The drill bit penetrates the reservoir, and the tests
The result: Hydrocarbons are there all right -- just
not in commercial quantities.
High expectations are dashed, and vast amounts of
at-risk money are lost.
Maybe, just maybe there would be less hostility toward
the industry that supplies the vital resources demanded by all if
such not-uncommon E&P scenarios were better understood by the
Consider Destin Dome in the eastern Gulf of Mexico,
a striking example of faded hopes and dreams and staggering sums
of money risked and lost in the search for hydrocarbons. It has
even been called "Dusty Dome" in impolite conversations about its
Oh yes, there's also the issue of perhaps as much
as three Tcf of dry, natural gas that may remain trapped in the
depths of the structure forever.
The dome lies 25 miles south of Pensacola, Fla. The
large, west-northwest trending anticlinal feature is more than 50
miles long and 20 miles wide and with a relief of 3,000 feet on
Lower Cretaceous rocks.
It apparently is the result of a salt swell that
was uplifted during the Late Cretaceous and early Cenozoic, according
to an article in the AAPG BULLETIN (1997: Ball, Martin and Taylor).
There's been a more-than-decade-long endeavor to
develop the vast natural gas reserves discovered there, with nothing
It's a political thing.
Chevron acquired leases at Destin Dome in 1984, before
#41 Bush (President Geoge H.) imposed leasing moratoria off much
of the Florida coast, according to MMS spokesperson A.B. Wade.
The initial hydrocarbon discovery on the structure
occurred in 1987 on Chevron's Block 56 leaseholding. In accordance
with the Coastal Zone Management Act, Chevron submitted an exploration
plan to both the MMS and the state of Florida, seeking approval
to proceed with drilling operations.
The plan was rejected by Florida, but the denial
was overruled by the U.S. Commerce Department. After delineating
the lease, Chevron submitted a development plan in 1996 and Florida
responded with a resounding 'No!' -- so Chevron found itself once
again in the halls of Commerce, where the issue remains unresolved
today, after more than five years.
On July 24, 2000, according to the MMS eastern Gulf
of Mexico review data, Chevron and partners filed a lawsuit against
the U.S. government for denying the companies "timely and fair review"
of plans and permits and an appeal concerned with the Destin Dome
An MMS source noted that Chevron is seeking to recoup
both the money already spent and the potential money to be realized
on a find that large. Block 56 was leased in 1984 by Conoco, Chevron
and Murphy Oil at a cost of $1.6 million.
The natural gas prize long sought by Chevron et al
is thought to be harbored within the Jurassic Norphlet formation
at depths greater than 20,000 feet.
The Infamous Failure
Destin Dome emitted a different kind of siren's song
in the early days of Gulf exploration, when industry was looking
at shallower potential prior to the big Norphlet play activity that
began close to shore and eventually migrated offshore to the structure.
"There was a big lease sale in the early '70s," said
Layton Steward, "and everybody was bidding on it."
Steward, an AAPG member, now retired from the helm
of LL&E, was offshore manager for Shell at the time. The objectives
then were primarily for Cretaceous reservoirs, said consulting geophysicist
Mike Forrest, another Shell hand during that period.
The sale occurred about six years after Shell developed
bright spot technology, according to Steward, who noted the bright
spot concept originated with Forrest (May 2000 EXPLORER).
"We couldn't see any bright spots, so we used the
technology in reverse to modify our bids," Steward said, "and bid
only on one tract mainly to be sure we were represented on it."
He noted that natural gas wasn't worth much then,
so Shell went after a tract downdip from the crest hoping to find
an oil leg instead of gas.
"This was a huge-but-late structure geologically,
and it had us worried a bit relative to the migration and entrapment
of hydrocarbons on it," Steward said.
"Exxon and Champlin pretty much bought the whole
thing," he added, "and a bunch of the Champlin guys, including the
senior-most executives, were fired because they so overbid the sale.
"They may have just assumed it was a big ol' anticline
full of hydrocarbons."
Exxon drilled a well at Destin Dome Block 162 in
1974, kicking off the first exploratory drilling activity in the
eastern GOM. Two years and 15 dry holes later, exploration came
to a halt, according to MMS data. Three lease sales were held in
the area during the '80s, when industry interest was rekindled.
The proposed highly-controversial Lease Sale 181
will be the first in the eastern GOM since 1988.
Following months of mud-slinging rhetoric and more
emanating from the NIMBY (Not In My Back Yard) citizenry in Florida,
their elected officials and others, the initial sale area of 5.9
million acres has been reduced dramatically to 1.5 million acres,
all of it at least 100 miles from the Florida coast.
Florida's neighbors are not too happy over the results
of the Sunshine State's fight to keep offshore drilling at such
great distances from its condo-blighted, yet so-called pristine
U.S. Representative Sonny Callahan, R-Ala., chairman
of the House Energy and Water Development Subcommittee expressed
his anger in a unique way. He added language to a House spending
bill that could halt construction of a major new natural gas pipeline
running from Alabama to Florida that would enable Floridians to
reap the benefit of production from its neighbor's backyard.
The proposed sale, which will be the eleventh sale
on the OCS in the eastern GOM, is tentatively scheduled for Dec.