The Quest

for Energy
Rewarding Careers in
Petroleum Exploration

JMA
 Petroleum Exploration’s
Challenge
Interpreting the Unseen

• Surface Geology
- Aerial photos
- Geologic maps

• Subsurface Analysis
- Gravity
- Magnetics
- Seismic reflection
- Wells

JMA Silicon Graphics

The Goal - ‘Black Gold’
Petroleum Supplies our Energy Needs

Light Texas Crude Heavy Texas Crude

Palo Pinto Field Humble Oil Field
North Texas Southwest Texas

JMA
What is Petroleum?

• Petroleum: a natural yellow-to-black flammable

liquid hydrocarbon found beneath
the earth’s surface
• Hydrocarbon: an organic compound made up
of carbon and hydrogen atoms

JMA
Petroleum Products
A Barrel of Crude Oil Provides:

Gasoline - 19.5 gallons

One Barrel =
42 gallons Fuel Oil - 9.2 gallons

Jet Fuel - 4.1 gallons

Asphalt - 2.3 gallons
Kerosene - 0.2 gallons
Lubricants - 0.5 gallons
Petrochemicals,
other products - 6.2 gallons
JMA American Petroleum Institute, 1999
Petrochemical Products
More Than 3,000 Products

• Detergents - Cosmetics
• Fertilizers - Weed Killers
• Medicine - Antiseptics - Anesthetics
• Plastics - Synthetic Fibers
• Synthetic Rubber
• Rust Preventatives
• Liquid Petroleum Gas

JMA American Petroleum Institute, 1999

World Fuel Consumption: 1970-1994
Oil
Natural Gas
8,000 Nuclear Energy
Hydroelectricity
7,000 Coal
Million tonnes oil equivalent

6,000

5,000

4,000

3,000

2,000

1,000

0
1978

1984

1994
1970

1972

1974

1976

1980

1982

1986

1988

1990

1992
JMA Year Cook and Sheath, 1997
Population-Driven Energy Demand
World Primary Energy
World Population Consumption
(Millions) (Quadrillion BTU)

10,000
500

8,000

6,000 400

4,000

2,000 300

0
1500 1700 1900 2100 1975 1985 1995 2005 2015
JMA AAPG Explorer, 8/95
Energy Usage: 1750-2000
An Energy Dependent Society ?
Internet
Micro-processor
Environmental issues
Modifiers
Satellite
ar
WWII
WWI cle
Energy Usage

Telecommunications Nu
rbons
Hydroca
Living
Coal standards

Steam Steam Power Air Population Global

locomotive stations travel growth markets

Internal combustion engine

Drivers
1750 1800 1850 1900 1950 2000
JMA Cook and Sheath, 1997
 Projected orld
W Energy Supplies
Careers in
Oil & Gas Hydroelectric
1993

New Technologies
Remain Important
100
100 BILLION
BARRELS Solar, Wind
Geothermal
80
Billion World Energy Demand
Barrels Nuclear Electric
of Oil Coal
Equivalent60
per Year
(GBOE) Natural
40 Gas

Fossil Fuels
Decreasing
Crude Oil
20

1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 3000
024839-2
after Edwards,
24929
JMA AAPG 8/97
 GlobalExploration
Global Oil and Gas Fields

Gas
Oil

JMA
 US Hydrocarbon
Occurrence
Largest 25 Oil Fields
by Ultimate Recovery
JMA
 Impact on Students
Linkage of Petroleum Industry and Geoscience Students
60 120

50 Petroleum Engineer 100

Graduates
40 Oil Price (Colorado School of Mines) 80
(1996 dollars/barrel)
$/Barrel

30 60

20 40

10 20

0 0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990
Year Colorado School of Mines and
US Department of Energy, 1997
JMA
 Worst Case Employment Scenario
1,600,000

1,400,000

1,200,000 Global Energy

Total Number Demand will
of Petroleum 1,000,000 Counter Trend
Industry
Employees 800,000
(FRS Companies)
600,000

400,000

200,000

1974 1979 1984 1989 1994 2000 2005

Arthur L. Smith, CFA - Abilene, Texas, 1996
JMA
 Geoscience Demographics
For a Typical Major Oil Company

Age Brackets for Geoscientists Worldwide (2008*)

300

255
250

200 191
153 Gone Fishing
150 140

100
76
50
23
3
0
>25 26-29 30-34 35-39 40-44 45-49 50-54 55-59 60+
Age (YRS) *with normal attrition and
JMA no replenishment
 Optimistic Long-range Trends for
Geoscience Employment
Total Employment Continues to Grow
40
AAPG

30
d
Tren
A P G AGU
Membership
Membership A
(1000s) 20 GSA

10
SEPM
SEPM Trend
0
1960 1970 1980 1990
after Marcus Milling - AGI, 1995
JMA
 Geoscience Theses and Dissertation
opics
T
1950s versus 1980s
8
8
Environmental
Environmental 1
1
2
2
Economic
Economic Geology
Geology 6
6
7
Geochemistry 7
Geochemistry 7
7
Geophysics
Geophysics 5
5 4
4
Igneous/Metamorphic 3
3
Igneous/Metamorphic 2
2
Stratigraphy-Paleo 1
1
Stratigraphy-Paleo 3
3
Sedimentary 4
4
Sedimentary Geology
Geology 5
5
6
6 1950-59
T
Tectonics
ectonics 8
8 1980-89
Other 9
Other 9
9
9
0
0 1000
1000 2000
2000 3000
3000 4000
4000 5000
5000 6000
6000 7000
7000
Number of
Theses and Dissertations
Marcus
Marcus Milling
Milling
AGI,
AGI, 1996
1996
024583
JMA
 US Geoscience Student Enrollment
40,000
40,000

Undergraduate
30,000
30,000
Arab-Israeli
Arab-Israeli
Number
Number War
War
of
of Majors
Majors
20,000
20,000
US
US Govt.
Govt.
Price
Price
Controls
Controls Graduate
10,000
10,000

