17	The Next Exploration Surge: Success into the 21st By ANTHONY RAMLACKHANSINGH

Petroleum is increasingly difficult to capture. The odds of finding a significant field decreases with each passing year. The next generation is going to live on an earth which will be stressed as never before. The earth science industries will be challenged to provide more and better information about the interior of the earth in order to help find, extract and utilize the earth's resources wisely, to protect humanity from the ravages of geological hazards and to dispose of waste products safely and permanently.

As explorationists, we have to play our role in the whole socioecological system. However, our primary function is to continue to explore and produce oil, gas and condensate, to ensure a reasonable standard of living for all of the people of the world.

I would like to share three quotations with you that will summarize this presentation -

"We are about to see the beginning of a renewed surge in activity. A window of opportunity for petroleum exploration will be open for a few years, until enough oil is found to cause control of the market to slip away from OPEC's grasp. Overseas areas, closed to exploration by the traditional companies for many years, will become accessible, creating new opportunities for exploration" -by Roy 0. Linosett, Tecknica Int., in "The New Wave of Exploration".
"It is however, the deeper revolution in technology that managers must understand, appreciate and ultimately become a part of, if they are to keep pace with the new demands of competition" -Jai Jaikumar - Harvard Business Review.

"The computer based company with a dedicated and integrated philosophy can beat these odds and grow. A foot-dragging company, one that will not embrace rapidly changing technology, will wither and die" - William F. Wilson, assistant to the President of Placid Oil Co., Dallas, Texas.

BACKGROUND
"The past is the key to the future". In order to predict what would contribute significantly towards the success of the next exploration surge, we need to understand the causes for growth and decline in the exploration industry in the past. If we can learn of the reasons for the fluctuations, we may gain at least some ability to predict, and possibly, to influence the future of our industry.

This exploration industry has gone through two major cycles of growth and decline and this can be attributed to two major factors:
(1) Economics and the Concept of supply and demand

(2) Technology development, and it can be demonstrated that the stringent effect of economics has been at least as important as technology in the recent rise of exploration activity. Explorers today are simply very exhaustive in their evaluation and careful when they drill.

THE CONCEPT OF SUPPLY AND DEMAND
Generally, a shortage is followed by higher demand and prices. OPEC's tactic since the group was formed has been to create a shortage by choking off the supply and then raising prices in response to the resulting demand. The market response to higher prices is more exploration, which results in increased production in non-OPEC countries. However, there were two periods of exploration which came as a result of the economic situation. In the 1940's, the petroleum potential of a large number of foreign countries remained relatively unexplored because of the war.
After the war there was a demand for petroleum products which resulted in increased exploration activity. The boom during the 1970's was the natural result of exploration discoveries in many of the prospective, relatively unexplored areas of the world, outside of OPEC's control, such as the North Sea, Mexico and Alaska. However, each time a surplus was created, it placed downward pressures on prices. This in turn triggered long declines in exploration activity. However, whatever the cause, OPEC regained the control of prices each time.


The increased supply associated with these two boom periods had negative effects on exploration activities -
(1) Countries expropriated or nationalized their petroleum industry in order to increase income by simply increasing production from existing reservoirs.
(2) Countries rush their products to the market in order to capitalize on the price opportunity.
(3) Supply soon equalled demand and brought a softening of prices.
(4) Investment in exploration did not keep on par with exploration activities. Income was spent in other areas. Countries were borrowing and spending beyond their limits on unproductive sectors and, as a result, found themselves in economic chaos. Since then, many of these countries have been faced with an alarming drop in their reserves and hence their income, at a time when they do not have the finances nor the infrastructure to embark upon exploration programs. Indeed, they found out that exploration is a high-risk business in which no government should find itself. As a result, the atmosphere is just right for joint venture arrangements in overseas areas creating new opportunities for exploration.

