Risk Mitigation Revisited:

Solving the Puzzle

Melbourne, Australia • 17 –19 April 2015
R. Gordon Bloomquist, Ph.D.
Consultant

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 1
 Solving the Puzzle

For the past several decades

governments and donor
organizations have provided “Risk
Mitigation” for geothermal drilling
in a number of ways.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 2
 Solving the Puzzle

The most common of these have been:

• Grants
• Cost Sharing
• Soft Loans
• Loan Guarantees
• Drilling Insurance
• Tax Benefits

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 3
 Solving the Puzzle

But is this really Risk Mitigation???

Or is it, in truth, only a way to mitigate
financial loss due to the drilling of
‘dry holes’?

Shouldn’t Risk Mitigation really be

better focused on improving drilling
success?
.
© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 4
 Solving the Puzzle

Internationally it is generally
recognized that less than 50% of
production wells drilled in green field
situations are successful.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 5
 Solving the Puzzle

There are many that try to convince us

that ‘dry holes’ could be used as
injection wells – so they are not really
unsuccessful.

But Can They??

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 6
 Solving the Puzzle

Even in developed fields the drilling of

successful wells seldom exceeds 80%
and I have seen all too many examples
where it is more like 60+%.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 7
 Solving the Puzzle

So let’s look at Risk Mitigation as

improving success in the drilling of
production wells – not only at the
exploratory phase of a project, but
through well field development and
throughout the life of the project, as
replacement wells are required.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 8
 Solving the Puzzle

The goal of this course is to focus your

attention on how to improve your chance of
drilling successful wells rather than simply
looking for ways to mitigate financial risk
from drilling of unsuccessful wells.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 9
 Solving the Puzzle

But that does not mean that “Risk

Mitigation” – as we have generally
considered it – is no longer needed.

It just means that financial support, in

whatever form it may be provided, will
result in greater efficiency in its use.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 10
 Solving the Puzzle

So how do we go about improving

efficiency in siting and drilling wells
and increase the chance of drilling
successful wells???

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 11
 Solving the Puzzle

The speakers will be providing

lectures over the next two days that
will provide insights into how that can
be accomplished through:

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 12
 Solving the Puzzle

• Optimizing Exploration
• Data Acquisition and
Management
• Conceptual Modeling, and
• Planning and Conducting
Drilling Operations

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 13
 Solving the Puzzle

So why the puzzle?

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 14
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Think of it as a 3-dimentional model

representing your resource area.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 15
 Solving the Puzzle

Unfortunately, where you can turn

the cube freely – top to bottom and
side to side – to help you solve the
puzzle, you have to depend upon
data obtained from surface
exploration and drilling to help solve
the puzzle and to develop a robust
3-D model of the resource area.

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 Solving the Puzzle

Only then should you bring in a state-

of-the-art geothermal drilling rig.

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 Solving the Puzzle

And never discount the

importance of data:
• Data Acquisition
• Data Analysis
• Data Management
• Data Storage, and
• Company-wide Accessibility to
all Data

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 18
 Solving the Puzzle

The Data not captured today or lost

tomorrow could be the key to
drilling a successful well next
month, or 10 years from now.

© IGA Education © Reducing Drilling Risk - From Exploration to Field Management Gordon Bloomquist, 2015 19
 The End

R. Gordon Bloomquist, Ph.D.

gordon_bloomquist@hotmail.com

Nørremarksvej 12A
4572 Nørre Asmindrup
Denmark

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