Hydrocarbon exploration

Features of interest (known as leads) are subjected to more detailed seismic surveys which work on the principle of the time it takes for reflected sound waves to travel through matter (rock) of varying densities and using the process of depth conversion to create a profile of the substructure.

Offshore the risk can be reduced by using electromagnetic methods [1] Oil exploration is an expensive, high-risk operation.

Offshore and remote area exploration is generally only undertaken by very large corporations or national governments.

Hundreds of smaller companies search for onshore hydrocarbon deposits worldwide, with some wells costing as little as US$100,000.

A significant amount of geological, structural and seismic investigation must first be completed to redefine the potential hydrocarbon drill location from a lead to a prospect.

Exploration risk is a difficult concept and is usually defined by assigning confidence to the presence of the imperative geological factors, as discussed above.

Appraisal by drilling additional delineation wells or acquiring extra seismic data will confirm the size of the field and lead to project sanction.

At this point the relevant government body gives the oil company a production licence which enables the field to be developed.

Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.