0
0
1955
1955 1965
1965 1975
1975 1985
1985 1995
1995
Marcus
Marcus Milling
Milling
AGI,
AGI, 1993
1993
JMA 024583
 Supply
Bachelor
’s Degrees, 1970-1994
800,000

659,495
600,000

Degrees
400,000
Granted
244,348
200,000
94,826
88,906

0
Physicists GeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Job Competitiveness
1970-1997 BS Degrees/1997 Jobs
8

6
5.6
4.7
Persons
4
per Job
2.5
2 1.9

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Employed Outside Initial Discipline
1970-1997 BS Degrees/1997 Jobs
100
82%
79%
75
60%
48%
Percent 50

25

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Demand
Employed Natural Scientists, 1997, USA

140,000
118,000

100,000 97,000
Working
Scientists
60,000
46,000

20,000
20,000

0
Physicists GeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Job Competitiveness
Years to Replace Currently Employed Scientists
20

17.2

15

Years 10.3
to 10
Replace

5
5
2.5

0
Physicists GeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Compensation
Average Salary – Bachelor
’s Degree, USA
40,000

30,000 ??? $ 27,900 $ 29,300

Dollars $ 22,900
per
Year 20,000
Year
(1997)

10,000

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Compensation
Average Salary – Bachelor
’s Degree, USA
40,000

30,000 ??? $ 27,900 $ 29,300

Dollars $ 22,900
per
Year 20,000
Year
(1997)

10,000

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Geoscience Careers
Survival
Training

• Strong basic-discipline training

• Constant updating and expansion of
skills and knowledge
• Competitive-edge in several skills
– Quantitative
– Workstation (computer)
• Excellent communication skills
– Oral, written, graphical
24619
JMA
 Cyclic
Cyclic JobJob Market
Market
Typical of Today’s Global Industries

on

?
ti
ic
ed

?
Pr

?
y
Employment os

?
R
(number of
jobs) Retrench
Retrench
w th
th
ro w
G ro

h
CCr
hh

rt
G

raa
r
irtt

bi
bbi
sshh
e

Re
RRe

Time

024658
JMA
 Cyclic
Cyclic Job
Job Market
Market
Continuous Learning Facilitates Timely Changes

on
ti
ic

?
ed

??
Pr
y

??
os Timely Timely
R
Change Change

??
Employment
(number of
jobs) Retrench
Retrench
th
w

C
B
A
ro

Cr

e
hh
e

e
G

lin
t
li n

l in
r
as
r
i
bbi

ip
ip

ip

e
e
h

sc
sc

sc

RR

Di
Di

Di

Time

024658
JMA
 Geologic
Mapping and Sampling
• Gravity • Seismic Reflection
• Magnetics • Geologic Mapping

JMA
JMA American Petroleum Institute, 1986
 Career Paths
Management/
Technical ?
Domestic/
Overseas
Exploration/
Producing
Research/
Lat Operations
era
lM
obi Transfers/
lity
One Site

JMA
 Geoscience Professional Development
For a Typical Major Oil Company

Opportunities
in Other
Areas:
Planning Integrator
Management
Generalist etc.

Succession
Broadening Assignments
Planned
Entry Training Development Mentored Consultant
Level Assignments by Experts
Formal
Mentoring Mentors Mentors others
others
Specialist

Technical
Specialist

Experience
JMA
Geologic Data Analysis

JMA Mobil
 The Petroleum Geologist - A Detective

• Predicts where oil and gas occurs by ‘remote sensing’

• Uses tools to gather data - gravity and magnetics
rock distribution and properties
geophysical imaging
computer processing
& visualization

• Uses concepts to develop models:

Anticlinal theory and petroleum systems
• Makes economic analysis and recommends drilling

JMA
 Core Calibration for
Petrophysical Analysis
JMA Mobil
 Computer Simulation
and History Matching

JMA Mobil
 Exploration and
Industry
Industry Geoscience
Geoscience Careers:
Careers: Producing
• Geophysics
Geophysics • Structural Geology
– Provides
Provides anan image
image ofof the
the – Provides an understanding of the
subsurface
subsurface and data useful for process of deformation of the
predicting
predicting rock
rock type
type and
and the
the
occurrence subsurface due to external forces.
occurrence of of petroleum.
petroleum.
• Regional
Regional Geology
Geology • Stratigraphy
– Provides
Provides anan understanding
understanding of of – Provides an understanding of
which
which areas
areas are
are productive,
productive, why
why processes creating sedimentary units.
they
they are
are productive,
productive, and
and where
where
else
else we
we should
should look.
look. • Geochemistry
• Basin Modeling
Modeling – Chemistry of petroleum and its
– Quantitative
Quantitative integrated
integrated models
models of
of sources to characterize the type,
the
the petroleum
petroleum system:
system: source,
source, history and origin of petroleum.
reservoir,
reservoir, seal,
seal, hydrocarbon
hydrocarbon
charge.
charge. • Reservoir Characterization
– Describes the flow characteristics and
attributes of subsurface reservoirs for
enhanced exploitation.
JMA
 Field Mapping and Literature Distillation
Regional Geology: Computer Modeling of Paleogeography
Regional effort is focused on identifying
potentially effective petroleum systems
Paleogeography

Petroleum
Systems

Geographic
Opportunity

Exploration Plays
JMA
 Regional Geology
Basin Modeling: Fluid Flow and Geochemical Kinematics
Basin Modeling is a key component in understanding Petroleum Systems

Results
Components ?
?
?

