Matthias Bichsel

What will it take for geoscience to deliver extraordinary results in the oil and gas industry? That was the question posed to panellists at the opening session of the GEO 2014 conference. Matthias Bichsel couches his answer in the form of seeming contradictions: established wisdom and unbounded imagination; doing things differently and doing more of the same. But on one point he is absolutely clear: innovation is necessary in every case.

Taking geoscience beyond the conventional

Your Excellency, distinguished speakers, ladies and gentlemen: Good afternoon.

I’m delighted to be back here again at the GEO Conference in Bahrain. I’ve been coming to this conference – as either a visitor or a speaker – from the start. I recognise a few familiar faces, but I’m also happy to see plenty of fresh folks.

This mix of young and old reminds me of the Rejuvenate Opportunity Now – or RON – workshops that Shell holds to refresh our thinking on how hydrocarbons formed in mature basins, how they moved around and where they’re hiding now. At these workshops, we bring together geologists who are currently exploring a basin and geologists who explored the same basin five, 10 – even 30 – years ago.

Hundreds of years of accumulated experience are pitted against minds that have not accepted the prevailing dogmas. Since Mother Nature always seems to be much more complex than what we imagine, questioning dogmas – and even busting them to pieces – is generally necessary to come up with new plays.

In our latest RON workshop, six new plays were conceived within one week of intense brainstorming. And drilling has already begun to test them.

Incidentally, we go strictly “old school” at the RON workshops: no electronics allowed. The participants – even those of the iPad generation – have nothing but coloured pencils, map-overlay sheets…and brains. In some cases, we’ve had to hold these workshops in warehouses so that there is enough space for the maps to be spread out on the floor and walls.

These workshops embody the paradoxical mixture that I think propels geoscience to go beyond the conventional: flighty imagination and well-grounded knowledge; doing things differently and doing more of the same.

Paradigm shift

Because there’s a good chance I’m the oldest panellist here today, I hope you’ll let me reminisce a bit more to explain what I mean.

When I got my PhD in geology, textbooks made a clear distinction between source rock (where crude oil or natural gas formed) and reservoir rock (where the hydrocarbons ultimately are found). Source rock and reservoir rock were always assumed to be in separate formations, because oil and gas have a tendency to move once they’re formed. In fact, the reason they’re found in voluminous accumulations is only because their upward passage is occasionally blocked by impermeable-rock seals.

But recent developments have shown how limiting that textbook paradigm was. Source and reservoir can be one and the same formation. In fact, they can even consist of the same basic rock – shale – that often seals conventional oil or gas traps. So source, reservoir and seal have in this sense become indistinguishable.

This paradigm shift has moved the industry from under the shadow of “peak oil” into the wide-open era of “diffuse oil”. Many countries that lack sizeable accumulations of conventional oil are now eagerly seeing whether they have any better luck with unconventional oil in shale formations. The same applies even more to natural gas. Even in my native country, Switzerland, which is better known for its hydropower than its hydrocarbons, there is interest in shale oil and gas, and several independents have taken up concessions.

This paradigm shift has also made ill-defined rock properties, like “fraccability”, much more important than they were in my university days. And it has highlighted the link between geomechanics and geophysics.

Geomechanics governs the way rocks crack. Geophysics, of course, is at the heart of seismic. They are both based on similar principles, but the former is based on static stresses whereas the latter is based on dynamic wave propagation. Wouldn’t it be great if one could reveal something about the other?

That, in fact, seems to be possible. We at Shell have used the relationship between seismic attributes and geomechanical rock properties to evaluate the estimated ultimate recovery per well in undrilled areas of the Montney formation in Canada. Much more information pertaining to the hydraulic fracturing of formations could be gleaned from new technologies related to seismic.

Data & computing

But in seismic, the name of the game is data – high-quality data. The more, the better. Shell now has 250 times more computing capacity dedicated to geophysical processing than it had 10 years ago. And we had better get ready to gather, process and visualise a lot more data.

For example, Shell is working to develop a wireless micro-electromechanical geophone system that can be scaled up to one million channels. This will provide much denser imaging of onshore fields and reveal much greater detail of key geological structures. We have also trialled in Qatar and the Sultanate of Oman a fibre-optic seismic acquisition system that can gather far more data in one go than ever before.

Standardisation & replication

Time for a reality check.

Achieving extraordinary results is not simply a matter of coming up with new ideas at workshops, or even capitalising on the exponential growth of computing power. Sometimes an existing practice or design – a technology – is pretty near optimal. In such a case, that technology has to be standardised so that it can be easily replicated everywhere to get the maximum value out of it.

Consistent focus on standardisation and replication means we are able to reduce the time between taking final investment decision on a project and bringing that project on stream. Even in the early stages of technology development, questions about scalability have to be asked and satisfactorily answered.

At Shell, we are currently focusing on seven technology “thrusts” for widespread deployment around the world. These thrusts were identified on the basis of how valuable the technology is expected to be and how well the technology’s deployment could be integrated into business plans.

One such thrust involves GeoSigns, Shell’s software for subsurface visualisation. This software incorporates 29 major proprietary technologies for interpreting seismic data. It allows more than 1,200 Shell users worldwide to standardise the workflow for the analysis of time-lapse surveys or the location of “sweet spots” in tight formations, for example. It will also facilitate knowledge-sharing among Shell’s geoscientists and save costs.

More standardisation is also needed in drilling and completing wells for unconventional-gas developments – the kind of approach that Shell is pursuing in a well-manufacturing joint venture with the China National Petroleum Corporation. We’re pursuing a “conveyor belt” approach in which standard pieces of equipment carry out different stages in the drilling and completion process. In this way several wells can be worked on in parallel, rather than having one customised drilling rig working on one well at a time.

So to quickly sum up: Geoscience can deliver extraordinary results when several things happen at the same time. A few I have already mentioned:

  •  a youthful exuberance that shoots for the moon without being weighed down by conventional dogma;
  • a drive to do things differently wherever the current performance is not good enough, as in linking the physics of seismic-wave propagation with the stress-and-strain mechanics of fracking; and
  • a drive to do more of the same wherever top performance is proven, as in certain seismic interpretation techniques or in the mass-production of wells.

Open innovation

Let me end by pointing out that, in every case, innovation is key– in geological paradigms, in data acquisition and interpretation, and even in standardisation. And innovation is often best stimulated by sharing ideas – much as the geologists at the RON – Rejuvenate Opportunity Now – workshops do.

Indeed, many ideas are worth sharing outside of RON workshops, because they gain strength by spreading. And as they spread and gain strength, they can set off a chain reaction of more innovation. The best innovation is infectious in this way.

We at Shell are big believers in this kind of “open” innovation, because it helps speed up developments that are likely to feature prominently in tomorrow’s energy system. To this end, we’re forging collaborations with companies outside our industry, we’re undertaking joint research projects with government and academic institutions, and we’re providing venture capital to early-stage technology companies.

These efforts too will help take geoscience beyond the conventional.

Thank you.