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Application Of Geology In Petroleum Exploration and Exploitation

Technical Report · November 2014

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 ABSTRACT
This a concise
report talking
about the
application of
geology in
petroleum
exploration and
exploitation and
also some
continents as case
studies i.e. Europe,
Africa, America.

Gbenga
Durojaiye
12BC001883
DEPARTMENT
OF CIVIL
ENGINEERING
CVE 314
(Geology)

Taking case study from Africa, Europe and

America
 TABLE OF CONTENTS

 EXECUTIVE SUMMARY

 INTRODCTION

 LITERATURE REVIEW

 METHODOLOGY

 RESULT & DISCUSSION

 CONCLUSION & RECOMMENDATION

 REFERENCES

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 1|

 EXECUTIVE SUMMARY
Methods of petroleum exploration and production requires
stressful, technologically driven approaches. During the
prospective phase petroleum exploration and production
includes the se of subsurface geologic evaluation, seismic data
and large computing power to compute the geophysical. Drilling
exploratory wells is also an expensive and risky undertaking.

INTRODUCTION
A Geologist is a scientist who studies the solid and liquid
matter that constitutes the Earth as well as the processes and
history that have shaped it. Geologists usually engage in studying
geology. Geologists, studying more of an applied science than a
theoretical one, must approach Geology using physics, chemistry
and biology as well as other sciences.
Petroleum geology is the utilization of geology in the
exploration and exploitation of deposits of petroleum and natural
gas. The formation of a commercial deposit of petroleum arises
from an influx of petroleum into a reservoir bed which occurs in a
trapping situation and is large enough to be exploited at a profit.
Petroleum geology is also the study of origin, occurrence,
movement, accumulation, and exploration of hydrocarbon fuels.
It refers to the specific set of geological disciplines that are
applied to the search for hydrocarbons (oil exploration).
Petroleum geology is principally concerned with the
evaluation of seven key elements in Sedimentary Basins: A
structural trap, where a fault has contrasted a porous and
permeable reservoir against an impermeable seal. Oil
accumulates against the seal, to the depth of the base of the
seal. Any further oil migrating in from the source will escape to the
surface and seep.

 Source
 Reservoir

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 2|

  Seal
 Trap
 Timing
 Maturation
 Migration

Geology also assist petroleum exploration and exploitation in

the analysis of soil rock, basin analysis, production stage etc.

LITERATURE REVIEW
In year 2011 Mohd Fauzi Hamid and Wan Rosli Wan Suleiman of
the Department of Petroleum Engineering Faculty of Petroleum &
Renewable Engineering University Technology Malaysia talked
about fundamentals of Petroleum Engineering in relation with
Geology and Exploration and they talked about parameters
controlling petroleum appearance in which they talked about the
source rock, reservoir rock, traps, migration of petroleum,
entrapment of petroleum. All of this in which we have all talked
about in the introduction of this report.

Also in year 1999 Ione L. Taylor a U.S geological surveyor talked

about the petroleum product life cycle in relation to geology in
which a gave series of explanation in which from the explanation
in his notes he was able to give the diagram below

He also said that the majority of the geoscientists employed in

the search for oil and gas fall under three categories:
 Geologist (understanding the rocks)
 Geophysicist (interpreting the sub-surface structure or
configuration through gravity, seismic etc.)

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 3|

  Geochemist (understanding the sub-surface fluids like
petroleum)

In which in this report we would be focusing on the

geochemist, the geochemists are employed by oil exploring
and producing companies because of their expertise in
applying earth science to predict sub-surface conditions and
processes at work in sedimentary basins that form the
“hydrocarbon habitat” for oil and gas deposits.

These are parts of the literature found in relation to the topic

we are talking about in this report.

METHODOLOGY
The contents of this report were found through internet
search, news reports, research works, text books, and other
similar research areas cross referencing geology with
petroleum exploration and exploitation and also with the
continents of focus in this topic which are Africa, Europe and
the United States Of America, most of the results were
personal research works and some institutions and also some
governmental organisations e.g. EAGE (European associates
of geoscientists & engineers), AAPG (American Association
of Petroleum Geologists) etc. and also all the document
placed in this report are gotten without illegal act.

RESULTS AND DISCUSSION

In this chapter we would be talking about Continental case
studies in relation to petroleum geology (exploration and
exploitation).

CASE STUDY – AFRICA:

Our first case study as Africa and to talk about petroleum
exploration and exploitation we have to first talk about the
petroleum itself in Africa.

