Being an Economically-savvy Explorer

Our Senior Geologist Kirsty returns to the Cognitive Whiteboard, this time she's sharing some thoughts about why economic factors are for geologists too!

To view a close-up of the whiteboard click on the image below:

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Hello, and welcome back to the Cognitive Whiteboard. My name's Kirsty Simpson. Here at Cognitive Geology, one of the things we want our tools to do is to enable geoscientists to visualize the economic impact of their decisions. This led me to think about how often working as a New Ventures geologist I was asked to be an economically savvy explorer. Why was I being asked to think about economics you ask? Well, fundamentally my job was to make money for the company just like everybody's is. 
So, when you're bringing opportunities in to your New Ventures team, as a geoscientist, if you see one that's technically interesting, it’s so tempting to just get stuck straight into your subsurface workflow, build your regional framework, do your play fairway evaluation, talk to the petroleum systems team and get a model built, and then go and work for your petroleum prospect workflow. Get your volumetrics, calculate your risks, and then go and speak to your economist. That's a really long workflow before you get to discussing the economics of your opportunity. What if that economist says to you, "This is never going to meet the thresholds. What are you doing? What are you bringing me?" Well, I would argue, there's another way of starting your workflow and that's by thinking slightly more economically. 
What you can do is you can start by thinking, "What are my company's economic drivers? Am I looking for production in the near to mid term? So, do I need to find drill-ready opportunities or discoveries that are ready for development? Or am I looking for prospects and leads because we need to fill our prospective resources inventory hopper?" Once you've decide what kind of opportunity you're looking for, that's when you want to start thinking, "Well, where am I going to look for it?" And one thing you might start with is a graph like this which tells you what the percentage contractor take per country is. And that way, you might identify number of countries, or regions, or basins that you want to start looking for opportunities in. You also need to consider the geopolitics of those regions because you want to be able to actually get in there safely. And also, you need to think about the market because don't find eight billion barrels of oil if you can't sell it to anybody. 
Once you've overcome those economic stumbling blocks or hurdles, that's when you can start your subsurface workflow, build that framework, and do that play fairway evaluation. Out of that play fairway evaluation, you can identify your yet to find, whether you're looking for oil or gas, whether you're looking in deepwater, on the shelf or onshore. And that's the sort of information you can take to your economist and ask her to do some scoping economics on. As a result of that, she can give you a MEV, a minimum economic volume, that you require to meet in order to overcome your company's economic threshold. And that way, after just a few weeks, you might be able to throw out some or all of the opportunities you've identified. If you throw them all out, great, just go back and start again. Or otherwise, you take the few that do meet that threshold into your detailed subsurface workflow. And this way, you screen more opportunities and the only ones that you actually take through this process to your final economic decision are the ones that are likely to make it over your threshold and the ones that you're going to get in front of the bid committee. That way, your management are going to see you as an economically savvy explorer. 
I think that's all I've probably got time for. Thank you for joining me at the Cognitive Whiteboard and I hope to see you again soon.