“Normally one would talk about an event like this in terms of recent discoveries and trends.”
That’s Neil Hodgson, AAPG Europe president, talking about what happened – more to the point, what didn’t happen – at the recent APPEX Prospect and Property Expo in London.
He has good reason for the non-announcement: recent discoveries and trends in the industry are, he believes, an ongoing occurrence for explorationists – it’s part of their DNA.
What is needed right now is a re-focus – a rebirth.
“APPEX this year is re-vamped and in process of getting back to its core purpose – getting governments and operators together, providing space for farm-outs and promotions, and a place to talk about what new ideas have been tried, what worked and didn’t work,” said Hodgson.
Listening to Hodgson, there is a sense that while he sees the clouds on the energy horizon – especially in Europe, he is more excited about the sun peeking through them.
“I want to stress that while energy transition is a thing and will happen (he calls it “the elephant in the room”), we need to keep exploring,” he said.
The True Heroes of Our Age
In fact, he said, it is a great time to be an explorer, for it is a great time to join with those who have done so much good.
“Despite what you hear in the media, in the whole of human existence, the world has never been such a good place to be alive in,” Hodgson said.
Quite a boast, even he’ll admit, but he believes the industry shouldn’t be shy about patting itself on its collective back.
“The civilization built by the geoscientists’ feedstock of fossil fuels has lifted the vast majority of people on the planet out of debilitating poverty, increasing lifespan and quality of life in every part of the world,” he said.
And while what comes next is a balancing act, as it has always been, he sees what’s ahead not as problems, nor even as challenges, but as an unfinished work of art.
“As we enter the second decade of the century, international exploration for oil and gas finds itself at a point of equipoise, balance beautifully between two questions: ‘What can we do?’ and ‘What should we do?’” he said.
These are questions the industry has always asked and, more importantly, usually answers correctly – a feat ignored by those whose task it is to bestow honors upon those who move civilizations forward.
“The work of we few, we happy few in our industry is largely unrecognized by Nobel prizes but without us, everyone on earth would be trapped on the set of ‘Game of Thrones,’” he said.
Reasons for Optimism
With that off his chest, he returned to the industry, which he believes has hit something of a “sweet spot.”
“We’ve never been able to see so much on modern de-ghosted PSDM seismic data and never been able to de-risk source rock presence and map reservoir in incredible detail. So, we can now understand the influences on the frozen moment-memories of rock that make the stories from the four-billion-year story of the world we live on,” he said.
Engineering, similarly, is at what he calls a “precious place” with drill capability below 3,400 meters of water – and the prospect of deeper water exploration to come later this year.
“Having managed the cost structure of exploration, we now have commercial and engineering solutions to deepwater exploration that means we can deliver deepwater resources,” he said.
This is important because the deepwater domain is where we can expect to find the largest remaining conventional resources.
“It’s a domain hardly explored, yet it’s where the big apron floor fans lie with trapping geometries that are simply huge. And down on the basin floors of the world’s passive margins, we have discovered that the geologies we have been working with on the shelf and slope, and the outcrops we have been studying onshore, need a new mindset because of the influence of contourite currents – often only mappable on a seismic scale. Over the last five years, more than 70 percent of new resource adds have been made in deepwater – often in very large accumulations, for instance Liza and Longtail (and the numerous similar and separate plays in Guyana) or Zhor (and the Zhorettes),” Hodgson explained.
They key to success in deepwater is decisive rapid development, which is possible because of the large size of these finds, and which also de-risks the downside.
And the money shot is this:
“These new geologies, new opportunities and a wave of success make exploration in 2020 such a brilliant place to invest and participate in,” he said.
The excitement, though, is not just underwater.
“Deepwater isn’t the only area where our industry is crushing the problems of uncertainty. As we’ve seen here in our very own so-called played-out super basin – the North Sea, with the superb discovery of Glengorm, through better seismic, better understanding of what we know; and what we just think we know, a key well bringing in huge value and unlocking new ideas in an old area,” said Hodgson.
The only stopper to exploration in a mature basin, he believes, is when the industry turns off its imagination, and that happens when we stop collecting the fuel of creativity: new data.
“Innovation shouldn’t ever stop, no matter how much you think you understand, and I’d argue that with ever-better tools, ever-better understanding, we should never stop blue-sky thinking in mature basins,” he said.
An Industry of Solutions
Hodgson, who gave the opening remarks at APPEX in early March, as well as a seminar entitled, “Exploration Overview Atlantic Conjugate Margin,” said the key is the sharing of creative thinking, for that creative thinking will solve the problem on everyone’s mind.
“We produce 35 billion barrels of oil per year globally and that gets consumed and adds carbon to the atmosphere. Consumers of this oil are concerned about the climatic changes that may come from their carbon emissions, so they increasingly want cheap energy that doesn’t put carbon into the atmosphere,” he said.
But the battle of what do with all that carbon is not the only front in the war that must be waged.
“This future mustn’t be a sterile no-growth future, but one which still powers economic growth, where the rest of the world is lifted up, and abject poverty – affecting some 800 million people today – is removed,” he said.
“It will be this final lift out of poverty that actually saves the planet from the real dangerous elephant in the room: population growth,” he added. “So we may all have to do what we can to help here, and there is no doubt that the industry that extracted some of the carbon (not the coal and peat part) can play a part in the sequestration of carbon, and we are ready to do this.”
He believes an industry – one that keeps the world mostly at peace, mostly well-fed and warm, and certainly in economic growth – is the same industry that will offer the world a set of solutions.
“We’ll keep exploring to ensure the transition to low carbon energy is smooth, and we’ll play whatever part we can in carbon management,” said Hodgson.