Finding oil can be like searching for a needle in a haystack. So if we think about drilling a well, it's one tiny little point. And maybe a map that can be hundreds of kilometres wide.
And the well must find oil of size and value. What we look for at Tallow is big oil. Big volumes of light, commercial, monetisable oil.
And it must be extracted safely and cleanly. We look at all the aspects of the well design to be able to drill that well safely. This is the story of exploration at Tallow Oil. The drill bit will tell in the end whether the dream of the geologist and the engineer can come to fruition.
A story of people who are good at turning theory into shareholder value. So geologists, it's a bit like a treasure hunter and we're looking for the treasure. So there's lots of different clues that we look for. We look at little bits and pieces of rock, tiny little clues, that can tell us about the bigger picture.
One tiny little point on maybe a map that can be hundreds of kilometres wide and that's why treasure is hard to find. But there's a big prize at the end of it. To understand the task ahead, we must first examine how oil and gas is created and then trapped within the Earth's crust over millions of years. When we think about oil, the most important thing is the ingredients.
And the type of ingredients we're talking about are marine organisms. When they die, they fall to the bottom of the sea floor or the lake floor. And if the conditions are just right, if there isn't a lot of oxygen going on, and if there's a lot of sediments being deposited, we form a rock. and that rock is called a source rock. And that's what generates the oil in the right conditions.
In order for that source rock to turn into oil, it has to be heated. For every kilometer a sediment is buried, its temperature increases. Oh, excuse me. And it has to be heated to a temperature of about 100 degrees.
And when you heat it, we say that it's been placed into the kitchen. When we look at sediments in the earth, they're full of water. And oil, as you can see in any simple kitchen, you see the oil sits on top of the water. If nothing stops that oil, it will reach the surface.
So what's required to trap that oil is something called a reservoir rock. And a reservoir rock is a bit like a sponge, or even better, think of it like a sugar cube. When the oil reaches it, it will saturate all those little pores. You have the shape that's going to contain the oil, but then you also need a seal, something on top of it that's going to prevent the oil from migrating any further. That's what we call a cap rock.
The process starts with little more than a blank sheet of paper. Somehow they must identify places where the right environment and kitchen conditions may have existed to create and trap. We want to go for the porous.
It really starts with an idea. The ideas are in the minds of our prospectors, of our playmakers, of our geologists, of our geophysicists. I like that idea. We like to focus...
We don't focus very much on geological scenarios. We call these geological plays. What we're looking for is where the right conditions have been established to generate oil for it to be migrated and trapped in a reservoir. The salt can also be very difficult.
It all starts with plate tectonics. As the continental plates drift apart and they rift, and as these fault blocks drop down, they set up the geological conditions which provide the rift basin play. This is a brilliant example of a rift play.
Behind me you can see the basin bounding fault dipping down and that goes down to about three kilometers below the subsurface and out into the distance you can see the basin that's displaced downwards and basically when you get the sedimentary rocks against your basin bounding fault that is your perfect track and that's what we target. So if you use a sandwich as an example of a fault trap, and you imagine the layers of the sandwich are layers of permeable and impermeable rocks in the subsurface. As the rift opens up, these rocks get displaced relative to each other.
And if you end up with a permeable rock juxtaposed against a non-permeable rock on the other side of the fault, that would be a perfect fault trap for your hydrocarbons. So as a rift basin evolves, the central block of the rift drops down, the land level drops down, and water can flow in and fill the rift valley. Under the right kind of conditions, which tend to be warm tropical seas, we get carbonates such as reefs forming.
Reefs are extremely important because they are a reservoir rock that we can use to trap oil and gas. These limestones, carbonates as we call them, set up a great oil play. These are 60% of the world's oil that's found in carbonates. Now under certain settings, certain times, the rift basin will become isolated.
Now that water can evaporate. Water can evaporate quite quickly in geological time. Still over millions of years, but quite quickly. And lead to the deposition of kilometres of evaporated salt.
