Reframing Exploration Strategy Optimizes Project Value
Authors: Carpenter Chris 
Published: December 2018

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 187143, “Maximization of Major Oil and Gas Project Value at Identification/Access Stage by Reframing of Exploration Strategy,” by V. Orlov, R. Oshmarin, A. Bochkov, SPE, and Y. Masalkin, Gazprom Neft, and S. Yakovlev, V. Ulyanov, and M. Danilin, NIS, prepared for the 2017 SPE Annual Technical Conference and Exhibition, San Antonio, Texas, USA, 9–11 October. The paper has not been peer reviewed.
The conventional approach to project-exploration strategic planning at the identification or access stage is focused usually on the confirmation of the presence of hydrocarbons and the reduction of uncertainty. At the end of the appraisal stage, the main purpose is to create a successful business case. However, a focus on the economic value of the entire project at the identification stage may lead to optimal exploration programs and increasing project expected monetary value (EMV). The objective of this case study is to describe a specific approach to establishing an exploration strategy at the initial stage on the basis of not only uncertainty reduction, but also early business-case development and maximization of future economic value.
Project Framing on the Basis of Geological Options and Uncertainties
The Pannonian basin, part of the Alpine orogenic system, is the largest Neogene basin in the intra-Carpathian area, surrounded by the Alpine, Carpathian, and Dinaric thrust belts and characterized by anomalous high-heat-flow values. Continental collision and shortening recorded in these thrust belts and the Pannonian basin extension with associated magmatic events were reported to be the main drivers of basin development. The Pannonian basin is an aggregation of extensional and transtensional Neogene depressions separated by coeval uplifts.
The basin is fed by three main sedimentary sources: the Eastern Carpathians in the north and the Apuseni Mountains and Southern Carpathians in the east. The main sediment transport direction is northeast/southwest, but small-scale deltas prograde westward locally, sourced by the Apuseni Mountains and the South Carpathians. These differently oriented deltas merged in the Tomnatec depression.
The latest significant onshore basin in the study area was discovered and developed in the late 1950s to the early 1960s. Approximately 68 oil structures and 66 gas structures were documented, and most production is concentrated in or around the deepest depressions, which most likely contain mature source rocks. More than one-quarter of the oil discovered in the entire basin is found in three fields.
To analyze all available geological information and to increase exploration success, a Pannonian basin model was created, involving more than 40 team members from several countries and different scientific institutes over a 2-year period. The results of the basin modeling showed that, in terms of the licence blocks, some zones have a high probability for the detection of hydrocarbon reservoirs. The study area is within a depression; the main source rock is clay marl of the Endrod formation.