Eric Vosburgh

Apache Corporation did not have a strategy in place to find liquids-rich resource play opportunities with a low-entry cost and high-potential impact. It had historically been an acquisition and exploitation company and while the CEO wanted to build reserves through exploration, Apache was not organized or staffed to properly execute.

In collaboration with the Chief Geologist, selected the premier organizational model and then supplemented it with elements required to have an effective multidisciplinary team. Then, staffed the core team with personnel that fit the need from both within and outside the company. Next, defined a workflow to quickly find and characterize both organic and commercial opportunities full cycle, from screening and exploration through appraisal and final development. Additionally, created a new workflow that enabled the ability to promptly determine if the project had enough scale to be of interest. Finally, assigned the team to the various basins by strategic priority.

As a result, produced a petroleum systems assessment, including resource volumes, risk, and value, for all 18 basins. Exploration campaigns in six of the basins confirmed the presence of a working petroleum system with zero dry holes, and one of these successes was pursued with a development program.

Assigned to ConocoPhillips’ Clair Ridge project as a petrophysicist for the exploration team. During analysis, discovered an error in the water saturation modeling that impacted resource volumetrics. Upon correcting the error, determined the facility was undersized and would reduce the project’s Net Present Value (NPV).

First, performed a comprehensive evaluation of the available data that was then reviewed by ConocoPhillips’ expert staff. The changed evaluation was accepted by the exploration team, as well as company senior management in the U.K. and the U.S., and then shared at a partner meeting. Last, worked with the technical staff from all joint venture partners to assure them the revised analysis was correct and justified a facility redesign. The analysis was accepted, and the facilities were redesigned and built to accommodate the additional recoverable resources.

By expanding the recoverable oil volume by over 150 million barrels of oil, the project yielded $15 billion gross and $3.6 billion net profit for ConocoPhillips.

Apache Egypt was composed of an exploration organization and two joint venture partnerships with nine different teams that were working in an uncoordinated manner. The team’s goals, strategies, and workflows were not well aligned, resulting in inferior performance. When a single joint venture was created as part of a modernization effort for the joint venture partnerships and production licenses, a reorganization was needed.

First, proposed a subsurface director role under the general manager to oversee all geoscience and reservoir engineering managers and staff. Under the director, built two teams containing the geology, geophysics, and reservoir engineering personnel beneath a single manager. Shared services were also created and assigned to the exploration and development teams as required. Then, integrated staff into the single exploration and development teams (versus mirrored teams within each company). Last, created a mirror database as the workspace for all in-country and U.S. teams to work on the projects.

Today, there is a streamlined organization that effectively shares workflows and data under a well-defined leadership team and sets the strategy to reach the joint venture’s mutually agreed upon goals. Additionally, the new organization allows for a timelier reallocation of staff when there are changes to the strategy and capital allocations. Last, the staff reports feeling happier with the organization as it allows them to collaborate better and share their experiences.

In the past, the organization had made efforts to build and maintain a portfolio of all exploration and development projects and run analytics to select projects for execution. However, these efforts were unsuccessful. Therefore, took a proactive approach in creating an exploration portfolio to catalog all opportunities and enable the selection of the right projects for execution to meet corporate goals.

First, researched the latest methodologies in portfolio management and investigated what each of the individual asset teams was currently doing to maintain a portfolio of exploration opportunities. Then, determined what the organization needed to build and execute portfolio with geoscience, reservoir engineering, planning, and data technicians at the core. Next, staffed the team and together, determined the proper workflows and software tools to execute the strategy. Last, added all exploration opportunities from the asset teams in the North Sea, Egypt, and North America to the portfolio. The total capital budget for exploration was approximately $400 million.

Cataloging the organization’s exploration opportunities allows the ability to determine the Expected Monetary Value (EMV) of each project and the entire portfolio. It was an incredibly important initiative as it allowed the company to build future inventory through exploration and cease inefficient capital deployment.

Apache Corporation’s capital budget was historically focused on development, and exploration was handled on a case-by-case basis. This led to organizational strife as requests for capital were presented to the executive team, and it was a continuous uphill battle to receive funding for exploration projects.

Tackled this issue by first compiling a list of all exploration opportunities and the associated costs to pursue them. Then, created a project screening budget of $5 to $10 million per year that was part of the annual capital plan. Finally, established a stage gate process for exploration projects so they would be funded via means outside of the yearly capital budget.

Consequently, the new exploration project budgeting strategy reduced company stress while determining a viable process to ensure projects were adequately funded.

The company had a commitment to drill two exploration wells to fulfill the terms of the production sharing contract with Suriname. Therefore, tasked with producing a portfolio of viable drilling opportunities, planning the wells, and executing the drilling program safely and efficiently. However, there were issues that needed to be rectified, including team disorganization, a short timeframe for completion, and a lack of institutional knowledge of the operations.

Defined a strategy to accomplish the goals and restructured the organization with a clear chain of command. Next, staffed the team with the best talent available and defined and assigned a set of expected work products that fit the strategy. Then, reassessed the petroleum system and reprocessed the Block 58 seismic volume to allow for a high-quality assessment.

With the newly organized staff, aligned efforts to provide the desired work products within the designated timeline and exceeded the team’s strategic goals. Successfully delineated the seven play types present in the area and designed an exploration drilling campaign to test four play types and multiple targets within them concurrently. The four explorations led to the appraisal of those discoveries, delivering an estimated 6.5 million barrels of oil and a yet-to-be-defined natural gas volume. Ultimately, the company’s activities in Block 58 resulted in Wood Mackenzie’s E&P Explorer of the Year Award (2021) and Discovery of the Year Award (2019).