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 4|

The U.S. Geological Survey’s (USGS) World Petroleum Resources
Project is to assess the potential for undiscovered, technically
recoverable oil and natural gas resources of the world, exclusive
of the United States. As part of this program, the USGS recently
completed an assessment of four geologic provinces: three along
the eastern part of the African coast and one more than 900 miles
east of the African coast and extending to water depths ranging
from 2,000−3,000 meters (m). From north to south, the provinces
are as follows: (1) the Tanzania Coastal, containing rift, marginal
sag, and passive margin rocks of Middle Jurassic to Holocene
age; (2) Seychelles, characterized by rift, marginal sag, and drift
rocks; (3) the Morondava, containing failed rift, marginal sag, and
passive margin rocks; and (4) the Mozambique Coastal, described
by rift, marginal sag, and passive margin rocks. These assessments
were based on data from oil and gas exploration wells and
published geologic reports.
The four provinces were related to the breakup of Gondwana in
the late Paleozoic and Mesozoic (Reeves and others, 2002), and
developed similarly through two tectonic phases: (1) a syn-rift
phase that was started during the Permo–Triassic and continued
into the Jurassic, resulting in the formation of grabens and half-

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 5|

grabens and (2) a drift phase that began in the mid-Jurassic and
continued into the Paleogene. A later passive margin phase
began in the late Paleogene and continues to the present in the
Morondava, Mozambique, and Tanzania Coastal Provinces,
whereas in the Seychelles Province the drift phase continues to
the present because there is no significant sediment source after
the Seychelles-India breakup. The total thickness of the Mesozoic
to Cenozoic stratigraphic section is more than 5,000 m on the
outer parts of the continental shelf along the east Africa coast in
the Morondava and Mozambique Coastal Provinces and more
than 4,000 m in the Seychelles Province.
The four provinces and associated assessment units (AU) were
assessed for the first time because of increased exploratory
activity, recent discoveries, and increased interest in their future
potential. The assessment was geology based and used the total
petroleum system (TPS) concept. The geologic elements of a TPS
include hydrocarbon source rocks (source rock maturation and
hydrocarbon generation and migration), reservoir rocks (quality
and distribution), and traps for hydrocarbon accumulation.
Using these geologic criteria, the USGS defined four TPSs and
one AU for each TPS. The TPSs were defined to include Mesozoic to
Paleocene source rocks and conventional reservoirs. The Permian
to Triassic contains fluvial and lacustrine source rocks, and the
Jurassic contains restricted marine Type II kerogen source rocks
and marginal marine and deltaic Types II and III kerogen source
rocks. Types II and III kerogen source rocks of Cretaceous age
have been identified in the Morondava, Mozambique, Seychelles,
and Tanzania Provinces, and Types II and III kerogen source rocks
of Paleogene age have been identified in Mozambique,
Seychelles, and Tanzania Provinces. Permian to Triassic source
rocks contain 1.0 to 6.7 weight percent total organic carbon
(TOC), with some samples having as much as 17.4 percent. The
Early to Middle Jurassic restricted marine Type II source rocks
contain as much as 12 weight percent TOC. Upper Jurassic and
Cretaceous marine strata include (1) Aptian source containing
Type II kerogen, ranging from 2.0 to 4.28 weight percent TOC; and
(2) Cenomanian–Turonian source rocks containing Type II
kerogen, ranging from 1.0 to 3.0 weight percent TOC. All four AUs
contain Mesozoic and Cenozoic clastic reservoirs. Traps are mostly
structural within the syn-rift rock units and both structural and

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 6|

stratigraphic in the postrift-rock units. The east African provinces
(Mozambique, Morondava, and Tanzania) contain reservoirs that
mostly are associated with growth-fault-related structures, rotated
fault blocks within the continental shelf, deep water fans, turbidite
channels and sandstones, slope truncations along the present-day
shelf and paleoshelf edge. Permian to Triassic sandstone and Late
Jurassic reefs and platform limestone also are possible reservoirs.
The primary seals are Mesozoic and Cenozoic mudstones and
shales. The Seychelles Province contains possible reservoirs in
Permian to Middle Jurassic rift-related sandstones, Middle Jurassic
carbonates, Lower and Upper Cretaceous turbidite sandstones,
and Tertiary carbonates. The primary seals are intraformational
shales.

The Solutions in for petroleum exploration errors are to

 Reconstruct the paleogeography of Africa as it influenced
the regional supply of turbidity to Cretaceous margins and
thus high-grade basins and regions for 3D/DHI risk reduction.
 Develop technologies for exploring for stratigraphic traps
below the DHI floor.

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 7|

  Identify further ‘sweet spots’ for exploration in the East
African rift system with minimal direct data on these basins’
sediment fills and analogues from the Cretaceous rifts.
 Identify regions of maximum trap preservation potential in
basins with complex structural histories, particularly on the
East African margin.
 Accurately reconstruct the burial and temperature history of
onshore basins containing developments of the major
African source rocks to identify where maturity has been
underestimated or wrongly timed.