TECHNOLOGY
Petroleum discovery also runs in waves, driven by technology. Each new petroleum technology acts like an effective subsurface sieve, creating a temporary surge in discoveries by sifting out the reservoirs which are revealed by the new technology, but then tapering off in effectiveness until the next technological breakthrough arrives.
The continued enhancements of the reflection seismograph since its invention in the 1920's, has been and continues to be the primary technological advancement, providing better resolution of the subsurface geology than was previously possible. The chronological sequence of major enhancements of the reflection seismograph, which resulted in surges in exploration activities, are outlined as follows:
(a) 1950's saw the introduction of the analog reproducible recording, which resulted in continuous seismic sections for improved visibility of subsurface geology.
(b) 1960's saw two (2) new areas of development, which initiated a relatively long rise in exploration activity and discoveries:
Stacking and digital recording and processing; and Bright Spots, inversion techniques and several computer techniques.
(c) 1980's saw the next major surge in this technology, involving 3-D surveys. This allows for a tighter networking of subsurface seismic reflection data, which gives a clearer vision and better definition of the sub-surface geology.
For now, the seismic signal remains the only significant remote sensing tool available to extract information from the sub-surface. However, as will be discussed later, the seismic signal resolution is much less effective in defining stratigraphic traps and would have to be integrated with other specialized reservoir management tools in order to precisely define new reservoirs. The most important point to be made is that there is growing realization that the seismic signal itself is not the final answer product.
The lesson to be learnt is that each new invention or enhancement resulted in an increased surge in exploration activity which created a surplus in oil production and placed downward pressure on prices. And as a result, non-OPEC countries fell into the trap of supply and demand and have largely created their own economic difficulties.
The next wave of technology should provide us with the ability to sweep the remaining reserves from the subsurface, and an integrated exploration approach would be the primary technology required to achieve this measure of success. Hopefully, this time around, we would not repeat our mistakes.

TRAPPING MECHANISMS
The technology is available to successfully take us into the 21st Century. It is continuously evolving to achieve better resolution of the sub-surface geology. It needs to be integrated. Do we have remaining reserves to justify the effort necessary for the next surge in exploration to be meaningful and successful enough to create additional reserves, and so allow a reasonable standard of living? This brings us to another question - Are there traps present to generate the reserves needed?
Today, most of the known oil in the world is located in structural traps. This is understandable since subsurface structure often has some vertical expression and this is the most reliable measurement made by the reflection seismograph, making it a relatively easy target to find. With most of the structures found, attention in the last few years has turned increasingly towards stratigraphic traps.
Stratigraphy appears to be the major component in most of the smaller fields, although some structural elements generally have a role in gathering the petroleum from the source rock and concentrate it in the trap. Stratigraphic traps rarely have any vertical expression which would allow them to be clearly defined by conventional seismic display. They are slippery objectives and no consistent criteria exist to define them. As a result, to identify these objectives, requires a new approach.
Once a reservoir is found, the structural component often becomes less important. There is increasing awareness of the importance of lithology, stratigraphy, sedimentation, and the characterization of the internal parts of the reservoir, using advanced exploration techniques, in the total subsurface process.
As a result, there is growing realization that the seismic signal itself is not the final reservoir analysis. Because of this, successful exploration into the 21st Century requires an interactive process of integrated high-tech multi-disciplinary teams.
The reality is that there is probably as much oil to be found as has already been found. The majority of discoveries will, however, be in very small fields with less than 25 million barrels of reserves, and the majority, closer to 1 million.

EXPLORATION TERRITORIES
Where to Explore?
The technology is available. Exploration activities are open in overseas areas that were previously closed to exploration. Hydrocarbon traps are prevalent. So, although five OPEC countries control the majority of the known world reserves (Fig. 1), the fact is, most of the world is relatively unexplored.
In Fig. 2, the chart areas are proportional to the volume of sediments within each geographical division. Each well symbol represents 50,000 wells of all kinds that have been drilled.
Obviously, some areas are more oil-prone than others, but it is also true that the total amount of oil discovered increases with the density of drilling. Based on the assumption that the distribution of petroleum reservoir size is geometrical, i.e. the number of fields increasing as the field size grows smaller, there are still large amounts of petroleum to be found, but the majority of discoveries will be in very small fields. The problem is, how to find and produce it at a competitive cost, in order to be profitable.
It would be expected that the rate at which petroleum is discovered would follow a diminishing curve, but the rate of discovery has been maintained at a higher level than expected, largely due to the introduction of new technology. The challenge for the 21st Century is integration of these technologies.

