NPF March 2012
Top Rogn Depth
Attic Thickness from 4D Seismic - hot is thick
Quadrature of Seismic Difference 2001-2009 (in time) – blue is water Saturation 2009 from dynamic reservoir model (in time) – hot is oil
Copyright of Shell U.K. Limited
SUMMARY
Must integrate all information
Four monitor surveys –
Each adding information and value
4th essential to attic drilling
Would not drill some of the wells planned for 2013 without it
Thank you to
my colleagues from A/S Norske Shell
and the Draugen license partners Petoro, BP, Chevron and Shell
Key learnings
4D time-lapse seismic has become a frequent tool for reservoir monitoring in the North Sea
Mainly for Paleocene/Eocene deepwater turbidites reservoirs
But also some examples from:
Cretaceous (chalk) reservoirs
Jurassic/Triassic reservoirs
4D time-lapse should become a frequent tool for asset optimization
Impact the right HSE and business decisions at the right time
Integration of all available information is key (easy to say but not always easy to do)
Key learnings: Integration and Close The Loop
We need to start with a good understanding of the 3D static subsurface model
Structure (i.e. Seismic interpretation, depth conversion, geological setting)
Facies and petrophysical properties (probabilistic seismic inversion for properties prediction)
Volumes in place (are those volumes supported by Material Balance?)
Seismic,
horizons,
properties in
time
Seismic,
horizons,
properties in
depth
Static
model
Dynamic
model
(upscaled)
T/Z
Logs CtL
Dynamic CtL
Log data
Structural CtL
Properties CtL
Close The Loops
Key learnings: Fast updates to reservoir models
We need to start with a good understanding of the 3D static subsurface model
Structure (i.e. Seismic interpretation, depth conversion, geological setting)
Facies and petrophysical properties (probabilistic seismic inversion for properties prediction)
Volumes in place (are those volumes supported by Material Balance?)
The challenge is to generate workflows that allow fast and efficient updates of static and dynamic models every time new data arrive (i.e. 4D seismic inversion to update history matched dynamic model)
Acknowledgements
I would like to thanks many of my colleagues at Shell:
Dave Kemshell, Helmut Friesacher, Cees Corsten, Jonathan Brain, Gwilym Lynn, Christian Ellis, Richard Parker, Gerd-Jan Lortzer, Sophie Michelet, Ingrid Kullberg, Jabeen Zainuddin, Rasa Venslovaite, Jorrit Glastra, Linzey Cartwright, Uwe Klein-Helmkamp, Raed Kawar, Hans Dankbaar
Thanks to the Gannet-F and Draugen teams for their contributions
Thanks to the Gannet-F field partners (Shell U.K. Limited and Esso Exploration and Production UK Limited) and Draugen field partners (Shell, Petoro, BP and Chevron) for permission to publish