Deterministic Scenario & Stochastic Approaches

1. Explorationists want to quantify the uncertainty associated

with finding hydrocarbons. They concentrate on basin analysis
or play analysis. For a given prospect, they estimate the
likelihood of an adequate reservoir and trap, and the proximity
of thermally mature source material. Later, they estimate
reserves and their associated cash flows.
2. Drilling engineers examine historic data hoping not only to
estimate normal drilling costs, but also to quantify the risk of
stuck pipe, blowouts, lost circulation, and other problems
encountered while drilling a well.
3. Reservoir and production engineers simulate field sizes,
productivity indices, decline rates, prices, development costs
and operating costs. They work with exploration and drilling
team members to estimate schedules and required capital
investments (for drilling, platforms, pipelines, etc.).
4. Public utility companies that transport natural gas are
concerned with demand and supply matters and the
probability of experiencing peak load, as well as with prices
and costs.

What all these people share when they engage in risk analysis is
a methodology that replaces a number with a probability
distribution.
When we restrict our models so that each parameter takes on
only one value, we call the model deterministic.
When we allow parameters to be represented by random
variables or probability distributions, however, the models are
stochastic or probabilistic.

Determinants of reserve
and
associated geological controls

Megill (1984) suggests the geological success

(PGS) depends on:
1)source rock (PSR),
2)reservoir (PR),
3)migration and timing (PM&T),
4)existence of trap (PT) and
5)presence of a seal mechanism (PS). Then, the
probability of success depends on the
simultaneous occurrence of these variables:
PGS = PSR x PR x P M&T x PT x PS
PS = 0.9 x 0.9 x 0.9 x 0.9 x 0.9 =59.05 %.
Probability of failure (Risk) = 40.95%

Risk Assessment of Petroleum Prospects

Geological risk assessment requires an evaluation
of those geological factors that are critical to the
discovery
of
recoverable
quantities
of
hydrocarbons in a mapped prospect. The
probability of discovery is defined as the product
of the following major probability factors, each of
which must be evaluated with respect to
presence and effectiveness:
1. Probability of reservoir, P1
2. Probability of trap, P2
3. Probability of hydrocarbon charge, P3
4. Probability of retention of hydrocarbons after
accumulation, P4

Some general relationships between data relevance, coverage and quality.

Geological models
and
risk assessment

The probability of the presence of an effective reservoir

rock with minimum properties as assigned in the
volumetric estimate of the prospect, P1, comprises
two components.
1. The first of these is the probability of the existence of
reservoir facies with minimum properties such as
net/gross ratio and thickness.
2. The second is the probability that the reservoir
parameters will be effective in terms of porosity,
permeability and hydrocarbon saturation.

The following work must be performed in order to

evaluate the properties and quality of the prognosed
reservoir rock:
1. Evaluation of all relevant wells in the area with
respect to reservoir depth, diagenesis, porosity,
permeability, hydrocarbon saturation, and the
interrelationships between these parameters.
2. Regional evaluation and facies analysis of the
reservoir rock with respect to thickness, N/G ratio,
threshold porosity and porosity trends with depth,
and hydrocarbon saturation.
3. Seismic facies analysis and sequence Stratigraphy
studies which have a bearing on reservoir prediction
(sandstone, carbonate, etc.) and depositional
environment.
4. In a relatively unknown areas, we recognize
presence of deterministic, stochastic and random

Presence of reservoir facies

Effective pore volume

Trap mechanism
P2, is the product of the probability of the existence of the
mapped structure as a valid geometrical closure, and of effective
sealing mechanism
It is recommended that the following work be carried out before we
assess the probability of an effective trap:
1. Ideally, all surfaces enclosing the reservoir volume (both top and
base) should be mapped. If the reservoir model indicates a
geometrically uniform reservoir body (i.e. parallel top- and
bottom surfaces), it will be sufficient to map the top surface.
2. Establishing a geological model for our definition of the mapped
structure and sealing mechanism (i.e. sealing rocks and faults
must be identified).
3. Spill-point relations must be defined and carefully mapped.
4. Time-depth relations (depth conversion) of the sealing surfaces
must be established (with associated uncertainties).
5. Seismic profiles should be examined with respect to potential
seismic anomalies such as hydrocarbon and lithology indicators.

Effective seal mechanism

The enclosing surfaces of the reservoir volume may be classified
into three different groups (Milton and Bertram, 1992),
depositional surfaces, tectonic surfaces, and facies changerelated surfaces.