This salt body here is potentially something... As you can see, you've got the salt stock coming up in here and the salt canopy here. If we start chasing that play, we could start to generate a lot more prospects.
Salt is an impermeable material which actually over geological time behaves as a fluid. So as sediment loads on top of the salt, it can contort into various different shapes and structures and effectively traps hydrocarbons. This isn't dissimilar to what we see in a lava lamp when it heats up and we get plumes of fluid rising.
One of the key issues we have is to be able to, we cannot directly see the rocks below ground, so therefore we need to look for analogues above ground. So for example, Clare Basin is a very good analogue for turbidites, and turbidites are typically what we are looking for when we look for stratigraphic traps. Well, as rift basins form and as salt basins form, they create hollows. These hollows or basins get filled by sediment washing in, and these sands can often form what we call stratigraph. In big storms, sands that were deposited on the shelf can move as underwater avalanches and travel down the slope and get deposited as turbidites.
And what we're looking at here is a sandstone reservoir, effectively. It's the kind of thing that we're looking for when we chase deepwater stratigraphic traps. So here we have shales that could be seals, they could be source rocks.
Here we have a turbiditic sandstone, this would be our reservoir. If we had a shale above this again, that would act as a seal. The geologists must now try to predict where the oil lies. Regular multidisciplinary meetings, known as plays conferences, are held to help incubate ideas.
So there's a bit of chaos and in the morning there's obviously lots of people running around trying to get stuff printed out. Printers aren't working but there's a lot of excitement and you know we all put a lot of time and effort into doing these things. The idea of the Place Conference is to spark new ideas. It's really the first link in the chain of the whole exploration.
We do this rather like playing a game of rugby. We pass the idea around, we look for the opportunity, we look for the break and we celebrate when one of us can make a break through and score a try for the team. I certainly can learn a hell of a lot more from talking to someone for five or ten minutes than I can from reading a book. It is, it's like a light bulb switching on sometimes with people.
It's marvellous. It helps to minimise the communication breakdown and will get to the finish line much quicker, much cheaper. I'll be really excited and, you know, if we have continued success, the sheer amount of exploration we'll need to do in the next few years is going to be amazing.
But the challenge is only just beginning for our teams. Ahead of them is the task of convincing the rest of the company that they have ideas on which it is worth spending huge sums of money. GELT is a leadership team that looks after our...
exploration endeavours....generating a high risk but very high reward prospect. So we have 15 of us on there, probably 300 years of exploration experience which gets applied to everything that we do in exploration. Any activity we do, anywhere we invest money, has to go through the gelt.
To turn their dreams into reality, the teams must first gather hard evidence to support their theories. In the early days of oil exploration, prospectors would have drilled every structure where they thought there was oil or gas. If you think of children on a beach searching for crabs, they may turn over every stone there is when they're looking for them. The smart child is the child who looks for clues, maybe bubbles under a rock, and quickly finds the crab. For us nowadays we have modern seismic, we have modern gravity, that allows us to pinpoint where we want to drill and means we have much greater success rates with our exploration wells.
One team has just used a technique called full tensor gradiometry to map a rift play. We would typically use FTG to plan more detailed studies of the geology of the basin. We can see areas where you might expect to find sedimentary rocks and your denser rocks would be shown up in oranges and reds it came from the US military they use FTG to navigate their submarines you know when you're shooting along at 30 knots down a chasm you need to know where the rock is before you take a right Surveying from the air produces promising results, but can only show a partial picture.
Now data needs to be collected on the ground. So from the gravity data we plan our seismic campaign because we need to get onto the ground and get the seismic through the subsurface so that we can plan where to put our well. The vibrator trucks come along, they generally travel in lines, straight lines along the surface of the earth. These lines are planned from elevation and gravity data to get perfect extent of the basin. The geologists work with local archaeologists to survey the ground ahead of the seismic teams.