EXPLORATION AND EXPLORATION ORGANISATIONS
"Good exploration and development is not a question of doing the right things, but of knowing the right things to be done" -Peter Parker.
We have the following positive steps in our favor:
(1) Potential for exploration activities especially in overseas areas.
(2) The traps are available and there are large amounts of petroleum to be found.
(3) The technology is available to exploit these reserves.
Then what are the keep-backs?
Three (3) issues must be addressed before we start to successfully explore into the 21st Century:
(1) A rigorous process of structured decision-making and engineering design.
(2) Integrated, high-tech, multidisciplinary teams.
(3) New technologies must be developed to support and enhance the teamwork.
The necessary components are process, teamwork, technology and integration.
(a) Process - Today, in addition to science, we have to focus on the process of exploration. By process, we mean a methodical approach to designing, conducting and interpreting results of exploration projects. The approach to this process involves Visualization and Creativity, using all available data, prediction of key unknowns and evaluation and interpretation of information (not data), which is the deciding factor in exploration success.
In summary, the next wave of technology must be one which improves our ability to extract more of the useful information contained in the data and be able to visually transform this information into creative geologic models, in order to predict the key unknowns in the search for hydrocarbons.
(b) Organization (Management, Manpower, Human Resources and Teamwork) - We are entering a new era that presents substantial exploration opportunities. Success in this era and into the 21st Century requires the most significant change in exploration techniques since the introduction of the seismograph, i.e. a change in the exploration organization. There are many exploration frontiers throughout the world. You had better put some budget into them to make sure you have a slice of the pie. However, we need the right exploration organization to tackle the invisible frontiers.

MANAGEMENT ORGANISATIONS
How do we build a quality organization? Have you the courage to build a quality organization? If you do, one of the first things you will need to do is get rid of your Human Resources Department.
The first, most important, absolutely critical, top priority role of a manager, is to select and hire. You do not want a Human Resources person trained in psychology to hire your people. The second most important job of the manager is to fire his mistakes. You cannot have consistent high quality unless you have the self-discipline to cull your mistakes. On the other hand, if you have a record of being generous, softhearted, forgiving, you are not a very effective manager. You attach importance to hiring. Your other managers take care of technical expertise. You never hire in batches. Keep looking until you find someone that you fall in love with. They are out there but are really hard to find. As oil finders, tell everyone, even mail clerks,
"You are coming into this company to help find oil".
There has to be a supporting environment that recognizes the teams as important and recognizes the total team contribution. For maximum results, you have to wean yourself away from the ladder and star systems. You have to create an environment where people can advance, grow, develop and achieve self-satisfaction and fulfillment. They have to be recognized by their colleagues and community. Don't expect to accomplish all this overnight. I am talking to you about a major change in the technology of finding oil which carries a parallel requirement of a major change in exploration organization.
"It can take a decade or more for managers to create large enough openings in the walls for technology to change the content of work radically" - Jai Jaikumar. You are planning to tinker a little bit with the old organization approach, which features control and lines of authority, built on the premise that the chairman is the only man in the organization with any real brains. A few vice presidents can be trusted with a few thousand dollars of authority. Everyone else has to report, report, report.

You have to trade control and routine for innovation, motivation and speed, and no one can go fast unless he has the authority.

Power - you have to pass it down or you are just kidding yourself. Your organization must be flat, but it must also be decentralized, deorganized, broken into autonomous profit centers which must be given extensive authority to make lease decisions, commit seismic, drill wells and find fields, or be replaced. The individual unit must be given space to grow and achieve. They must have the priceless freedom to fail. Give them a chance to pass the test. Reach down into the deep well of human creativity and set them free.
In organizations that adopt the characteristics of small companies, integrated teams will solve the problems and then be disbanded to form other teams. Individuals will not see their careers so much as increasing status but as broadening and deepening of their strengths. They should be compensated according to their achievements.
The American industry is involved in a management revolution which is shaking its foundations. We are watching the destruction of old style, bureaucratic, giant corporations. There is practically no record of a merger of big companies that has accomplished anything in the way of increased profits or efficiency. Small companies by comparison have not only survived but have developed incredible success records.
"That is why technological advancement often takes place and in a more complete way, at flatter, smaller organizations, with generalists" - Jab Jaikumar. The problem today is that companies have become too big and management has lost all foresight. They have gone astray from the objectives of an Exploration and Production company. They have lost touch with their people - it's a peculiarly human problem. When we strive for fame or riches or status - when we reach it - that becomes our main problem. We forget the virtues that got us there. Being a successful company is not its own reward.