Petroleum Charge

P3, is a product of the probability of effective source

rock, P3a, and the probability of effective migration,
P3b.
When performing the volumetric assessment of the
prospect, the potential hydrocarbon charge can be
estimated by the following formula:
Petroleum charge = Effective drainage area x
Average thickness x TOC x Transformation factor x
Expulsion factor (primary migration) x Secondary
migration factor

Presence of sufficient volume mature source rock

Proven
rock
source
Quality
reduced
source
rock
Hypothetical
source
rock
Speculative
Source
rock

Effective Migration

Retention after accumulation

P4, is evaluated given the assumption that the sealed trap was
filled with hydrocarbons at a given point in time.

Hydrocarbon Indicators

A direct hydrocarbon indicator (DHI) is defined as a

change in seismic reflection character (seismic
anomaly) which is the direct result of the reservoirs
fluid content changing from water to hydrocarbons.

Oil seepage, pockmarks at sea-bottom, gas anomalies in seismic

data etc., are all indicators of hydrocarbons being present.

Probabilities of oil or gas

Prospects are independent

We have mapped 5 prospects, with probabilities of

discovery equal to P1, P2, P3, P4, and P5 respectively.
If we assume that these prospects are independent
(i.e. from different plays), then the results of drilling
any one prospect will have no impact on the
probabilities of making a discovery in the other four.
Prior to any drilling activity, the probability of
discovery in at least one prospect will therefore be:
P = 1 - ((1-P1) (1- P2) (1- P3) (1- P4) (1- P5))

Interdependency between prospects

The result of the drilling of any one prospect (discovery or
otherwise) will impact on the probability of making a discovery in
all of the other prospects. we must separate the probability
factors into those which are common to all prospects (factor
P(S)), and those which are independent (factors P(X|S)).

P(X) = P(S) x P(X|S)

Multiple reservoirs

If A-reservoir is present, and there is a discovery at

that level, there is a very good chance of making a
discovery in the B-reservoir and a reasonable
chance of making a discovery in the C-reservoir.
All other factors other than reservoir are common

A play is defined as a group of prospects within a

geographically delimited area, where a set of mutually
related geological factors must be present concurrently in
order to permit the discovery of hydrocarbons.

The geological factors are typically reservoir rocks, traps,

mature source rocks and migration paths, plus the
condition that the traps were formed before the migration
of hydrocarbons ceased.

A useful approach to play definition is to prepare

play maps for all those factors that are anticipated
to define the play.
Such maps may illustrate
1. reservoir facies,
2. porosity- and/or permeability changes,
3. the presence and maturity of source rocks;
4. areas of effective migration,
5. effective traps and seals,
6. together with areas favorable for effective
retention of hydrocarbons.

The marginal play probability is common for all

prospects in a given play and hence talk of
interdependency between different prospects.
The chance that at least one field of at least
minimum size exists in the play.
The conditional prospect probability is similar to
the product of the independent probability
factors
The chance that the prospect would hold a field
of at least the minimum size on condition that
the play were regionally successful

FULL
example,
proven play

dependency

Proven play
1. Geologic Setting: Deepwater fan in a proven play.
2. There is a 30% chance that the reservoir was deposited at
A.
3. If the reservoir is proven at A, then the chance at B will
improve to 67%.
4. The reservoir cannot be deposited at B without also being
deposited at A.
1. What is probability that sand reached A? 30%
2. What is the probability that sand reached B, given that it
reached A? .2/.3 = 67%

Partial dependency
example, Proven play

1. What is probability that the

system was deposited? 50%
(must be risked separately)
2. Given that it was deposited,
what is the chance that it is
present in A? .3/.5 = 60%
3. Given that it was deposited,
what is the chance that it is
present in B? .2/.5 = 40%

1. Geologic
Setting:
Channe
system in a proven play.
2. There is a 50% chance that
the channel was deposited in
this area.
3. It is more likely to be at A
(Channel axis) than at B
(channel margin)
4. Due to the sinuosity of the
channel, it could have been
deposited at B without being
deposited at A. Or it could
have been deposited in the
area, but at neither A nor B.

FULL INDEPENDENCE example

1. Two independent sand systems: Miocene channel and

Pliocene fan.
2. There is a 20% chance that the channel was deposited at B.
3. There is a 30% chance that the fan was deposited at A.
4. Structure formed in the Pleistocene.
1. What is chance that the fan was deposited at A? 30%
2. What is the chance that the channel was deposited at B?
20% Shared Probability

Independent Petroleum Systems

An independent petroleum system is defined as a

continuous
body
of
rocks
separated
from
surrounding rocks by
1. regional barriers to the lateral and vertical migration
of liquids and gases (including hydrocarbons), and
2.

within which the processes of generation,

accumulation, and preservation of oil and gas are
essentially independent from those occurring in
surrounding rocks (Ulmishek, 1986).