Thick submarine fans harbor stacked plays
Pulak K. Ray
Minerals Management Service
- Leasing activity in the US Gulf of Mexico is shown before and after the Royalty Relief Act was enacted. The act allowed producers to postpone paying royalties until costs are largely recovered.[26,248 bytes]
- Approximate locations of deepwater discoveries. [20,830 bytes]
- Block diagram showing the formation of Slope and Deep-Submarine fans. [23,685 bytes]
- Discovered submarine fan plays. [17,892 bytes]
- This probability range chart for the US Gulf of Mexico shows the discovery rate by field size and probability. [21,760 bytes]
The demand for natural gas in the lower 48 states is expected to increase to 28.8 Tcf in 2019 from 21.4 Tcf in 1999. Though the production of gas in the lower 48 is expected to increase to 26.7 Tcf/yr from 18.9 Tcf/yr during the same period, it leaves a shortfall of about 2 Tcf/yr. This shortfall has to be met with imports from Canada and/or Mexico, which are expected to have surplus production. If the present activities and success in the deep water GOM continue, the energy production from the GOM will contribute to reducing imported energy.
Since the 1947 establishment of the first Outer Continental Shelf (OCS) field in 18 ft of water, exploration and development of the GOM have moved into deeper and deeper waters. In recent years, discoveries have been made in water depths exceeding 7,600 ft. If the last few lease sales are indicators, the industry is poised to move its exploration activity into yet deeper water areas of the US Gulf. The venture into deepwater areas resulted in discoveries of fields with world class production rates and larger sizes than the recent shallow water discoveries.
Leasing trendsLeasing activity in the Central and Western GOM in 1997 set records. In the Central GOM sale, 1,790 bids totaling $1,242,000 were received on 1,032 tracts. The total of high bids on 1,004 tracts that were accepted was $812 million. In sale 168 (Western Gulf), 1,224 bids on 804 tracts totaling $939 million dollars were received, and 778 tracts with high bids totaling $600 million were accepted. So far in 1998, one lease sale has been held. The Central GOM received bids on 794 tracts.
Feverish leasing activity since 1994 clearly indicates industry interest in the deepwater areas of the GOM, especially after the implementation of Royalty Relief Act in 1995. While the number of tracts in the shallow water (<650 ft) remain somewhat constant between 490 in 1994 to 542 in 1997, the number of tracts leased in water depths beyond 2,600 ft jumped significantly. maximum royalty relief is applicable beyond 2,600 ft where leasing increased from 49 in 1994 to 1,836 in 1997. sixty-eight percent of tracts (539) receiving bids in the 1998 central gom sale are located in water deeper than 2,600 ft. industry interest in water ranging from 650 ft to 2,600 ft deep is low and has remained steady from 1994 to 1998.
e&p trendsDeepwater (1000 ft) exploration and development faces significant challenges. Most of the deepwater area, over 66%, is covered by shallow salt. In recent years, technological advancements in deepwater drilling have resulted in the discovery and development of a large number of fields in deepwater.
Such advances include riserless drilling, production spars, subsea completions, mini-tension leg platforms (TLP), and 3D/4D seismic.
The average size of discovered fields in the shallow water Gulf has decreased from the 1950s to the 1990s, indicating the maturing of the basin. Subsalt sections in this area may open new plays with larger fields.
In the deepwater US Gulf, the modal size of discovered fields has remained at around 100 million bbl. Emerging technology is enabling the industry to explore and develop even deeper waters. The venture into deeper water (1,500 ft) brings with it new technical challenges for environmentally sound development, production, and operational safety.
Plans of exploration (POE) and development and operations coordination (DOCD) are indicators of exploration and development activities and have been steadily increasing since 1992. POEs increased to 439 in 1997, up from 250 in 1992. Nineteen percent of these were in water depths beyond 1,000 ft in 1997. DOCDs increased to 370 from 128 during the same period, 3.5% of which in 1997 were in water depths greater than 1,000 ft.
