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Maintaining Seismic-Focused Exploration During Downturn Yields Benefits

A conventional industry approach is to curtail seismic activity during a downturn, focusing on limiting new exploration and drilling production wells instead. This paper demonstrates how maintaining investment in high-quality 3D seismic during the last downturn, together with selective exploration, quality geoscience, application of new technologies, and efficiently maturing discoveries to early cash flow, was successful in sustaining future production while deploying capital efficiently.

Challenge in Oman Block 6

Investment in 3D seismic does not contribute to immediate cash flow and, when funds are scarce, is an early candidate for cost reductions. By mid-2014, the seismic sector was the worst-performing segment in the upstream industry. However, without continued investment in seismic, future exploration success is threatened. This poses a dilemma for energy companies as they balance short-term cash flow with long-term value generation.

Petroleum Development Oman took the opposite approach in the mature Oman Block 6. The company reduced short-term exploration drilling and testing and focused on early production from near-term exploration plays for early monetization to partially fund exploration. It used recently acquired seismic data to pursue highly ranked exploration opportunities. Finally, it sustained investment in, and improved efficiency of, advanced seismic acquisition and processing to improve cost efficiency for future plays.

Nevertheless, success through both oil and gas exploration was achieved. Enhanced short-term cash flow and improved capital efficiency resulted while significant commercial oil and gas volumes were discovered. During 2016–2018, 1.3 billion BOE were discovered, primarily in subtle and stratigraphic traps, and over 22000 km2 of new 3D wide-azimuth (WAZ) seismic was acquired (Fig. 1).

This article, written by JPT Technology Editor Judy Feder, contains highlights of paper SPE 197213, “New Growth in an Old Basin: Successful Implementation of PDO’s Exploration Strategy in a Downturn,” by Nicholas Feast, Salim Rawahi, and Mohammed Mazrui, Petroleum Development Oman, prepared for the 2019 Abu Dhabi International Petroleum Exhibition and Conference, Abu Dhabi, 11–14 November. This paper has not been peer reviewed.
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Maintaining Seismic-Focused Exploration During Downturn Yields Benefits

01 March 2020

Volume: 72 | Issue: 3

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