Improved
cycle
Faults time
12
11 1
3D Miscible 10 2
1 2 3 4 9 3
8 4
7 5
6
Scale

Model
JMA
 Case Histories: Outcrop and Seismic
Structural Geology: Modeling: Physical and Computer
Stratigraphic Consequences
Understanding the process of deformation of the subsurface due to external forces

Seismic
Interpretation

Physical Models

3D Kinematic
Model Building

Physical Models as Guides Oblique Slip Model

JMA to Interpretation
 Structural Geology
Faults as Seals and Conduits: Fluid Flow
Seeking an understanding of petroleum migration

k k
Model
Stress Diagenesis k = f (s ,T,X)
k
Experiments
s
ie ld
F 1 2 3 4
t r e ss
S

Scaling Laws

Modeling Algorithm

Super Computing - Sandia Field Test

JMA Field Work
 Depositional Systems
Stratigraphy: Sequence Stratigraphy
Petrophysics and Paleontology
Understanding the processes creating sedimentary units

Clastic Sedimentary Record missing due to

MESOZOIC
CENOZOIC
erosion:

&
Must reconstruct history
from regional data
Shale/Wet Sand

Top of Gas Sand

Base of Gas Sand

U

Rock Physics PERMIAN Upper

Permian

PENN.M

L M-U
Forward MISS.
CARBONIFEROUS Pennsylvanian

Modeling Carbonate
Analogues
JMA Sedimentary Modeling
 Paleogeography and Biological Systems
Clastics:
Clastics: Depositional Systems and Stratigraphy Source
Reservoir, Seal and Burial History
Example: Coaly Source Rock Predictions

Mahakam Delta
Petroleum
System 0o 20’N
Coaly Source Rocks

Modern
Mahakam
Delta

Panca-1

eo
Bo
rn Perintis-1

ai t r
Str assa
0 20km

s
k
Ma
JMA
 Sedimentology and Diagenesis
Fluid Flow
Carbonates:
Carbonates: Computer Simulation

Case History Future Opportunities

?
? Middle East
Former Soviet
Union
?
? Pacific Rim

Upper
Permian
• Age Based Models
• Hierarchy of Stratigraphic Scales
M-U
Pennsylvanian

JMA
 Inorganic and Organic
Exploration Geochemistry: Sedimentology
Characterizing the type, history and origin of petroleum

Predict Oil Quality

Gas
Determine Lite
Heavy Oil
Gamma Density Resistivity Age of Oil
Oils
Rate
Generation
......................................................................... .... .
. .............................. ...........................
. . . ... . . . .. . . ....... . . ..
.............................................................. .. ...........
100 my 0 my
Coaly
Source Model Source Rock Prediction
Leakage

Accumulation

Seal Sequence
Reservoir
Petroleum
Migration Stratigraphy
Petroleum
Charge

Source Rock

Migration Pathways
JMA
 Sedimentology
Fluid Flow
Reservoir Characterization: Computer Simulation
Reservoir Characterization focuses on data integration to model
reservoir architecture and flow properties

CUM
PROD

TIME

Seismic visualization Interpretation aids

Resistivity modeling Fracture characterization

Outcrop studies Production data inversion

Geostatistics Optimization
Upscaling QUANTIFIED UNCERTAINTY

Volumetric
Volumetric and
and reserve
reserve Reservoir
Reservoir
estimation Geosteerin
Geosteerin simulation
estimation simulation
JMA g
g
 Geochemistry of Hydrocarbons,
Producing Geochemistry: Fluid Flow, Sedimentology
Correlation of hydrocarbon types to define reservoir connectivity
Type 3
Product
Buffer
Hydrocarbon Occurrence ?
Type 2

Equilibrium
Type 1 Mass System
Mass
In Out

Project Goals: Kinetic Models

Predicting Reservoir Continuity Heat
Transfer
Predicting HC Quality
Modeling Frac & Remediation
Training
Training

Condensate
Waxy
Normal Oil

13
c
Biodegraded
Applications:
Exploitation / Development
Geochemistry Producing
JMA
 Compressional
Aerial Photo
Mountain Range Traditional Tool
with Improved
Resolution

Thrust Zone

Alluvial Fan

• Aerial photo for

mapping patterns
Thrust Zone Alluvial Fan • Field check for
geological detail

JMA
 3D Seismic Image - Submarine Fan
New Tools Better Data Improved Understanding
1
Confined
Flow

Hummocky Channel Levee

1
2

2
Lobate Mound
Less
Confined 3
Flow
3

Sheet-Form Fan
JMA Armentrout et al.,
al., 1996
 Prospect Mapping using 3D Seismic
TWTHorizon RMS-amp TWTHorizon
interval

Sequence Boundary Sequence Boundary

Overlay of Reservoir on Structure Stratigraphic Interval for Reservoir

Confined Flow

Less
Confined
Prospects Flow

0 5 km N 0 5 km N
JMA
3D Seismic Image of Channel Sand
Calibrated by Neural Network Analysis of Petrophysical Data
4900
1400
4800
1500
4700
4600 1600
3500
1700

4000 1800
Depth (ft)

4500 1900
3500
5000
4000
5500
4500
6000
5000
6500
1200 5500

1300 6000

1400 6500

1500 5100
5000
1600
VoxelGeo Display 1700
4900
4800
1800 4700
JMA 1900 4600
Monson, Mobil, 1998
 Petroleum System, Play Definition, and Risk
Trap
Play Maps
Source
Seal Extent Timing Sheets
Extent
Generation and Migration Time Present
Components
HC Charge
Reservoir
Extent Preservation

Critical Reconstruction

Present Past
JMA Jeff Brown, Mobil, 1999
 Petroleum System Definition
The essential elements and processes and all
genetically-related hydrocarbons that occur in
petroleum shows, and accumulations whose
provenance is a single pod of active source
rock.
Elements
Source Rock Processes
Migration Route Generation
Reservoir Rock Migration
Seal Rock Accumulation
Trap Preservation

JMA
 Deer-Boar Petroleum System
at Critical Moment
250 Ma
Raven

A Marginal
A’
Owens
Teapot

k
oc
ir R
rvo
Pod of Active Big Oil

se
Source Rock Just

Re
Hardy Lucky

David

Immature Source Rock

Zero Edge of
Reservoir Rock
Magoon and Dow, 1994
JMA
 Petroleum System at Critical Moment
Critical Moment = Time of Expulsion/Migration

