The Global Deepwater Play: A Historical and Geological Perspective 27 Years After First Discovery

Henry S. Pettingill
Noble Energy, Inc.

Exploration and production in deepwater (>500m) settings have expanded greatly during the past 20 years, to the point at which they are now major components of the petroleum industry’s annual upstream budget. Most activity and discovered resources have been concentrated in only three areas of the world: the northern Gulf of Mexico, Brazil, and West Africa, however exploration is increasing in several new areas, including many sedimentary basins that have been lightly explored.

Approximately 100 BBOE have been discovered in deepwater, over half in the last 10 years. Despite the recent upswing in leasing and drilling activity, deepwater remains a frontier arena, with only about 25% of the discovered resources developed and less than 10% produced. Conservative estimates for deepwater reserves remaining to be found are 100-150 BBOE. Although deepwater accounts for less than 10% of the world’s remaining current oil and gas reserves, the percentage has been climbing. In addition, deepwater resources are predominantly oil, with more than 85% in non-OPEC countries, making deepwater an important component of the world’s future oil equation. Whereas the worldwide discovery of giants has fallen off in recent decades, the discovery rate of deepwater giants is rapidly increasing. Gas exploration in deepwater is extremely immature, reflecting current infrastructure and economic limitations, however the percentage of gas in developed deepwater resource total is rising and destined to become a major focus in the future. The global deepwater success rate was about 10% until 1985, but has since averaged approximately 30% or higher, driven by remarkable success rates in the Gulf of Mexico and West Africa.

Deepwater activity and discoveries have been concentrated along passive margins, downdip from productive Tertiary delta systems, most often in depocenters confined by mobile substrate. A majority of the currently discovered resources are in extensional regimes, led by the Gulf of Mexico, West Africa and Brazil, where early success was commonly associated with salt minibasins and Direct Hydrocarbon Indicators (DHIs). In recent years leasing and discovered resources have increased dramatically in the terminal compressive terrains of passive margins, often with the involvement of salt or shale, and in the GoM, below allochthonous salt. Ninety percent of deepwater resources have been found in turbidites, primarily of Tertiary age, but with a recent emergence of Cretaceous reservoirs. Deepwater source rocks range from Triassic to Neogene in age, with the Cretaceous having sourced over half the oil and the Jurassic having sourced a majority of the gas. Over two-thirds the resources have been found in traps that have a stratigraphic component, however resources in structural traps are on the rise, due largely to the anticlines found in the aforementioned compressive regimes.

A key early success factor was establishing "high kH" reservoirs (high flow rate and well ultimate). These reservoirs were often deposited with ponded minibasins associated with mobile substrate, where stacked turbidite sands result in high net pay per area. Other key success factors have been seismic DHI’s, stratigraphic trap resolution, improved reservoir architecture prediction, and pre-stack depth imaging. Leading companies have successfully moved into non-DHI plays and other geologic settings, including pre-Tertiary objectives and areas lacking major updip reserves. More recently in the maturing GoM, the key has become imaging below salt, requiring not only depth migration, but an increased understanding of structural geology, regional depositional frameworks, charge dynamics, pore pressure, and seal integrity.

Past trends suggest several themes for future deepwater exploration. The first is a continuation of established plays, many of which are at a relatively immature stage of drilling. The second is going beyond the established formula to basins lacking updip production, unconfined basins, compressive margins, and pre-Tertiary and non-turbidite targets. The third theme is increased gas exploration, as pipeline networks and liquefaction technology advance in conjunction with increased consumption. A forth trend is going to deeper drilling depths, including subsalt, sub-detachment, and sub-volcanic targets. The fifth focuses on new business opportunities, which may arise in areas previously not available due exploration moratoriums and boundary disputes. Finally, significant amounts of heavy and/or waxy oil that occurs in deepwater holds may be targeted and developed as technology and economics allow.

In the current environment, new business challenges have emerged, including (but not limited to):

Increased competition, from the emergence of both smaller Independent E&Ps and state–owned companies (NOCs).
Rising service costs, particularly deepwater rig rates, but also seismic acquisition and processing.
Rig commitments that often must extend beyond the current prospect inventory, into future years when product price is uncertain.
Large capital costs and risks associated with large-scale gas monetization, with long-term payouts subject to demand and price uncertainty.
An unprecedented shortage of experienced E&P technical staff.

Figure 1. World Map showing major producing and prospective deep water basins, with those with mobile shale in yellow and mobile salt in red. Discovered resourced as of end-2003 are shown in red and green. Resource data from Pettingill (2003). Numberes are basins, identified in Weimer (2005).