Offshore Drilling Prospects Could Benefit from Seismic Research

While MicroSeismic focuses our technologies on onshore drilling- for now, it was still disappointing news from the US Department of the Interior's Ken Salazar last week, which will allow offshore drilling in areas where our industry is already active and prohibit drilling in areas that are potential hot beds for untapped oil and gas resources.

Erik Milito, API upstream and industry operations group director said, "While US oil and natural gas production is increasing today, this is largely due to the development of shale oil and natural gas on private lands in North Dakota, Pennsylvania, Texas, Arkansas, Louisiana, and elsewhere—and because of leasing and development on public lands and federal waters initiated many years ago."

"We need a robust strategy for future development of offshore areas and BLM-administered lands because they are and will continue to be important to the nation's oil and natural gas production," Milito maintained. "We need to be doing the right things today to be able to meet our nation's energy needs for tomorrow."

Salazar's statement was most heavily critiqued in regards to the proposed 2012-17 Outer Continental Shelf (OCS) leasing areas, which the Department said would make more than three quarters of the estimated oil and gas resources available off US coasts. The Obama administration based this estimate on data collected in the 1970s without giving the industry permission or an opportunity to do 3D seismic mapping in OCS areas which were closed for 25 years, Milito said.

"We won't know what's there until we're actually out there and doing the tests and drilling," he said. "But our experience has shown us, particularly in the Gulf of Mexico, that what we find once we do is substantially more than what was expected."

Ironically, the E&P industry has called the Gulf of Mexico "the dead sea" twice since it began drilling in the nineties, but as technology advances, more reserves have been discovered with more on the horizon.  In areas off of the Eastern Seaboard that have not yet benefited from seismic research, the possibilities are limitless.   Considering it can take up to ten years to get product to market once it's discovered, there is little hope that the burgeoning petroleum needs we will face in 10 years (given current consumption) will be met.

Milito has urged, and we at MicroSeismic do as well, that the administration reconsider and schedule lease sales in the eastern Gulf of Mexico (largely closed by congressional moratorium) and off Virginia's coast, where a lease sale was scheduled as part of the current 5-year program but canceled following the 2010 Macondo tragedy. Sales off Alaska which have been scheduled toward the end of the next 5-year period should be moved up, especially if Shell Exploration Co.'s Beaufort and Chukchi Sea tests produce positive results, he added.