GEOGRAPHIC EXTENT OF PETROLEUM SYSTEM

A Trap 250 Ma Trap Trap A’

STRATIGRAPHIC
EXTENT OF
PETROLEUM SYSTEM t
en
e m
s
Ba
Essential Overburden

Sedimentary
elements of

basin-fill
Seal
POD OF ACTIVE petroleum
SOURCE ROCK system Reservoir
Source
Petroleum accumulation Underburden
Top of oil window
Bottom of oil window
Location for burial history chart

JMA Magoon and Dow, 1994

Present-Day Petroleum System

GEOGRAPHIC EXTENT OF PETROLEUM SYSTEM

Present-Day
A Trap Trap Trap A’

STRATIGRAPHIC
EXTENT OF
PETROLEUM SYSTEM

e nt
sem
Ba
Overburden
Seal
Petroleum accumulation Reservoir
Top of oil window
Source
Bottom of oil window
Underburden

Magoon and Dow, 1994

JMA
Oil and Gas Fields of
Deer-Boar Petroleum System
Inventory of Accumulations

API Cumulative oil Remaining

Field Date Reservoir Gravity production reserves
Name discovered rock (oAPI) (x106 bbl) (x106 bbl)

Big oil 1954 Boar Ss 32 310 90

Raven 1956 Boar Ss 31 120 12
Owens 1959 Boar Ss 33 110 19
Just 1966 Boar Ss 34 160 36
Hardy 1989 Boar Ss 29 85 89
Lucky 1990 Boar Ss 15 5 70
Marginal 1990 Boar Ss 18 12 65
Teapot 1992 Boar Ss 21 9 34

Magoon and Dow, 1994

JMA
 Burial History Chart
400 300 200 100

Overburden
Depth (Km)

Reservoir
Lithology

Source
Rock

Seal
Paleozoic Mesozoic Cen.
Unit
D M P P TR J K P N

Thick 1
Fm
Generation

2
Placer Fm
George Sh
Top oil window Boar Ss
Top gas window Deer Sh 3
Elk Fm
Magoon and Dow, 1994
Critical Moment
Time of Expulsion and Migration. (Trap must already exist)
JMA
 Petroleum System Events Chart
Timing of Elements and Processes
400 300 200 100 Geologic Time
Scale
Paleozoic Mesozoic Cenozoic
Petroleum
D M P P TR J K P N System Events

Rock Units

Source Rock

Elements
Reservoir Rock

Seal Rock
Overburden Rock

Processes
Trap Formation
Gen/Migration/Accum

Preservation

Critical Moment
Critical Moment
Magoon and Dow,
1994 Time of Expulsion and Migration. (Trap must already exist)
JMA
 Petroleum
PetroleumSystem
System Elements
Elements

Anticlinal rap
T
Top Seal Rock
(Impermeable)
Reservoir Rock
(Porous/Permeable)
Potential
Migration Route

Source Rock
(Organic Rich)

24803

JMA
Petroleum System Elements
• Source Rock - A rock with abundant hydrocarbon-prone
organic matter
• Reservoir Rock - A rock in which oil and gas accumulates:
- Porosity - space between rock grains in which oil
accumulates
- Permeability - passage-ways between pores through
which oil and gas moves
• Seal Rock - A rock through which oil and gas cannot move
effectively (such as mudstone and claystone)
• Migration Route - Avenues in rock through which oil and
gas moves from source rock to trap
• Trap - The structural and stratigraphic configuration that
focuses oil and gas into an accumulation
JMA
The Origin of Petroleum

Organic-rich Thermally Matured

Source Rock Organic Matter Oil
JMA
Source Rock for Petroleum
Organic- Thin
Rich Laminae Measured Values
Total
Organic Hydrogen
Carbon Index
3.39 378

Pyrolytically
In-Place Generated
Petroleum Petroleum
S1 S2
2.24 12.80
1 Inch
LOMPOC Quarry Sample
Monterey Formation, CA

JMA
 Kerogen Types

TOC 2.12 WT.% TOC .38 WT.%

JMA
Types of Petroleum

Oil and gas are formed by the thermal

cracking of organic compounds buried in
fine-grained rocks.

Algae = Hydrogen rich = Oil-prone

Wood = Hydrogen poor = Gas-prone

JMA
 Reservoir Sandstone
Good Porosity = Lots of Space for Petroleum

Pores
(blue)

JMA
Reservoir Sandstone
Pore-Filling Cement Reduces Quality

Cement
(pink)

= Less Space for Petroleum

JMA
 Traps

• Anticlinal - Rock layers folded into a dome

• Stratigraphic - Rock layers changing from a good
reservoir to non-reservoir due to change in rock
type (pinch-out), reservoir quality (diagenesis),
or removal (erosional unconformity)
• Fault - Offset of rocks such that oil and gas
accumulates in reservoir rock

JMA
Hydrocarbon Trap Types

Anticline
Fault
Salt Dome

Pinchout

Unconformity

JMA American Petroleum Institute, 1986

Seismic Imaging of Anticline
Vibrator Truck
Recording Truck (Energy Source)
Geophone
(Receivers)

Returning
Sound Waves

American Petroleum Institute, 1986

JMA
 Seismic Image of Anticline

1000
Milliseconds

2000

3000
1 km

JMA
 Seismic Imaging
3D Marine Data Acquisition

JMA Silicon Graphics

 3D Seismic Image - Submarine Fan
New Tools Better Data Improved Understanding
1
Confined
Flow

Hummocky Channel Levee

1
2

2
Lobate Mound
Less
Confined 3
Flow
3

Sheet-Form Fan
JMA Armentrout et al.,
al., 1996
 East Texas Oil Field (1930)
Unconformity
Trap
West East