The solutions are evident. Companies have to operate differently now than in the past, if they want to be successful they need to review their organizational structure. A clear perception of what you are trying to become is required. More of the same kind of exploration would not work. That policy is doomed.

They need to design integrated, high-tech, multi-disciplinary teams to look for previously invisible fields; they need to be very, very good in the use of advance technology; they need to be highly motivated, innovative, flexible and quick; they need other tools, including the seismograph, rock to log calibration and rock to seismic signal calibration.

EXPLORATION AND PRODUCTION (E&P) PROCESS SINCE THE 1930'S
Before we delve into the topic of integration and integrated teams let us observe the evolution of exploration process since the early 1900's i.e. the methods used to explore and produce oil, gas and condensate. Three (3) methods can be delineated as follows:

(a) Pre-1920's mapping of surface geology and oil seeps

(b) Pre-1990's - "Assembly line" or "Bucket Brigade" approach. This approach has been able to strip most of the structural traps in the subsurface. However, there is a problem with this method, it is a one-way street and very difficult to reverse the flow and send information to the starting point.

(c) Post-1990's - Integrated Approach with emphasis being placed on reservoir definition. The integrated approach arose out of the necessity to increase production to be competitive and profitable and in the forefront of leading technology, in the most cost-effective manner. Figure 3 illustrates the relative success of this approach over others in finding more oil at less cost here measured in the relative number of wells drilled to prove-up a unit volume of new reserves.
In this new exploration organization, management must have the right vision in order to develop the almost perfect team. Inventory your exploration, development, research and engineering groups and identify the really competent people - train the others - let them loose. We need to be hard-nosed about this. We need to list the people who qualify as competent specialists. These people must be allied closely and

INTEGRATION: (APPROACH, MANAGEMENT'S VISION, TEAM WORK)
In this new exploration organization, management must have the right vision in order to develop the almost perfect team. Inventory your exploration, development, research and engineering groups and identify the really competent people - train the others - let them loose. We need to be hard nosed about this. We need to list the people who qualify as competent specialists. These people must be allied closely and harmoniously with drilling and completion experts, operation engineers and land men. These people constitute the manpower for your special teams. A team cannot function unless every person is competent, otherwise the team's output cannot be trusted. A weak link destroys the chain and gums up the whole concept. But you can mould the individual, isolated, single gifts of good people with less than genius into a product of geniuses.

You need to have artificial technical intelligence, by constructing a brain with the right components you need in any given situation. You need to fashion a nearly perfect brain to handle any kind of technical problem. The brain is necessary to handle many of today's complex problems. The astonishing thing is that the components are simply normal, smart, competent people who have become expects in one particular specialty.

As managers, you have control to choose parts from a pool of consistently smart, dedicated people. You are dipping into the well of human creativity. It is the most productive technology that will ever be available to you. It is vast reservoirs, use it wisely, always be in touch, nurture it with love and care. Don't misuse it; it will revolt and this can only result in chaos and unproductivity.

You will not be able to compete unless you can build the new brains required to deal with complex technical problems and there are no easy problems left to solve that are not costly. You can artificially create a genius and still not solve particular problems. You are wrestling with Mother Nature and she can be mean. These are suggestions of how best to prepare yourself for the contest. You will still drill dry holes. It will take all your managerial wisdom, experience, cunning, ability and humanity to survive.

In tomorrow's complex technology, you would not be able to successfully put individuals up against the well-integrated teams. It will be no contest. In Fig. 3, the experimental group with the integrated techniques found more than twice as much oil in the same amount of time as the control group, and not only that, make most of their discoveries early in the program, with great benefit to the corporate cash flow.

In hiring, who constitutes a high-tech multi-disciplinary team? An organization can't go anywhere without people; they don't have to be geniuses. You can get by with good, solid, 120 IQ people - if they are motivated, dedicated, honest and can work hard. Don't expect people to really have their heart in finding oil for you. They only get warmed up if they are finding some for themselves.
There is an old saying, "He's really a smart fellow but he can't work with people". He's got to go somewhere else. Individuals will not see their careers so much as increasing status, but as broadening and deepening their strengths. They should be compensated according to their achievements. Indeed, this should be one of the characteristics of the reorganized company.