CASE STUDY – EUROPE:

We can now proceed to talking about our next case study
which is Europe, but firstly let talk about the geological society of
Europe. the Geological Society of London (GSL) was founded in
1807. It is the oldest national geological society in the world and
the largest in Europe.

It was

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 8|

Incorporated under Royal Charter in 1825 and is Registered
Charity 210161.
The Society is the UK national learned and professional society for
geology with a worldwide Fellowship (FGS) of 9000. The Society
has the power to
Confer Chartered status on suitably qualified Fellows, and about
2000 of the Fellowship carry the title (CGeol). Chartered Geologists
may also obtain the
Equivalent European title, European Geologist (EurGeol). One fifth
of the Society’s fellowship resides outside the UK. To find out more
about the Society, log on to www.geolsoc.org.uk. And the
Conference Chairman and Joint Editor-in-Chief is Tony Dore Statoil
UK Limited, London, England.

On 29 October the Argentine Congress approved an

amendment to the Federal Hydrocarbons Law which will improve
investment conditions in the Argentine oil and gas industry (the
“Amendment”).

The Amendment represents the most significant change to the

Federal Hydrocarbons Law since its enactment in 1967. It improves
investment conditions for the Argentine oil industry in a number of
ways, including: (i) extending exploration and production terms,
(ii) creating a special type of concession for unconventional
hydrocarbon projects with longer terms and lower royalties, (iii)
capping royalties and bonus fees, (iv) reducing Government-take
in certain types of projects, and (v) reinstating the right to export a
percentage of oil and gas production while maintaining abroad
the export proceeds. The benefits introduced by the
Amendment are available to both new entrants and existing
players.

Importantly, the Amendment has been supported by both the

Federal Government and the Organisation of Hydrocarbon
Producing Provinces (“OFEPHI”). The initiative was also promoted
by Argentina’s state-owned oil company, Yacimientos Petrolíferos
Fiscales (“YPF”).

The expectation is that the Amendment will create the regulatory

environment necessary to support and attract long term
investment in the oil and gas upstream sector in Argentina. This is

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 9|

particularly important for provinces such as Neuquén which will
require extensive foreign investment if the huge shale formations
found in the Vaca Muerta shale play are to be developed.

The key changes introduced by the Amendment to the Federal

Hydrocarbons Law are:

I. Exploration Permits

The Amendment establishes a new distinction in the duration of

exploration permits depending on whether the exploration is
targeted at conventional or unconventional prospects. Where the
objective is to explore for conventional hydrocarbons, the
Amendment reduces the maximum term of an exploration permit
from 14 to 11 years (two periods of three years and an extension
period of five years). For unconventional hydrocarbon exploration
permits, the Amendment establishes a new maximum term of 13
years (two periods of four years and an extension of five years).

The Amendment also removes the existing restriction which

prevents a company from holding, directly or indirectly, more than
five exploration permits and relaxes the acreage relinquishment
requirements that apply during the term of an exploration permit.
Specifically, the Amendment eliminates the current obligation on
a permit holder to relinquish 50% of the acreage at the end of the
exploration permit’s first period; however, the Amendment makes
no attempt to modify the obligations to relinquish 50% of the
acreage at the end of the second period before entering the
extension period. This relaxation of the relinquishment requirement
recognises the particular requirements of unconventional
hydrocarbon exploration and exploitation, with economic
production often only achievable if large areas can be exploited
given the disparate nature of many shale plays.

II. Exploitation Concessions

The Amendment also introduces new exploitation periods for

concessions. With the introduction of the Amendment,
exploitation concession terms will be as follows:

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 10 |

 i. For conventional hydrocarbon exploitation projects, the
concession term remains at 25 years.
ii. A new type of concession has been created by the
Amendment, the “Unconventional Exploitation Concession”
(“UEC”) with a longer term of 35 years. The first five years of a
UEC may be allocated to a “Pilot Project” to determine the
commerciality of the field (we consider the details of the UEC
more fully below).
iii. For offshore fields, the Amendment extends the concession
term from 25 to 30 years.

A substantial modification introduced by the Amendment is that

concessionaires will have the right to request multiple extensions,
in each case for periods of up to 10 years, notwithstanding that a
concessionaire has already obtained an extension before the
Amendment passed into law. This means that, unlike the previous
legislation, there would be an express right for a concessionaire to
request more than one extension without a limit. A number of
conditions must be satisfied by a concessionaire before it will be
granted an extension. The concessionaire must have complied
with its obligations under the exploitation concession, the area
subject to the extension request must still be producing
hydrocarbons and the request must be filed at least six months
before the expiration of the concession.