Sea Level
1,000 Reservoir
2,000 Seal
Seal unconformity
3,000

120°F

Largest
• “lower-48” field Kitchen
More
• than 5 billion barrels recoverable
American Association of Petroleum Geologists, 1990

JMA
 Prudhoe Bay
Prudhoe BayOil
OilField (1968)
Field (1968)
Anticlinal/Unconformity
Anticlinal
Combination Trap
Trap
South North
Brooks Beaufort
Range Sea

Sea Level

10,000
Seal
unconformity Reservoir
20,000 120°F
Barrow
Arch
30,000
Kitchen

• Largest North
American field
• More than 8 billion barrels recoverable
American Association of Petroleum Geologists, 24803
1990
JMA
 Petroleum System Processes
Petroleum System Elements

Gas
Cap
Oil
Entrapment Seal Rock
Accumulation Water
Reservoir
Rock

Migration
120° F
Source Rock
350° F
Generation
24803
JMA
 Petroleum System Processes
• Generation - Burial of source rock to temperature and
pressure regime sufficient to convert organic matter into
hydrocarbon
• Migration - Movement of hydrocarbon out of the source
rock toward and into a trap
• Accumulation - A volume of hydrocarbon migrating into a
trap faster than the trap leaks resulting in an accumulation
• Preservation - Hydrocarbon remains in reservoir and is not
altered by biodegradation or “water-washing”
• Timing - Trap forms before and during hydrocarbon migrating

JMA
 Thermal Maturation History
Less Hydrogen More Hydrogen

Diagenesis K Kerogen
Ro = 0.5% Onset of Oil
Generation
K

Oil Gas

Burial to K1

Greater Catagenesis Oil Gas

and Hotter K2
Depths Oil Gas

K3
Oil Phase- Con Gas
Ro = 2.0% Out d
K4

Gas
Metagenesis

JMA Horsfield and Rullkotter, 1994

 Petroleum System Events Chart
North Slope, Alaska
400 300 200 100 Geologic
Time-Scale
Paleozoic Mesozoic Cenozoic
Petroleum
D M P P TR J K Pe N System Events
Source Rock
Reservoir Rock
Seal Rock
Overburden
Trap Formation
Generation, Migration,
and Accumulation

Preservation
1. Western North Slope
2. East-central North Slope 1 2 Critical Moment
Bird, 1994
JMA
 Petroleum System: Timing is Critical
Trap Must Be Available Before/During Migration
Trap

Accumulation
Processes: Generation Migration and Preservation

Source Migration Reservoir

Elements: Rock Avenue and Seal
JMA
 Petroleum System
A Dynamic Entity
1) Early Generation Spill Point
Spill Point

Seal Rock
Reservoir Rock (Mudstone)
Migration from (Sandstone)
‘Kitchen’
Gas beginning to
2) Late Generation displace oil

Displaced oil
accumulates
Gas displaces all oil

JMA
 Quantitative Play Analysis
Statistical Estimate of Chance for Success
1.0
Probability of Finding

Most
Probable
Field Size

Sp
Ris ec
ked ula
Pot tive
ent Po
ial ten
tia
l

0 5000
JMA
MMBOE
 Exploration Costs: 1999
Seismic Surveys
Alaska North Slope Gulf of Mexico
$50,000/mile
2D $70 - $150/mile

3D $25,000 - $80,000/9mi2

3D Proprietary $250,000 - $400,000/9mi2

Wildcat Wells
Alaska North Slope Texas Gulf of Mexico
Offshore Onshore Onshore Shelf Slope Deep-Water

$30 Million $16 Million $7 $12 $25 Million $40 Million

Million Million
January 1999 Estimates
JMA
 Cost of Drilling Rigs
Offshore Onshore
Daily Rig Cost
1998 $90,000
1999 $40,000 Daily Rig Cost
(Single year contract)
1998 $60,000
1999 $30,000
Ultra Deep (Single year contract)
Daily Rig Cost
1998 $180,000
1999 $180,000
(Five year contract)

JMA
 Different Ways
Industry Pays for Drilling Rights
• Rental - Annual fee for land use while exploring
• Bonus - One-time lump sum paid upfront for
right to explore
• Royalty - Percentage payments of oil and gas
value produced
• Tax - Governmental ‘fee’ on product value
produced

JMA
 Drilling
DrillingRig
Rig Crown
Crown Block
Block

Mud
Mud Hose
Hose Traveling
Traveling Block
Block
Kelly
Kelly Hook
Hook
Rotary
T
RotaryTable
able
Mud
Mud Pump
Pump Swivel
Swivel

Draw
Draw W
orks
Works
Casing
Casing
Casing
Drill Pipe
Drill
Drill Pipe
Pipe
Bit
Bit
Bit
JMA 24803
 Drilling

Rock Bit Cuttings Core (Diamond) Bit Core

JMA
 Directional Drilling Avoids Surface Hazards

Gas

Oil
Water

American Petroleum Institute, 1986

JMA
 Biosteering
North Sea - Joanne Field - Andrew Reservoir
Value added
MD (Entry Point to TD) = 3055’
Net Reservoir Sand = 1023’
Net/Gross = .33
$12MM
Based on saved costs
We

9600
ll P

Microfacies A
ath

Microfacies B
TVDSS
(ft) Andrew A
Microfacies C
1 Sand
9700

Modified from
Holien and Holmes, 1994
9800
0 1000 2000 3000 4000

JMA
Horizontal Distance (ft)
 Log Analysis for Flow Unit Determination
RockType Log Recognition Property
Relationships

Lagoonal
K

Shoreface
K

Lower
Shoreface K

JMA
 Downhole Drill Stem
Drilling Fluid

Tester Valve

Sample Chambers
Tool for
testing
Packer formation
Formation Fluid
(Oil, Gas, Water)
fluid
Pressure Recorders