The main problem associated with integration of the team is the difficulty in integrating results from many different earth science disciplines. Generations of isolation and fragmentation of these disciplines have resulted in language and cultural barriers that have made communications and collaborations difficult. It is not unlike the fable of the blind men and the elephant when each had a different perspective and came up with a different conclusion.

The easiest and quickest way to overcome the integration issue would be to implement integrated computer technology, i.e. the client-server environment. However, one ingredient of utmost importance is the exploration team leader. You have to have skillful, intuitive team leaders. In exploration, they'd better be geologists. They are the ones who must sense a discrepancy, a loop that doesn't precisely tie, or perhaps a discrepancy which opportunity obliges you to overlook.

How do you choose managers or rather, good team leaders? The most critical factor is vision. People will follow almost anyone whom they are confident will find the right path. You can only judge a person on his track record. Has he found the right path be-fore? Has he shown vision? You judge all the other leadership qualities by the condition of his followers. If they are effective, motivated, harmonious, then he is good. Pay no attention to how he does it. Exploration leadership is a specialty. He has to be an oil finder.

In summary, these are the characteristics of the reorganized company. If you are going to change, you had better be gusty about it or forget it. If you cannot adapt to the new requirements eventually you would be extinct. Don't think that you can tame the old organization. What is required is commitment. Then all else will follow. "Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness" - W.H. Murray

NEW TECHNOLOGY
New technologies will be the key to the success of these multidisciplinary exploration teams. The 1930's saw the development of geophysical instruments which gave us a view of the earth's subsurface geometry. The 1960's digital revolution dramatically increased our ability to collect and manipulate data. Today we are experiencing an information (data) and communications revolution that will have an equally profound impact. The success of our exploration teams is going to depend on our ability to integrate results from many different earth sciences disciplines and the integration is going to depend heavily on communication among people.

In computers today, there are all kinds of data associated with the respective earth science disciplines. The challenge is to find, assimilate and interpret large quantities of this data from many sources, in many formats and representing many different scientific disciplines. This would require three (3) levels of communications:

(1) Link machines together so that they can store data and produce a common database with uniform access rules.
(2) Person to machine interface -a challenge more complicated than the machine to machine interface. Computer graphics and visualization will play an extremely important role.
(3) If we have effective person to machine interface, different people with different backgrounds will view the same data set in different ways.

The ultimate goal is to enhance person to person communications among the various disciplines by routing this communication through effective person to machine and machine to machine interface.

RESEARCH AND DEVELOPMENT
Technologies must be developed to enhance teamwork. There are two (2) models developed for new technologies to be made accessible to the user. In the Traditional Assembly Line (Fig. 4), it starts slowly, by the innovators who test and evaluate new technology. Once generally accepted, rapid implementation follows, leading to a period of maximum benefit to both supplier and the user. Users then apply the technology to help improve decision making and compares it to previous experience, and, sometimes, passes feedback through the same organization to the innovators who may use it to help improve the technology. The problems with this model/process are obvious. The source of the technology is separated from the application area. Delivery is often through a marketing organization, so that a barrier exists between innovators and users. Resulting in a lengthy time for successful implementation.

In the Improved Model (Japanese Model), Fig.5, users and innovators work side by side in the same environment. The new technologies are delivered directly to the user and improvements are quickly implemented by the innovators, while less successful options are soon tested and discarded.

A comparison of the two (2) models is immediately obvious. The challenge we face is to design, develop and implement new exploration techniques as quickly as possible and to make them work better than previous ones. Perhaps the greatest number of new exploration technology applications and the largest period of sustained improvement can be attributed to the digital computer.

To summarize, if we are to explore successfully into the 21st Century, we need to develop R & D Centers in the working environment. Therefore, given the tools and the capability to use them in new and different ways, new techniques will be developed, integrating data and knowledge to enhance the art of recognition of the elusive subsurface reservoirs.

(To be continued in Newsletter Number 18)

The Paper "Geophysical Exploration in Trinidad and Tobago, 1900-1990, Part 2: 1960