Seismic trucks come along and they generate a seismic sweep that gets reflected and refracted off lithologies in the subsurface back up to geophones where it gets recorded. And the recorded data gets sent to this control room which you see behind me. This gives us a feel for basin depth, extent, structure and stratigraphy and ultimately where we're going to plan our well.
Once the data comes to Dublin, the interpreters will use it to build maps. You can see the key horizon that we picked in green. And then use those maps to try and identify potential trap features which will ultimately become targets for drilling.
Most of these folds, they're clearly... die out as well that's pretty good as a seismic interpreter we can only give a prediction with a probability of success and really the proof of the pudding is in the drilling but a bit more work we should be ready to take this to the gelt but before presenting to the global exploration leadership team the teams also need to ...to assess whether a lead is commercially viable and evaluate the physical challenges of drilling. As soon as we get that early data together, which is more tangible, we can then look at the size of the prize and then clearly whether it would be commercial and worth entering that area and drilling those. to find out what was there. One thing I wanted to ask you about actually...
What we like to do is not necessarily say they can't drill a well, they can drill all wells. Our job is to make it happen. So what we do is we look at the well design, look at the time, how much it will cost, and look at the risks.
What we've got is this risk assessment table. It allows us to work with the geologist to perhaps change the well location, change the it's being done to minimize our impact. The drill bit will tell in the end from getting down there to actually see whether the dream of the geologist and the ideas that the engineer will have can come to fruition. The teams rehearse their presentations to the GELT. Years of work is about to be put to the test.
We're pretty excited about it and I think when the girls see it as well, they'll be actually quite excited. Hopefully beyond 10. I was going to make a quick phone call. It's easy to get excited about exploration, but this is a business. What we look for at Tallow is big oil.
Oil that's going to move the needle for our shareholders. What we do is we typically look at about 400 leads and prospects in the year, and we will pick from those 440 to drill in the next year. And if we could, the SL05 block.
Having concluded the technical analysis, we move on and do the commercial analysis. Taking into account factors such as oil price, gas price, cost of development, number of wells that you need. What's the tax rate?
We run different price scenarios, whether it's oil or gas, for example. Only when we have something which we like technically and commercially, do things then make it onto the drill list. We can do all the best geology and geophysics in the world, but if the project is going to make no money for us, then there's no point doing it.
New core areas in Kenya, Ethiopia. As the door shuts on one phase of exploration, it opens on another. With the drilling list agreed, it's now time to drill.
Drilling This is what it all boils down to. Two months ago there was absolutely nothing here. Now we've got a rig and we're drilling the well. This is where we find out if our interpretations were correct.
Did we get the stratigraphy right? Did we get the lithologies right? And more importantly, or most importantly, have we got oil? Probably we'll finish the wireline logging tomorrow. It's mixed feelings.
It's complete excitement that you're ready to jump up and down. And then it's a bit of anticipation. And you hope the well's going to go smoothly and we're not going to have washouts or poor hold conditions or get stuck pipe or any of the things that can go wrong.
So yeah, it's increased a bit, isn't it? I think for us the key risk is knowing where we're going to find pressure in the well. So what the geoscientists give us is a pressure profile or a pressure map, if you like. and we design our well according to the uncertainties around that pressure profile.
The total gas readings, they're not really rising too much. In the office we've got a team of people, they're looking at screens. It seems like it's increasing.
And basically we can monitor any well around the world at any time. What are you suggesting that we have to do? And obviously if we see the pressure starting to build up... Right, I'll give a call now, hold on....then we'll be in touch with the well engineers, we'll be advising them looks like there might be a bit of a pressure build up here we've got a bit of a gas increase here we're just monitoring maybe we need to increase the mud weight concerned about this or do something a little bit differently or maybe even stop drilling instead yeah well we'll probably look at increasing the mud weight Whether this well is going to find the prize, no one yet knows.
If it does, it will be the start of a new story. For the local population. For the host country.
And, of course, for Tallow Oil.