Seventy-two fields have been discovered in water depths exceeding 1,000 ft. Twenty-one of these have proved reserves. Currently, more than 700 exploratory wells and 400 development wells have been drilled, and more than 1,700 miles of pipeline have been approved. Fifteen of these discoveries are in water exceeding 4,000 ft. The deepest discovery, Coulomb (Shell), is at 7,500 ft. The deepest producing well, Mensa (Shell) is at 5,376 ft water depth and produces from a subsea completion.
Currently, the deepwater producing fields consist of 5 fixed platforms, 7 floating systems (4 TLPs, 2 FPS, 1 spar), and 9 subsea completions. In the near future, 10 subsea systems, 2 fixed facilities (compliant towers), 10 floating systems, and 24 as yet unknown systems are to be deployed in the Gulf. Neptune (Oryx) is the first spar production (23,500 BOE/d) and is in 1,930 ft of water. Mensa (Shell)is the deepest producer, at 150 MMcf/d, and is in 5,400 ft of water.
In short, the industry has proved that with current and advancing technology, the deepwater GOM can be safely explored and economically developed. As many as 40 deepwater fields should be producing by 2001. The contribution of the deepwater GOM to the total oil and gas production of the Gulf has been increasing steadily since 1993. The 1996 data indicate that more than 17% of oil and about 6% of gas production from the US Gulf was from deepwater fields. Since 1986, except for 1988 and 1989, deepwater production has been increasing every year. This trend is expected to continue.
Production trendsProduction from deepwater leases has far exceeded expectations. Shell reported last August that production from both Auger and Mars projects, both in over 2,800 ft of water, has surpassed 100,000 b/d of oil. Other deepwater discoveries, not yet on production, have shown flow potential of over 30,000 b/d of oil. Gas production capacity of many of deepwater fields (Ursa, Mensa, Ram Powell, and Tahoe) is estimated at 200-400 MMcf/d. These rates compare favorably with flow rates in the North Sea or Persian Gulf.
More than 50 deepwater fields are expected to come on line by the turn of the century.
They are expected to increase the daily production of the GOM significantly.
The annual production rates of both oil and gas are projected to increase. MMS estimates that by the year 2002, OCS oil production will increase at a minimum of 70% to about 1.7 million b/d of oil or possibly as high as 2 million b/d. If realized, that will be a doubling of production from 1995.
During the same time period, natural gas production will slightly increase and by 2002 could rise as high as 17.5 Bcf/d, compared to current production of 14 Bcf/d, an increase of 23%. The percentage of oil and gas from deepwater leases is projected to more than double during this period, from 28% in 1997 to approximately 69% in 2002. Largely because of the deepwater Gulf, industry forecast expects U.S. oil production to end its decline and increase by 0.3% this year. This noteworthy achievement continues to reinforce our view that the deepwater GOM is an area of very high potential, and we look for natural gas and oil activities to continue to grow as operators explore and develop recently acquired and existing active deepwater leases.
The original proved gas reserves have been steadily increasing since 1988 through the addition of newly discovered fields. The reserve additions, however, have not kept pace with production. Consequently, the remaining proved reserves were reduced over the same period. Similarly, oil reserves were reduced during the same period. Some of the additions come from reserve growth. In the GOM, a 30-year old field may grow four times its originally estimated size. Since most of deepwater fields are only a few years old, significant growth is expected.
Geologic playsAn oil or a gas play is a group of geologically related hydrocarbon accumulations that share a common history of hydrocarbon generation, migration, entrapment, and preservation with accumulations called pools. A single field may contain one pool from one play or multiple pools from several plays stacked one above another. Forty-one fields of the deepwater GOM that have been studied reveal that all but two have stacked plays.
Typically, two to three plays are produced in the same field. The pools range from Upper Middle Miocene to Upper Pleistocene in age. Facies characteristics as interpreted from well logs and paleontological data suggest a deepwater submarine fan depositional environment for all the discovered deepwater plays.
The average pool size of the Upper Pleistocene Fan play is about 27 MMboe. The average pool size of the Lower Pleistocene, Upper Pliocene, Upper-Upper Miocene Fan plays ranges from 40 to 50 million BOE. The average pool size of Lower-Upper Miocene and Upper-Middle Miocene ranges from 68 to 78 million BOE. Middle Pleistocene and Lower Pliocene have the smallest average pool size of less than 20 million BOE.