American Petroleum Institute, 1986

JMA
Christmas
Tree
Pipeline to
Flow
Process
Completed Oil Well
and
Storage
• Water Drive - Hydrostatic
Surface
Casing pressure pushes oil and gas
Cement to surface
Intermediate
Casing
• Gas-Cap Drive - Expansion of
Cement
Production
gas under pressure pushes oil
Casing
to surface
Tubing
Completion
Fluid
• Dissolved-Gas Drive - Gas
Packer Cement
disseminated in oil; usually
Oil or Gas Zone
requires pumping
Well
Fluids Perforations

JMA American Petroleum Institute, 1986

 Producing Wells

Secondary Injection
Recovery Wells
Of 60% Remaining
in Reservoir

Water
Gas Pumped into the
Steam reservoir to force
additional petroleum
Chemical
out of the pores in the
Fire reservoir rock
JMA
 Transporting Petroleum

Offshore
Oil Field Platform

Tanker
Oil Field
Pipeline Refinery

Pipeline

Consumers
Local Railroad a
Tnk Cars
Tank T
ruck Distributor
Mobil
Mobil

Industrial
Customers
JMA 24803
after World Book Encyclopedia
 Refining Petroleum Fuel Gas
Gasoline

Kerosene –
Jet Fuel

Heating
Oil

Crude Oil Lubricating

Vapor Oil

Residual Products–
Liquid Crude Oil Asphalt,
after World Book Encyclopedia Heavy Fuel Oil
24803
JMA
 Wells Drilled in the USA
80
80 Most Desired Resource
Gas Oil Gas
70
70
60
60 Oil
50
50
Percent
Percent 40
40 Dry
30
30
20
20 Gas
10
10

0
0
1920
1920 1930
1930 1940
1940 1950
1950 1960
1960 1970
1970 1980
1980 1990
1990

American Petroleum Institute, 1994

JMA
 US Domestic Production
Natural Gasoline
Natural Gas
12
12 and
and Other
Other Hydrocarbons
Hydrocarbons
10
10

8
8
Thousand
Barrels 6
6
per Day Crude Oil
4
4

2
2

0
0
1950
1950 1960 1970 1980 1990 1998
American Petroleum Institute, 1999
JMA
 United States Petroleum Imports
1950s 15%
1960s 20%
1970s 36%
1980s 42%
1990s 50%
2000s ?
JMA American Petroleum Institute, 1999
 Major Suppliers of Oil to the U.S.
Millions of Barrels Per Day

1.68 1.61 1.48 1.36

Venezuela Canada Saudi Arabia Mexico

U.S. Dept. of Energy

Embassy of Venezuela
12/98 U.S. News & World Report

JMA
 Costs/Barrel of Oil - At Well Head
1999 USA
$24/BOE $12/BOE
Exploration $2.60 (11%) $1.70 (14%)
Development $6.00 (25%) $5.10 (43%)
Operations $3.00 (12%) $2.00 (17%)
Tax $2.40 (10%) $1.20 (10%)
Basic Costs $14.00/B (58%) $10.00/B (84%)
Margin $10.00/B (42%) $2.00/B (16%)

50% Market decline 500% Margin decline

JMA January 1999 Estimates
 USA Average Wellhead Oil Price
Oil Price (1996 Dollars/Barrel)
60
1990 Gulf War
1980 Iran/Iraq War
50
1978 Iranian Revolution
40 1973 Arab Oil Embargo
$/Barrel

30 1967 Arab-Israeli War

1956 Suez Crisis

20

10

0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990
Year U.S. Department of Energy, 1996
JMA
 1998 Oil Price Forecasts
Nine Organizations
35
Widely Divergent Forecasts IEA
30
Make Planning Difficult
DOE High
$/BBL (1996 Dollars)

25 Mobil

DRI
20
DOE Base

15 Nat. Res. Canada

Nat. West Sec.

10
2000 2005 2010 2015 2020 Pet. Econ. Ltd.
Year
DOE Low
JMA U.S. Department of Energy, 1998
 Gasoline Price: Cost vs. Tax
Per Gallon Unleaded Self-Service in 1998 Dollars
Pump Price
City July ‘98 Jan. ‘99
Tax Product
San Francisco, CA 1.45 1.25 .46 .78
San Diego, CA 1.49 1.18 .46 .71
Portland, OR 1.35 1.15 .42 .73
Boston, MA 1.18 1.13 .40 .73
Seattle, WA 1.31 1.10 .41 .68
Washington, DC 1.24 1.08 .38 .70
Atlanta, GA .93 .98 .30 .67
Dallas, TX 1.08 .95 .38 .57
Denver, CO 1.18 .94 .40 .53
Kansas City, MO .96 .86 .35 .51
Tulsa, OK .97 .81 .35 .45

Oil and Gas Journal, January 18, 1999

JMA
 Gasoline Price: Cost vs. Tax
Per Gallon in 1998 Dollars (December 1998)

Country Pump Tax Product

Price Price
UK1 4.45 3.78 0.68
Italy1 4.15 3.24 0.91
France1 4.14 3.50 0.64
Germany1 3.32 2.68 0.64
Japan1 3.11 1.90 1.21
Spain1 2.98 2.18 0.80
Canada1 1.30 0.71 0.59
USA2 0.98 0.39 0.59
1
International Energy Agency 2
Oil and Gas Journal
JMA
 Gasoline Price: Cost vs. Tax
Per Gallon in 1998 Dollars (December 1998)

