Failure marked Shell’s Gulf quest before massive discovery

HOUSTON – A decade before Royal Dutch Shell fired up production at one of the largest offshore facilities in the world, it drilled an expensive dry hole.

Salt canopies laying on top of massive oil deposits in the Gulf of Mexico baffled 1990s seismic imaging technology that Shell used to decide where it could hit its payload. In 2003, the European oil giant struck an area that stunned geoscientists: its oil prospect was no where to be found.

“We weren’t sure what happened,” Robert Sloan, Shell’s Mars B subsurface coordinator, said in a talk about Shell’s massive Olympus platform during the Offshore Technology Conference in Houston. “Did we drill into another basin? Was it a saline basin? What happened?”

A decade later, Shell’s Mars B field has come into its own as seismic imaging improved from its state in the late 1990s. It had essentially imaged oil reservoirs by “looking” straight down into the ocean. Seismic imaging had become a lot more complex and capable of seeing through stubborn salt formations.

Late last year, Shell brought two wells tied to its massive Olympus platform into production. And the Mars field,130 miles southeast of New Orleans, is now expected to produce 100,000 barrels of oil equivalent per day by 2016. Shell believes the Mars field has 4 billion barrels embedded in underwater rock.

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Under new reservoir modeling, Shell could see “an additional reservoir that we hadn’t seen in the earlier data sets,” Sloan said. Shell began to have “a lot more confidence” in its reservoir images around 2007, when it first used new advances to discover the West Boreas oil lode.

“West Boreas started shining through right off the bat,” Sloan said. “It was amazing how we had such an image below salt. It was very crisp data. When we first wanted to go out and drill another well in the Boreas, people kind of thought we were crazy. But this data was good enough to show its potential.”

Shell would eventually approve drilling into the Boreas again in 2009. Near its old dry hole, Shell found over 200 gross feet of sand with over 200 net high quality oil sand base.

“These wells confirmed what we saw in the seismic,” he said. The company is now drilling into a 12,000-foot thick oil column 22,000 feet below the surface of the Gulf. “We have a lot better understanding of what’s going on.”

Shell’s Mars B project adds to the company’s 190 wells and six floating structures in the Gulf, and is expected to produce 1 billion barrels of oil equivalent over its 45-year lifespan, said Derek Newberry, an executive with Shell Exploration and Production.

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It’s also the first deep-water project of its kind to expand an existing oil field operation in the Gulf. Shell has already produced 800 million barrels of oil from the Mars field with its first development project that first started producing in the 1990s.

“It’s really a great example of, as technology is advancing in our industry, how we can use it to open up new opportunities,” Newberry said. “We stuck with it even after we drilled the dry hole. We were fortunate to go back and make the discovery in 2009. Five years later, we’re contributing 40,000 barrels per day to the energy supply.”