In addition to the deepwater areas of the Gulf, submarine fan plays of Miocene and Pliocene age have long been identified in the shallower water areas of the Gulf of Mexico Slope. A number of these producing submarine fan plays have been described in the Offshore Atlas, published by the University of Texas, MMS, and others.
On the map, the play outlines encircle discovered pools, indicating submarine fan facies. The seaward limit of these plays will probably shift as new discoveries are made and may extend up to the edge of the Sigsbee Escarpment. Overlapping of plays and a general westward shift of the depocenter from Pliocene to Upper Pleistocene can be noted on this map.
The pools of submarine fan facies, which have been discovered in deepwater fields on the present day slope as well as in the fields of the shelf areas, may represent two distinct groups having their own unique genetic history and petroleum geologic properties. For the purpose of this discussion these two groups will be called, "Slope Submarine Fans" and "Deep Submarine Fans".
The slope submarine fans can be described as proximal deltafront submarine fans deposited in minibasins formed by slope breaks and produced by lateral and diapiric salt movements on the upper to middle slope. These basins are filled with sediments derived from river sources and slope failures. Minibasins are numerous and of limited aerial extent. The thickness of reservoir quality sands in a pool can be measured in tens of ft to a few hundred ft. The deep submarine fans, on the other hand, are formed in deep-basin areas and are fed by submarine canyons, which remain stable for longer periods of time.
As the rivers prograde near the slope break, the river sediments feed the submarine canyons directly and the sediments bypass the upper and middle slope. The reservoirs of the deep submarine fans are thicker and can be measured in hundreds of ft. The discovered deepwater fields with world-class flow rates and pay sands are found in Deep Submarine Fans.
Are the deepwater fan plays part of continuous fan plays extending from the shallow water areas of the Gulf? A definitive answer is not available at this time. The following characteristics suggest that the deepwater plays are different from submarine fan plays in the shallower areas of the slope:
- Salt tectonics: In shallow areas of the GOM, salt is primarily dipiric. In the deep water, the salt is predominantly tabular allochthonous.
- Flow rate: The flow rates of the deep water fields are significantly higher than in the shallow water areas.
- Oil properties: API gravity and sulfur content are different in some of the deepwater pools.
If the proposed model of two types of submarine fans proves to be true, a significant number of future discoveries may be expected from subsalt Miocene "Slope Submarine Fans" in the shelf and upper slope areas and from Pliocene and Pleistocene "Slope Submarine Fans" in the slope areas out to the Sigsbee Escarpment.
Middle and Upper Miocene "Deep Submarine Fans" are more likely to be present in the deepwater Central GOM and westernmost parts of Eastern GOM. Pliocene and Pleistocene "Deep Submarine Fans" are expected in the deepwater areas beyond the Sigsbee Escarpment in the Western GOM and western part of the Central GOM.
Future outlookTo assess the future in the deepwater areas of the GOM, three questions need to be asked.
- What makes the deepwater GOM attractive to the industry?
- What will it take to make the deepwater programs successful?
- What is the expected outcome?
- A discovery ratio of 26%
- Large field discoveries
- Lease terms of 10 years
- Deepwater royalty relief.
It can be said with a degree of certainty that the oil and gas activity in the deepwater Gulf will continue at a brisk pace for the next 15-20 years. Lease terms on over 600 tracts are set to expire between 1998 to 2000. Recent history indicates that a majority of expired tracts are leased again by the industry.
Additionally, many of these tracts, which currently do not qualify for royalty relief, will become eligible if leased again by the year 2000 and if fields are established. These tracts and others can be explored in the next 10 years.
After discoveries are made, it takes an average of 5-15 years to develop the deepwater fields. The fields discovered in the late 1980's are coming on line now. Recent discoveries may come on line between 2000 and 2010. The fields that will be discovered in near future may come on line between 2010 and 2020. This is contingent upon reasonable oil price ($15/bbl) and continuing technological advancements.
Copyright 1998 Oil & Gas Journal. All Rights Reserved.