Country Pump Tax B Product

PriceA PriceA
UK1 4.45 (454%) 3.78 (85%) 0.68 (115%)
Italy1 4.15 (423%) 3.24 (78%) 0.91 (154%)
France1 4.14 (422%) 3.50 (85%) 0.64 (108%)
Germany1 3.32 (339%) 2.68 (80%) 0.64 (108%)
Japan1 3.11 (317%) 1.90 (61%) 1.21 (205%)
Spain1 2.98 (304%) 2.18 (73%) 0.80 (136%)
Canada1 1.30 (133%) 0.71 (55%) 0.59 (100%)
USA2 0.98 (100%) 0.39 (40%) 0.59 (100%)
1
International Energy Agency 2
Oil and Gas Journal
A
Percent of US Price B
Percent of Pump Price
JMA
 DOE Oil Price Forecasts
Linear Trends Predicted Beginning From the Actual Price of Year Listed
120
1982

100 1981
Dollars per Barrel

80 1984

60 1985
1986 1987
40 Actual
1991

20
1995

0
1975 1980 1985 1990 1995 2000 2005
Year after U.S. Department of Energy, 1998
JMA
 1998 Oil Price Forecasts
Nine Organizations
35
Widely Divergent Forecasts IEA
30
Make Planning Difficult
DOE High
$/BBL (1996 Dollars)

25 Mobil

DRI
20
DOE Base

15 Nat. Res. Canada

Nat. West Sec.

10
2000 2005 2010 2015 2020 Pet. Econ. Ltd.
Year
DOE Low
JMA U.S. Department of Energy, 1998
 US Oil & Gas Consumption/Efficiency
Technology Drives Efficiency: Population Drives Consumption
60,000
60,000 18
18

Total O&G Consumption per GDP

Total O&G Energy Consumption

16
16
50,000
50,000
14
14
Total O&G Consumption
otal O&G Consumption

(1987$-1000BTU)
40,000
40,000 12
12
(Trillion BTU)

10
10
30,000 O&G
O&G Consumption
Consumption per
per $
$ of
of
30,000
Gross
Gross Domestic
Domestic Product
Product 8
8
V8 mpg
20,000
20,000 6
6
1971 - 13.6
1982 - 18.6 4
4
10,000
10,000 1988 - 24.3
2
2

1975
1975 1980
1980 1985
1985 1990
1990 1995
1995

Robert McGill - AAPG Explorer, 11/95

JMA
 More Efficient Energy Use
Only 12% of Wellhead Oil Energy Potential is
Actually Driving a Car’s Wheels

Well to Pump Heat & Friction Energy

to Wheels
(overall)

100%
Available 12%
Energy
The Challenge:
17% 71% Significantly
increase this
Energy Loss Energy Loss efficiency.
Source: Mobil Technology Company
JMA
 Atmospheric Concentration of CO2
1000 Year History
380 D57
D47
360 Siple
Concentration of CO2 PPM

South Pole

340 How much of

change is natural
versus mankind’s
320 use of fossil fuels?

300

280

260
800 1000 1200 1400 1600 1800 2000
JMA
Years Cook and Sheath, 1997
 600

Reducing CO2 Emissions

US Advanced Technologies Can
“Well-to-Wheels” CO2 Emissions (gm/mi)

(21 mpg)
Increase Fuel Economy and
Japan
(24 mpg) Reduce Emissions
400
Europe
(29 mpg) Today’s Car Fleet

Advanced Gasoline Future Fleet Potential (US)

Advanced Diesel
200
Hybrid Gasoline
Hybrid Diesel
Fuel Cell

0
0 10 20 30
“Well-to-Wheels” Energy Efficiency (%)
JMA Source: Mobil Technology Company
 CO2 Capture and Storage
Potential for Reducing CO2 Emissions
from Fossil Fuel Power Generation

Increased Reforestation

CO2
Consumption

il,
s , Oal
a C
G Co Sto O2
rag
e
Mobil
Injection into Depleted Oil/Gas Reservoirs Source: IEA Greenhouse Gas
R&D Program
JMA
 Electrical Power Generation
40 Photovoltaics
Electricity from Renewable Sources Still
Costs More than Conventional Sources
12 Solar/Thermal
200

10
Biomass
Electricity Cost (cents/kWh)

Electricity Cost (cents/kWh)

150
8 Coal
with CO2 Capture
Wind
6
100
New Coal
4
50 New Gas
2

0 0
1980 2000 Sources: National Renewable Energy Laboratory and
Renewable Energy Technology Characterizations, EPRI Report TR-109496
JMA
 Impact on Students
Linkage of Petroleum Industry and Geoscience Students
60 120

50 Petroleum Engineer 100

Graduates
40 Oil Price (Colorado School of Mines) 80
(1996 dollars/barrel)
$/Barrel

30 60

20 40

10 20

0 0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990
Year Colorado School of Mines and
US Department of Energy, 1997
JMA
 Worst Case Employment Scenario
1,600,000

1,400,000

1,200,000 Global Energy

Total Number Demand will
of Petroleum 1,000,000 Counter Trend
Industry
Employees 800,000
(FRS Companies)
600,000

400,000

200,000

1974 1979 1984 1989 1994 2000 2005

Arthur L. Smith, CFA - Abilene, Texas, 1996
JMA
 Geoscience Demographics
For a Typical Major Oil Company

Age Brackets for Geoscientists Worldwide (2008*)

300

255
250

200 191
153 Gone Fishing
150 140

100
76
50
23
3
0
>25 26-29 30-34 35-39 40-44 45-49 50-54 55-59 60+
Age (YRS) *with normal attrition and
JMA no replenishment
 Optimistic Long-range Trends for
Geoscience Employment
Total Employment Continues to Grow
40
AAPG

30
d
Tren
A P G AGU
Membership
Membership A
(1000s) 20 GSA

10
SEPM
SEPM Trend
0
1960 1970 1980 1990
after Marcus Milling - AGI, 1995
JMA
 Geoscience Theses and Dissertation
opics
T
1950s versus 1980s
8
8
Environmental
Environmental 1
1
2
2
Economic
Economic Geology
Geology 6
6
7
Geochemistry 7
Geochemistry 7
7
Geophysics
Geophysics 5
5 4
4
Igneous/Metamorphic 3
3
Igneous/Metamorphic 2
2
Stratigraphy-Paleo 1
1
Stratigraphy-Paleo 3
3
Sedimentary 4
4
Sedimentary Geology
Geology 5
5
6
6 1950-59
T
Tectonics
ectonics 8
8 1980-89
Other 9
Other 9
9
9
0
0 1000
1000 2000
2000 3000
3000 4000
4000 5000
5000 6000
6000 7000
7000
Number of
Theses and Dissertations
Marcus
Marcus Milling
Milling
AGI,
AGI, 1996
1996
024583
JMA
 US Geoscience Student Enrollment
40,000
40,000

