A Charred Life 
Oil and Water
Yes, they do mix in the Gulf of Mexico, where new technology has transformed a dead sea during the bust years into the site of a new oil boom.
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Medary showed me the prospect that the jack-up rig was exploring on a pair of computer screens in his office in Houston. He called up a cube of data he had created after studying the seismic survey for about six months. Running through the center of the cube were images of two faults in the earth, which might allow hydrocarbons to migrate upward. Where the two faults intersected, there was a horizontal feature like a flying carpet, colored blue, with yellow and red bursts of color on it. This was one of five pay zones that Medary hoped the Noble crew might find: The blue part represented sand, or a potential reservoir, and the red and the yellow patches represented “bright spots,” or places where the seismic data suggested that there might be hydrocarbons. To get to the target, the Noble crew was drilling a complicated sidetrack out from an existing well that not only became increasingly horizontal as it progressed but also turned to one side. “It’s a highly deviated well, and it’s deep,” said Medary. “There’s a risk we won’t get down there.”
Pennzoil, like many of its competitors, has been battling to stay in the black. To make a profit, the company’s management is counting on augmenting production in its Gulf of Mexico fields. By last November, Medary’s team had already drilled four consecutive successful wells in the Ship Shoal field. When Pennzoil acquired the property, the field was making a meager 100 barrels of oil a day, but the additional wells had boosted production to 3,700 barrels and 15 million cubic feet of gas. Several weeks later, when I called for an update, Medary reported that the jack-up had completed the sidetrack and tests showed the well was expected to flow about 670 barrels of oil a day. That wasn’t as much oil as he had hoped for—only two of the five sand traps he had identified had contained economically viable amounts of hydrocarbons—but the team had successfully drilled two more new wells, and as a result, Pennzoil expected to increase total production from the Ship Shoal field to 5,080 barrels of oil and 20 million cubic feet of gas a day. “Management is pretty pumped about that,” said Medary.
If that’s all Pennzoil were to find in Ship Shoal 154, it would be enough to make the acquisition worthwhile, but the team working on the field was particularly gleeful about having gotten the property from Chevron because of another possibility altogether. It is highly speculative, and they don’t know yet if they are right, but their interpretation of the field seemed to show glimmers of a sand structure that could hold oil where earlier interpretations had shown only salt. Medary and the others realized that the salt dome might not be a true dome—they decided it was shaped more like a duck’s head. “It’s overhung,” said Medary. “There’s a section underneath this that has never been tested. That’s pretty exciting: It could be as big as what has already been produced above. Maybe fifty million barrels. Half a billion dollars.” In other words, Chevron’s least-favorite property might turn out to contain a spectacular subsalt prospect. For the next year or so, a newly formed Pennzoil team that specializes in subsalt plays will evaluate the possibility. If its research confirms what Medary’s team suspects, then an exploratory well might be drilled in 1997. Medary, Sutley, and Logan will know if they were right in about a year and a half.
THE IDEA THAT OIL MIGHT BE FOUND underneath salt was first considered in the seventies, when it became clear to geologists that their understanding of the Gulf of Mexico’s history had been too static. They had failed to perceive that the order of things had been disturbed. Almost all oil is formed from marine animals, which are full of lipids, or fats; when the Gulf first formed as an inland sea, about 190 million years ago, the basin teemed with aquatic life, making it effectively a big pot full of the ingredients required by the recipe for oil. Oil was generated after biological material accumulated on the floor and was buried deep enough to be cooked to high temperatures caused by the pressure of layers of sediment overhead and also by heat from the furnace at the center of the earth. For the supply to be recovered later, however, it had to migrate upward into cooler regions and become trapped in porous pockets of sand. “The Mississippi River has been the most important river, geologically, that we know of,” said Jim Fox, the geologist at Phillips Petroleum in charge of subsalt exploration. “As ice ages came and went, glaciers covered North America and then melted, and everything that those glaciers ate up went into the Mississippi River. Where does the Mississippi River empty into? The Gulf of Mexico. That’s what holds all of the oil and gas in this basin—these very young sands that have been eroded off of North America during glacial episodes.”
