Tips for Success in High-Risk Exploration: The Tangguh Experience
James D. Robertson
Rannoch Petroleum LLC, Fort Worth, TX
The basic methodologies to select plays, generate prospects, analyze risk, conduct operations and make decisions are fundamentally no different in high-risk exploration than in exploration in general. However, since high-risk strongly correlates with lack of knowledge of the geology, there are a few particular guidelines that exploration teams can follow to improve the likelihood of success in high-risk ventures. This paper outlines these guidelines and illustrates their value using as an example the Tangguh gas discovery – a high-risk, high-reward exploration play successfully pursued in eastern Indonesia in the 1990s. Among the guidelines are the following. (1) Differentiate between weak petroleum systems and those that merely are poorly understood. A basin or sub-basin with verified hydrocarbon flows to the surface during well testing is worthy of further investigation even if no significant hydrocarbon pools have been developed. (2) Use petroleum geochemistry as a critical exploration technology. Modern geochemical analyses of rock and fluid samples can lead directly to new play concepts and to insights that reduce exploration risk. (3) Meld high-risk wildcatting with a lower-risk alternate outcome. If modest successes can be monetized to at least recoup exploration cost, a company can keep funding high-risk exploration while waiting for a major discovery. (4) Accept that land holdings may be rendered sub-optimal by geologic surprises, but have confidence that exploration knowledge often can overcome an adverse license position. (5) Recognize that exploration success when geology is highly uncertain is usually achieved after a sequence of events, not just one event, so a company must assemble an outstanding exploration team that can execute the exploration process perfectly. An unbroken chain of correct insights and decisions is far more likely to flow from a skillful and motivated multidisciplinary team than from one individual.