Undergraduate
30,000
30,000
Arab-Israeli
Arab-Israeli
Number
Number War
War
of
of Majors
Majors
20,000
20,000
US
US Govt.
Govt.
Price
Price
Controls
Controls Graduate
10,000
10,000

0
0
1955
1955 1965
1965 1975
1975 1985
1985 1995
1995
Marcus
Marcus Milling
Milling
AGI,
AGI, 1993
1993
JMA 024583
 Supply
Bachelor
’s Degrees, 1970-1994
800,000

659,495
600,000

Degrees
400,000
Granted
244,348
200,000
94,826
88,906

0
Physicists GeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Job Competitiveness
1970-1997 BS Degrees/1997 Jobs
8

6
5.6
4.7
Persons
4
per Job
2.5
2 1.9

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Employed Outside Initial Discipline
1970-1997 BS Degrees/1997 Jobs
100
82%
79%
75
60%
48%
Percent 50

25

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Demand
Employed Natural Scientists, 1997, USA

140,000
118,000

100,000 97,000
Working
Scientists
60,000
46,000

20,000
20,000

0
Physicists GeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Job Competitiveness
Years to Replace Currently Employed Scientists
20

17.2

15

Years 10.3
to 10
Replace

5
5
2.5

0
Physicists GeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Compensation
Average Salary – Bachelor
’s Degree, USA
40,000

30,000 ??? $ 27,900 $ 29,300

Dollars $ 22,900
per
Year 20,000
Year
(1997)

10,000

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Compensation
Average Salary – Bachelor
’s Degree, USA
40,000

30,000 ??? $ 27,900 $ 29,300

Dollars $ 22,900
per
Year 20,000
Year
(1997)

10,000

0
PhysicistsGeologistsChemists Biologists
John Holbrook Occupational Outlook Handbook
Palaios,Dec. 1997 US Bureau of Labor Statistics 24929
JMA
 Geoscience Careers
Survival
Training

• Strong basic-discipline training

• Constant updating and expansion of
skills and knowledge
• Competitive-edge in several skills
– Quantitative
– Workstation (computer)
• Excellent communication skills
– Oral, written, graphical
24619
JMA
 Cyclic
Cyclic JobJob Market
Market
Typical of Today’s Global Industries

on

?
ti
ic
ed

?
Pr

?
y
Employment os

?
R
(number of
jobs) Retrench
Retrench
w th
th
ro w
G ro

h
CCr
hh

rt
G

raa
r
irtt

bi
bbi
sshh
e

Re
RRe

Time

024658
JMA
 Cyclic
Cyclic Job
Job Market
Market
Continuous Learning Facilitates Timely Changes

on
ti
ic

?
ed

??
Pr
y

??
os Timely Timely
R
Change Change

??
Employment
(number of
jobs) Retrench
Retrench
th
w

C
B
A
ro

Cr

e
hh
e

e
G

lin
t
li n

l in
r
as
r
i
bbi

ip
ip

ip

e
e
h

sc
sc

sc

RR

Di
Di

Di

Time

024658
JMA
 Society Needs our Expertise

Resource Assessment:
Fossil fuels
Stratigraphic minerals
Environmental Quality:
Water supplies
Waste management
Catastrophe Management:
Landslides, Floods,
Tidal Waves
Bolide Impacts
Climate Change:
Documentation
Coastal management
JMA 024623
 Future of Sedimentary Geology
Geologic Employment
Areas

Mineral
• Resources
International
– Exploration
Petroleum
– Reservoir Management
•Environmental
C
– limate Change Study
–Geologic Hazard
Assessment
Flow
– Unit Characterization
ater
W Supply Protection
W
aste Containment

24619
JMA
 Job Market Expectation
By Employers

Assume: Self-motivated
Computer- Literate
Well-educated
Team Player
Excellent Communicator

JMA
 Job Market Expectation
By Employers

Expectation: Immediate Impact

Bottom Line Focus
High Productivity
Continuous Training
Problem Solving

JMA
 Job Market Readiness
Student Preparation

Education: Broadly Based

Balance of Theory
and Application

Thesis: Targeted

JMA
 Job Market Readiness
Student Preparation

Skills: Problem Solving

Computer Workstation

Traits: Self-motivated
Proactive

JMA
 Projected orld
W Energy Supplies
Careers in
Oil & Gas Hydroelectric
1993

New Technologies
Remain Important
100
100 BILLION
BARRELS Solar, Wind
Geothermal
80
Billion World Energy Demand
Barrels Nuclear Electric
of Oil Coal
Equivalent60
per Year
(GBOE) Natural
40 Gas

Fossil Fuels
Decreasing
Crude Oil
20

1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 3000
024839-2
after Edwards,
24929
JMA AAPG 8/97
 ‘Never-Say-Never’ to Exploration Areas

New Ideas

New Tools New Discoveries

in ‘Old’ Areas

Changed
Economics

JMA
 The Future for the Oil Industry
• Dominant fuel source for 30-60 more years
• Higher efficiency demands high precision and
better resolution
• Increased emphasis on enhanced
recovery/production scale sedimentology
• People provide the competitive edge (as everyone
has the same tools)
- Jobs for the best geoscientists

JMA
 Largest Hydrocarbon Basins
by Ultimate Potential

JMA
 Computer Simulation
and History Matching

JMA Mobil