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Domestic and International Borders, Technology and the Search for Energy

For complex oil and gas projects, before any technical operations can begin, there are most often a web of administrative issues that need to be dealt with.  At the base of all of this is first understanding and comprehending the political schematic of where the resources are thought to be hidden.  The importance of planning and assessing this part of project risks cannot be understated.  The complexity, challenges, and capital investment required for seismic and other geophysical exploration and subsequent drilling operations can be substantial.  This multiplies the importance and significance of project planning and risk assessment even more.  It is becoming more and more common that the demarcation of where exploration can commence is in flux.  Energy resources do not accumulate and move according to the current, and often volatile, domestic and international boundaries.  The contours, dips, and structures of geologic formations were settled long before the manifestations of states were created on the land surface and out to the sea.  Technology now permits the better definition of sovereign international borders as well as allowing resource exploration and exploitation to expand beyond traditional limits.  Backed by high technology, in many areas around the globe sovereign borders and resource ownership are being contested.  As technology allows us to push the envelope into frontier areas, political issues increase, raising the question, whose oil is it?

Most are visibly aware of the surface boundaries around them.  Such boundaries are defined by white picket or chained-link fences.  These firm boundaries define sovereign ownership and control.  However, real property is also composed of the subsurface rights below the surface as well as the free air above the surface boundaries.  Surface water can enter and move within the boundaries. There are different rights with regard to bodies of water such as rivers, lakes and sea shore lines.  Often, individuals, businesses, and states own different extents of these rights.  Most residential property lines can be thought of as setting on a flat earth defining boundaries as straight up and straight down from the surface boundary.  But, since the earth shape is spheroidal, the flat earth model is not sophisticated or geodetically precise enough to define long lateral or undulating boundaries on a curved surface.  International borders are often defined by geographic demarcations such as rivers and shorelines.  But, rivers and shorelines move over time.  Straight down takes one through the center of the earth and to a geographic point on the other side.  Straight-up has often been in reference to a constellation whose stable orientation has been used by astronomers, navigators, and geodesists through the ages to point them on course and relate their position on the surface.  Topographic heights and hydrographic depths are referenced from a smooth defined sea level surface spheroid because actual real time sea level fluctuates.  On a spheroid, surface boundaries converge to the earth center narrowing the boundaries in depth like a cone.

Surface mapping often is accomplished through line of sight measurements referencing a benchmarked land or celestial position. How the position was determined is important.  The minimum distance accuracy for a U.S. First Order bench mark is one part in 100,000, or within a centimeter for a kilometer measurement.  Positioning at sea in the past relied on celestial reference calibrated with time because the earth rotates around the sun and its axis as ships move.  In the wide open seas, ship location was determined through the U.S. Loran hyperbolic radio signal navigation systems.  Loran system position accuracy was within tens of miles.  The Loran system was phased out in the early 1980’s.  The Global Positioning System (GPS) that is in common use today by explorers and commuters is a modern day phenomena.  It began as a US Department of Defense (DoD) initiative in 1973.  It was opened to civilian use in 1983.  GPS processed positioning information in two codes: one for military use and one for civilian commercial use.  It eventually grew to become its fully designed network of 24 satellites in 1995.

The DoD could control the timing and accuracy of the civilian commercial signal.  The selective capability was turned off in 2000.  Today, GPS position accuracy is nominally within 15 meters, however it can be enhanced through integrating ground based positioning.  Differential GPS systems, where satellite measurements are calibrated with land based measurements, are often used offshore and are accurate within 10 meters.  GPS positioning references the WGS-84 spheroid or datum.  Latitude and longitude corresponds to a specific reference spheroid.  Many countries used their own reference spheroids and corresponding grids – flat earth – systems to determine internal reference positions and their sovereign borders.  A localized reference datum can give more accurate representation than using a global system.  The difference between coordinates derived from one datum to another is called datum shift.  This can be anything from zero to hundreds of meters.  There have been many technologies developed during the past twenty-five years since GPS.  However, having the confidence of knowing position within tens of meters, rather than kilometers (miles), is significant in exploration.

Economic prosperity derived from subsurface mineral, oil, and gas exploration and extraction is inextricably linked to domestic property rights and international sovereign borders.  Disputes between concession lease holders domestically or in neighboring countries are coming to head as technology is enabling once inaccessible resources exploitable.  For most countries, energy sovereignty is a security issue.  Indeed, the expansive U.S. domestic shale oil boom has had wide support because it freed the U.S. from dependence of imported oil.  Domestic land use and property disputes often favored oil producers in this climate.  But, international disputes are another matter.  As technology has made offshore energy resources accessible, countries have also extended their sovereign borders offshore.  International law established in 1982 by the United Nations Convention on the Law of the Sea states that countries control the waters 12 miles from its coastline.  Countries also have special rights to exploit their “continental shelf”.  This extends to the natural continuation of the sovereign borders to the continental margin’s outer edge, or 200 nautical miles (230 miles) from the defined shoreline, whichever is greater, up to a limit of 350 nautical miles (400 miles).  Offshore, where the territorial waters of countries overlap, it is up to the states in question to delineate their offshore borders.  But, how the land borders extend offshore are also at issue.

