July 2016

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : JULY 2016

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CARIBBEAN Petroleum Update A Publication of the Caribbean Energy Information System (CEIS)

July 2016 ISSUE

GEO-PHYSICAL SEISMIC SURVEYS

Offshore and Onshore

Oil accounts for a large percentage of the world’s energy consumption; as such it is a vital commodity to many industries. Our lives are intricately dependent on oil and gas to fuel our cars, heat our homes and to produce items such as cosmetics and plastics to name a few. However, before we can have these things the source material must be found deep beneath the ground. That’s where seismic surveys play a critical role. Similar to an ultrasound machine that is used to scan a human body, the seismic survey is a technique used in the oil and gas industries to

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develop images of the rock layers below ground. This advanced exploration technique is the first step to unlocking the precious commodity needed to ensure global energy supply.

To identify the accumulation of hydrocarbons several techniques are available, among these are seismic surveys. Seismic exploration involves generating images below the surface of the earth and accurately capturing the Earth’s subsurface to ascertain the lo-

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Geo -Physical Onshore and Offshore Seismic Sur veys cation of potentially viable minerals and hydrocarbon resources. It is important to note that these surveys can also be used to help locate groundwater and check road and building foundations. Offshore surveying is highly regulated and can only be carried out in government regulated areas. As a consequence, before any surveying take place, companies have to ensure safety precautions to protect marine life. During operations visual and acoustics monitors are utilized to detect any marine life which may be present.

reserves as well as to indicate the best areas for drilling to take place. This will thereby eliminate unnecessary drilling and dry wells. Seismic processing requires powerful computers and sophisticated software to process seismic data. It also important to note that while marine operations uses a specialized vessel with hydrophones attached to capture returning sound waves, Onshore seismic operations usually use what is referred to as “geophones� to capture data beneath the ground.

However, it is easier to capture seismic measurements offshore than on land as the ship moves more freely in This advanced technique uses compressed air released all directions on water. into the water to create sound waves that penetrate deep into the sub-surface rock in the ocean. The process be- Another type of seismic exploration takes place on land. gins with a soft sound wave and gradually increases to These seismic operations are similar to marine operaoptimal levels. Considering that marine life could be tions in that the energy sources are acoustic energy genpresent in the area being surveyed the technique uses erated using vibrators mounted on trucks. In this case soft sounds first to act as a deterrent to animals. The the receivers are typically geophones, which are like survey is conducted by a ship towing a compressed air small microphones pushed into the soil to measure the gun which fires sound waves at intervals which then re- ground motion. Onshore seismic are used in sensitive cords the length of time it takes for the sound to bounce locations without damaging buildings or the environback from the layers of rock under the seabed. From ment. the data that is capture, two or three dimensional maps are produced. These provide information that is needed Land seismic data acquisition uses primarily two types to develop production plans in order to tap oil and gas of seismic sources vibroseis vehicles or a low-impact ex-

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plosive charge hat generate acoustic waves which propagate deep into the earth. Each time an acoustic wave encounters a change in the rock formation, part of the wave is reflected back to the surface where an array of sensors records the returning signals.

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expensive and requires the seismic lines to be set on a narrower grid pattern.

The third type of seismic survey is the 4-D method. It is basically an enhanced 3-D program that collects data that is more sensitive to the timing of the results colOnce the seismic has been processed, it must be inter- lected. The data interpretation can therefore be even preted by geophysicists. The results will be compared more precise than 3-D, especially with regard to the with other data (such as rock samples, regional well/ size, thickness and shape of the potential hydrocarbon drilling results and known geology) to enhance the ac- formation curacy of the interpretation. Properly processed and analyzed, seismic data is not only relevant in identifi- Modern seismic imaging reduces risk by increasing the cation of potential oil and gas resources, but is also an likelihood that exploratory wells will successfully tap important data source for planning exploration and de- hydrocarbons and decreasing the number of wells that velopment of complex geological structures containing need to be drilled in a given area. Seismic surveys also reduce associated safety and environment risks and the unconventional oil and gas resources. overall footprint of exploration. Because survey activiThere are three types of seismic surveys; 2D, 3D and ties are temporary and transitory, they are the least in4-D. Geophysicists interpret the results of the surveys trusive and most cost-effective means to understandto see if there is enough oil or gas present in the area ing where recoverable oil and gas resources likely exist. of interest to justify drilling an exploratory well. The traditional type of seismic method is two dimension- Whether on land or marine, seismic and other geoal, whereby data is collected and presented in two-di- physical surveys provide critical information for the mensional maps. This however does not provide for a benefit of society and quality of life. Today, advancegood indication of depth or thickness of the potential ments in geophysical technology have helped find, drill producing formation. Secondly, the three dimensional and produce oil and natural gas with the least risk and method is a newer type of program the data interpreta- the least possible impact to the earth. As operators extion allows the results to be presented in three dimen- plore for oil and gas, the use of geophysical technolosions. This program provides a sense of the thickness gies helps to reduce risk in regards to cost, safety and and shape of the potential producing zone. This tech- damage to the environment. Geophysical information nology allowed many operators to go back into fields is used to accurately plan locations for wells, reducing that were thought to be “drilled out� and find many the probability of drilling dry wells and consequently smaller pools. Unlike the 2-D program, this is more the need for further drilling, minimizing the environmental impact of the oil and gas exploration.

