How to get more out of mature areas Imagine 4D seismic Jon Erik Reinhardsen, CEO Petroleum Geo-Services PGS is a leading company in marine geophysics Marine Contract Marine market leadership 45% of 2013 Revenues Marine Contract acquires seismic data exclusively for oil and gas exploration and production companies MultiClient Operations Diverse MultiClient library Productivity leadership Technology differentiation 8% of 2013 Revenues 45% of 2013 Revenues MultiClient initiates and manages seismic surveys which PGS acquires, processes, markets and sells to multiple customers on a non-exclusive basis Imaging & Engineering Operations supports Marine Contract and MultiClient with vessel resources and manages fleet renewal strategies Imaging and Engineering processes seismic data acquired by PGS for its MultiClient library and for external clients on contract and manages research and development activities Client focus | Global presence | Innovation leadership -2- From a Norwegian startup company, to a significant, international player in 20 years • Headquartered in Norway, listed at Oslo Stock Exchange • One of three major geophysical companies globally, with a 20-25 % market share • 2 350 employees - and growing • 65 nationalities represented • About 15+ % are Norwegian • Annual R&D spend of NOK 400 million • Invested NOK 10 billion in vessels and equipment since 2007 • 600 000 km² 3D MultiClient library -3- Oil production in UK and Norway is declining Annual Oil Production by Field Daily oil production in thousand barrels Daily Oil Production 4D Monitoring Source: NPD Source: BP Statistical Review 2014  Oil production peaked in late 90s both in UK and Norway  4D (time-lapse) seismic used since mid 90s  Statoil was the global pioneer  4D seismic now routine with proven benefits for improved oil recovery  Better 3D seismic data needed as basis for further improvement 4 What is strategically different in declining fields? • Remaining reserves in existing fields is smaller volumes (often less than 500’ sm3) • Critical to hit the “right spot” – Reluctance to invest in an area where you have drilled a dry well previously • Historical focus has been to have available “safe” wells for next years drilling program – Remaining reserves in a mature field is often seen as being (number of) wells – Lack of long term analysis and strategy? • Better understanding of the subsurface makes the needed long term plan for investments possible Improved resource utilization from better sub-surface understanding 5 3D seismic has improved significantly • Improved understanding of geologies in all areas of the world • PGS launched its multicomponent, broadband solution; GeoStreamer® in 2007 – Other broadband solutions have followed – However, multicomponent streamer is much more than broadband Enables exploration in complex geologies, and is key in mature fields 6 GeoStreamer® has revolutionized subsurface imaging -giving a much clearer subsurface image High resolution near surface broadband image (North Sea) Australia: Legacy 3D data • Fully de-ghosted high resolution seismic (2-200Hz) • Multi-purpose data suited for Exploration, Production and Field Development applications • Enables imaging with up- and down going wavefields Australia: GeoStreamer data 7 IT revolution… … turning noise to gold Conventional processing only focuses on reflections. Reflections Multiples Refractions Complete wavefield imaging gives clearer near surface image • Complete Wavefield Imaging (CWI) is a proprietary workflow for near surface velocity model building and imaging • CWI uses Primaries, Multiples and Refracted Waves accessible via GeoStreamer dual-sensor recordings 9 New technology important to understanding Johan Sverdrup… “You found what is now referred to as Johan Sverdrup – the world’s largest discovery last year. Why were you successful?” “We were thinking completely differently, and that led to the breakthrough. We used a new technology developed by PGS, called the “GeoStreamer” – a cable towed behind the vessel – and covered the entire area. That was absolutely crucial to understanding the field.” Hans Rønnevik Lundin Exploration Manager Offshore.no – 2011 PGS translation …as well as understanding why legacy wells came in dry Dry Well Un-tested VpVs anomaly Up dip 60 msec window up from base (black event on seismic) + shales sands HC sands - Time to well drives technology and innovation, and reduces cost Traditional paradigm: a series of “fit-for-purpose” (i.e., limited purpose) surveys Exploration 2D seismic Exploration 3D seismic GeoStreamer 3D seismic Shallow hazard survey Development 3D seismic Site survey Baseline 3D survey for time-lapse seismic Repeat surveys Repeat GeoStreamer surveys GeoStreamer paradigm: a single “full-purpose” survey used for exploration, development, shallow hazards, site surveys and baseline for 4D seismic and reservoir monitoring GeoStreamer reduces total E&P costs and shortens field development cycle time What is 4D? • 3D streamer seismic • 3D node seismic • 3D permanent monitoring seismic 14 A clearer reservoir image a pre-requisite for high quality 4D Conventional Data • Uncompromised resolution • Precise reservoir properties • Reliable rock properties without well control • Confident prospect delineation 15 4D seismic in the E&P asset life – Extracting more from maturing fields 4D Seismic Inversion ∆Sw, ∆Pp = f (∆Vp, ∆Vs, ∆ρ) Reservoir Model 4D Rock Physics ∆Sw, ∆Pp ∆Sw, ∆Pp = f (∆Vp, ∆Vs, ∆ρ) History match With seismically derived attributes 4D Imaging 4D Seismic Acquisition New acquisition Streamer+/or PRM Survey design Updated Dynamic Model ∆Sw, ∆Pp Drilling decision Rock Physics Permanent Reservoir Monitoring (PRM) – an alternative approach Cost Streamer Seismic Permanent Reservoir Monitoring - # of full survey jobs  Trade offs:  Cost  Repeatability (signal to noise ratio)  Operational flexibility ( seismic on demand)  Size of initial investment  Technology development Petrobras Jubarte PRM project – a global first Timeline: 2010: Initial topside installation 2011: Cable production 2012: Installation 2012-2014: Acquisition & Processing  Installation: 35km of OptoSeis Marine cable with 710 4C sensors deployed over 9 km2 Cables 300m apart, stations 50m apart  Turn-key project (manufacturing, installation and operation)  Active Seismic acquisition  Passive seismic recording  Data processing of active & passive data  Full project management  OptoSeis Marine is now a proven success Will towed streamer Electro Magnetics (EM) take 4D even further? Joint EM/Seismic creates new opportunities Unconstrained Inversion Seismically Guided Inversion  Combining EM with seismic data for reservoir thickness and volume estimations  EM more sensitive to saturation changes than seismic 4D seismic – revealing untapped potential • More advanced seismic technologies lead to more discoveries and better recovery of mature fields • Are oil companies sub-optimizing by not using best available technology? – Can governments accept potential sub optimal resource utilization? – What about E&P investors? • More surveys can be combined to the benefit of: – Discovery rate – Hydrocarbon resource utilization – Operators cost and time to production – Fisheries interaction – Environmental impact 21