Mapping the subsurface is different, of course.  In seismic surveys, the point being illuminated in very simple terms is based on the midpoint between the seismic energy source and the receiver.  In marine ocean bottom seismic, marine node, and land seismic, the source moves from shot point to shot point while the array of receivers remain stationary.  In seismic streamer surveys, the seismic source moves along with the array for each shot point.  For each shot there is a different source and receiver combination.  However, the midpoints should concentrate in the same general area, which are called bins.  The number of shot-receiver combinations within a bin area is called fold.  Increased fold – more receivers – enhances the quality of the imaged subsurface.  The distance from source to receiver is the offset.  The angle from source to receiver also provides a different azimuthal measurement.  To image and map the subsurface well, there is an incentive to have a variety of offset and azimuth measurements.  The illumination point of the subsurface is not only dependent on the distance between source and receiver, but also on the subsurface structure, contours, and dipping geology under the sea surface.  Also, marine seismic surveys weather and currents can shift the relative positions of source and receiver which affects the concentration of source receiver combinations in each bin.  Without getting too far into seismic exploration geophysics, what needs to be understood is that the exploration equipment – source and receivers – need to be located on both sides of any border to map a point and structure below the surface point of that border.  Even if an image of the subsurface can be developed up to the border, this would at best provide limited information to optimally extract the oil and gas.

Successful exploration and exploitation of subsurface resources in most ways is impeded, or made more complicated, by surface borders, whether they are defined by a county line, offshore block concession coordinates or sovereign country borders.  Borders are assigned for ownership and control within determined boundaries.  Oil, gas and water are fluids.  In the subsurface, these fluids are trapped and accumulate according to the physical properties of the geology and structure.  Determining the open space that fluids can occupy and how easily fluids can move within the open spaces is of great interest to explorers.  And of course, which type of fluid and where it is within the open spaces is key.  The fluids do not respect the international borders, they flow according to the principles of physics.  We can see how this works every time that we have a drink with ice in it.  How much drink we have and how easily it can be extracted – drank – has much to do with the size and shape of the ice.  To add a little political flare into the analogy, provide a single drink to more than one drinker and ask them to share the drink.  Point the straws in opposite directions and draw a line on the lid of the cup if you want.  You cannot really tell who the most ambitious drinker is until one accuses the other of not sharing fairly.  And you still may not really know without an even more sophisticated and complicated measurement process.  In any case, the liquid diminishes in a downward fashion, not according to which side the straw is pointed.  So, wells drilled close, but within, geographic borders are very likely extracting oil beyond the defined property lines.  There is a reason why drinks are sold in different sized cups and not different sized straws.  It is easier to have separate cups than to manage the sharing of a single large cup, even if it is more cost effective to do so.  It’s all about sovereignty and ownership.

Whether speaking of neighbors in West Texas or sovereign countries around the world, disputes are cropping-up around the globe.  There are model agreements, such as those in the North Sea which exist between UK and Norway.  However, oil exploration and exploitation has a history of being contentious.  The first Gulf War in 1990, when Iraq invaded Kuwait, was triggered by such a dispute.  Iraq refused to negotiate a production agreement over the Rumaila field which led Kuwait to adopt a policy and produce more oil than it was allowed to under the OPEC guided quota system.  It was also rumored that Kuwait used additional advanced horizontal drilling technology.  There was never a definitive study to confirm or deny this.  However, it was claimed that horizontal drilling was not beneficial because oil flowed easily enough from vertical wells.  Horizontal drilling technology achieved commercial viability during the late 1980’s.  Because of the fact that the horizontal extent of a reservoir is much greater than its vertical extent (reservoir thickness) in most cases, horizontal drilling exposes significantly more oil or gas yielding reservoir rock while making it easier to avoid water or non-productive rock.  Horizontal drilling techniques combined with hydraulic fracturing techniques are especially beneficial in thin-bedded shale rock.  The improvements of both these technologies were at the center of the U.S. shale boom.  Many other countries are now looking for their own path to improved domestic energy production for their own security following the U.S. model.  These technologies have now found their way offshore.  Oil services companies such as Schlumberger boasts of their record setting directional drilling projects, the longest being 37,956 feet.  That’s over seven miles.  One does not have to extrapolate too much to understand the political ramifications of being able to extend the reach of a well seven miles from the vertical drill entry point.  Just knowing that the technology exists is enough to raise alarm, just as it was when the technology was in its infancy.

Countries are realistically concerned about their energy and border security now more than ever.  Once inaccessible, energy resources are now within reach using the latest technologies reviving old tensions and peaking renewed interests in defining sovereign borders.  Offshore exploration is especially high risk.  In addition to the technical challenges, there is the added risk that the offshore concession blocks may fall in a disputed area.  The United Nations Convention on the Law of the Sea as well as joint development and sharing agreements require nations to honor these agreements.  There are multiple layers to resource planning and management dependent on governments of sovereign countries being stable and accepting of external solutions.  Countries will need to accept global definition of their sovereign borders that may transgress internal political, historical and cultural definitions.  The ephemeral political borders do not conform to the extent and form of the subsurface geologic structures that contain oil and gas resources.  The definition of property rights imply a solid flat earth model with ownership extending upward into the air and downward according to the defined surface dimensions.  But, oil and gas resources are fluid and move within contoured structures not compliant to surface dimensions and volumes.  Sovereignty and security will define how oil and gas resources are explored and extracted in the future.  Managing the technology will become in many cases easier than managing the political ramifications of using the best new technology.  Because the question is not just where is the oil?  The question more is more is becoming whose oil is it?