The Amendment also introduces some important fiscal changes

associated with concession extensions:

i. The State (National or Provincial, depending on the location

of the hydrocarbon field) has a new right to increase the
current 12% royalty rate on actual sales prices (see section VI
below) by a further 3% in the event an extension is granted,
up to a maximum royalty rate of 18%. This means that the
relevant authority may increase the rate by 3% upon the
grant of the first extension (taking the rate from 12% to 15%)
and by another 3% upon the grant of the second extension
(taking the rate to 18%); subsequent extensions will not result
in further incremental royalty rate increases.
ii. The State may also impose an “extension bonus fee”
equivalent to 2% of the applicable oil and gas price of 1P
(proven reserves) existing at the end of the concession.

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 11 |

 CASE STUDY – UNITED STATES OF AMERICA:
Now we can proceed to our final case study which is the
United States of America, America does not have a lot of oil
wells but that does not mean they don’t have petroleum a lot
of geologists petroleum geology is not only about finding oil
wells and oil discovery it also helps in the production of oil and
America as a place have a lot of oil producing industries.

The association in charge of petroleum geologist in America

is AAPG (American Association of Petroleum Geologists) they
have made a lot of research worldwide pertaining to petroleum
geology. America has a lot of dry wells, Texas accounts for about
36 per cent of the entire crude oil production in the United States.
The state had 196,396 producing oil wells at the end of 1961.
Production has not increased along with that of Louisiana and
Wyoming, particularly because of strict state controls on
production. At the end of 1961 U.S. reserves amounted to some

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 12 |

31.8 billion barrels, a net gain of 145 million barrels for the year. In
addition, natural gas liquid reserves increased by 233 million
barrels to a total of 7 billion barrels. Natural gas reserves rose 4
trillion cubic feet to a total of 267.7 trillion cubic feet. The main
increase in crude oil reserves was in Louisiana, with a net gain of
146 million barrels.
In 1961 pipeline mileage in the United States was more than
53,200 miles, compared with 9,000 miles just prior to World War II.
The 1960 volume was 2,865,000 barrels a day, including gasoline,
kerosene, distillate, liquefied petroleum gas, and natural gas
liquids.
Crude oil production outside the United States climbed to some 15
million barrels daily in 1961 for an increase of nearly 11 per cent
over 1960. In North America, Canada's production rose nearly 17
per cent and Mexico's production about 8 per cent. In South
America, Argentina boosted its production to nearly 232,000
barrels daily for a gain of 35 per cent, and Brazil's production rose
to about 95,000 barrels daily, or a gain of 18 per cent. Increases
were also reported for Western Europe, particularly in West
Germany and the Netherlands.
Demand for petroleum products in the United States rose only
moderately as increases in gasoline use were partly offset by
declines in the demand for residual fuel oils such as boiler fuel and
gas-manufacture oils. Domestic demand for petroleum products is
estimated at about 10.2 million barrels daily in 1962, a gain of
about 420,000 barrels a day when compared with 1961.
A significant development in pipelines has been their
increased use by the military to move jet fuel directly to major air
bases. Another development is the delivery by pipeline of aviation
gasoline and commercial jet fuel to municipal airports.
At the end of 1961 U.S. reserves amounted to some 31.8 billion
barrels, a net gain of 145 million barrels for the year. In addition,
natural gas liquid reserves increased by 233 million barrels to a
total of 7 billion barrels. Natural gas reserves rose 4 trillion cubic
feet to a total of 267.7 trillion cubic feet. The main increase in
crude oil reserves was in Louisiana, with a net gain of 146 million
barrels.

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 13 |

 CONCLUSION AND RECCOMENDATION
I conclude that the application of geology in petroleum
exploration and exploitation is very essential. This report has made
us understand that without petroleum geologist, petroleum
exploration and exploitation may be very hard to do or even
impossible because geochemist handle most of the work which is
the discovery of petroleum and also the production of the oil.

I would also recommend that In-house seismic technology skills

reduced risks to acceptable levels of danger and also that more
careful methods should be adopted to make petroleum
exploration easier.

REFERENCE

Microsoft ® Encarta 2009.

Globe Business Publishing Ltd

Wikipedia, the free encyclopedia

WWW.EOLSS.NET

Geomore Ltd ® 2014

© EAGE 2014

© AAPG 2014.

© Durojaiye Gbenga ® 2014

APPLICATION OF GEOLOGY IN PETROLEUM EXPLORATION AND EXPLOITATION 14 |

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