If you bored through the floor of the Gulf today in a spot undisturbed by later events, you would find recently eroded sediment on top, then Cretaceous Period rocks from which the region’s oil is probably generated, and then a thick layer of earlier, Jurassic Period salt, from a time when the inland sea completely evaporated. Geologists used to assume that the layers had remained in that order, which would mean that by the time you hit salt, you were finished looking for oil. They knew, however, that the salt layer was elastic and had played a crucial role in the migration of oil. “Salt is less dense than sediment, so sometimes salt will start to rise up, and that creates the conduits to move fluids,” said Mahlon “Chuck” Kennicutt II, a geochemist at Texas A&M.
What geologists did not understand until recently was that salt had sometimes moved up over oil fields, trapping oil below. The first indication that this might have occurred came in the seventies, when academic researchers found young sands underneath older salt at a puzzling formation called the Sigsbee Escarpment, which is in the deep water of the Gulf. They eventually realized that the opportunity for the salt to move had been created when North America twisted apart from South America about 170 million years ago, making a gulf out of the inland sea. As the Mississippi then dumped large volumes of sediment in from one direction, there was room for the salt layer to move forward, from the shore toward the mouth of the Gulf. “It’s like a rolling-pin effect,” said Fox. “You’ve got all this dough sitting out there, which is the salt, and you have this rolling pin, which is the sediment that’s being dumped in. This rolling pin is just rolling the stuff out in front of it.”
Once geologists began to piece together the way in which salt had moved, oil companies started racing to drill below it. Gulf Oil was an early pioneer of the concept but abandoned its efforts after merging with Chevron; Exxon made the first big subsalt discovery at a site called Mickey but opted not to develop the field because Mickey is located in 4,352 feet of water, making it a difficult and prohibitively expensive project. Phillips Petroleum, which is based in Bartlesville, Oklahoma, began pursuing a subsalt play in the eighties, after shooting its first 3-D seismic survey of properties it owned off the coast of Louisiana. When Phillips geologists noticed that salt had moved forward over younger sands there too, they decided to hunt systematically for places where salt sheets might be obscuring huge reservoirs. A study of the distribution of oil and gas fields in the region offered a tantalizing possibility. “There ought to be oil and gas fields basinwide,” said Fox, “but instead there were windows in production—areas where there were no oil or gas fields. We said, ‘Wait a minute. We know salt has been laterally displaced to the north and south. What if this whole area is covered by big salt sheets?’”
That is what Phillips eventually found to be true. Mahogany—the first subsalt discovery of commercial significance—is located exactly where the regional survey showed the biggest gap in production. But in 1989, when Phillips decided to buy property at that location, the idea was still tremendously speculative. “Now everybody is talking about how subsalt is a great opportunity, but they are still risky wells,” said Tim Wallace, the manager of Phillips’ domestic offshore exploration efforts. “Historically, any wildcat effort is a one-in-five proposition, or one in ten. A lot of things have to go right to trap economical amounts of hydrocarbons.” The risk was further compounded by the fact that salt acts like a veil or a curtain, obscuring what lies below; because sound travels through salt twice as fast as through rock, the salt layer causes distortions in seismic images of anything underneath. “If you put a pencil in a glass of water, the image of the pencil under the water seems to bend,” said Kay Wyatt, a geophysicist at Phillips. “That’s refraction. That bending is exactly what happens to sound waves when they go from sediments into salt and then back out again. You get two very strongly distorting boundaries.”
Scientists knew it was possible to correct the distortion by a mathematical process called depth migration, but computers powerful enough to process the enormous amount of data involved didn’t exist at the time. Phillips decided to forge ahead anyway, on the hunch that its theory was right and the anticipation that technology would evolve to provide detailed seismic imagery. “At the time, we were able to say, here’s what depth migration ought to show,” said Fox. “Most management teams weren’t willing to invest lots of money in somebody’s pipe dream.” Phillips started buying acreage in 1989, just as others were leaving the Gulf. The company picked up fifteen leases for prices ranging from $380,000 to $520,000. Today the same properties would probably go for more than $10 million each; one lease in the area recently sold for $40 million. All fifteen purchases were named for different kinds of wood; one was named Mahogany.
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