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PETROLEUM NEWS & HAPPENINGS Oil Price Falls On Crude Inventory Data [...]...Read more Gas Prices Down $0.59, Diesel Up $0.87 [...]...Read more LNG Can Be Sourced From Anywhere – ESET [...]...Read more

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : JULY 2016

Prices at the Pump JULY 2016

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Retail prices for Regular Unleaded Gasoline in the twelve Caribbean countries reviewed at the end of July 2016 showed increases in prices for Barbados, Cayman Islands, Dominica and Grenada between 0.6% and 3.9%. The highest price increase was recorded in Barbados of 3.9% while prices were stable in the remaining six countries.

The average retail price at the end of July 2016 was 0.6% higher when compared to the period ending June 2016.

Unleaded Gasoline: Regular : Average Retail Price – January - July (US$/Litre) 2016 COUNTRIES ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] CAYMAN ISLANDS DOMINICA GRENADA (95 OCT) GUYANA JAMAICA 87 Octane[E10] MONTSERRAT ST. LUCIA ST. VINCENT/GRENADINES TRINIDAD/ TOBAGO [92 OCT] AVERAGE RETAIL PRICES

1.60

JAN 1.11 1.01 1.36 1.07 1.08 0.80 1.06 0.95 0.91 0.87 0.86 0.87 0.42 0.96

FEB 1.03 0.95 1.35 1.03 1.08 0.78 1.04 0.85 0.86 0.76 0.80 0.78 0.42 0.91

MAR 1.03 0.97 1.32 1.09 1.03 0.74 1.01 0.85 0.88 0.76 0.78 0.78 0.42 0.91

MAY 1.03 1.05 1.36 1.23 1.06 0.76 1.10 0.88 0.98 0.92 0.82 0.78 0.42 0.97

JUN 1.03 1.09 1.42 1.23 1.12 0.84 1.13 0.90 1.03 0.92 0.92 0.78 0.42 1.00

JUL 1.03 1.09 1.47 1.25 1.13 0.87 1.14 0.90 0.97 0.92 0.92 0.78 0.42 1.01

7 Mths 1.04 1.01 1.38 1.15 1.08 0.79 1.08 0.88 0.93 0.87 0.84 0.79 0.42 0.96

Comparative Retail Pump Prices Regular Unleaded Gasoline July 2016 vs. 7 Mths Avg (Jan-July 2016)

1.40

JUL

1.20

US$/Litre

APR 1.03 0.94 1.39 1.16 1.03 0.76 1.05 0.85 0.91 0.92 0.82 0.78 0.42 0.94

7 Mths AVG

1.00

NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.

0.80 0.60 0.40 0.20 0.00

12 Caribbean Countries

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International OIL PRICES

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52.00

Average Weekly and Monthly Crude Oil Prices May - July 2016 48.71

US$/Bbl

50.00 48.00

48.17

46.00 44.00 42.00

44.44 44.22

40.00 Period WK1

WK2 May-16

WK3 Jun-16

WK4

MTH AVG

Jul-16

Average Monthly Crude Oil Prices 2013-2015 120.00

106.61

105.78

100.00 US$/Bbl

Analysis of International Crude Oil Prices from May to July 2016 period showed an average price of US$46.10/bbl . This average price was 5.8% lower than the price seen in June 2016 and 1.1% lower than the average price in May 2016. The highest weekly price seen in July 2016 for the commodity was US$44.44/ bbl-reflected in week four while week one accounted for the lowest price of US$48.17/ bbl. Overall, the lowest price recorded for the period was US$44.22 recorded in week one of May 2016. The average price reported in July 2016 was 13% lower than the average price recorded in July of the previous year.

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80.00 60.00

59.91

40.00 20.00

2013

2014

2015

0.00

Period

FEATURED OFFERS: P E TS TATS - t h e Ca r i b b e a n E n e rg y I n fo r m at i o n System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.

Scientific Research Council,

Hope Gardens, Kingston 6, Jamaica 1-876927-1779 (Telephone) 1-876-977-1840 (Fax)

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