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Oil and Gas Exploration Made Greener and Cheaper

Periodic Reporting for period 2 - Biodentify (Oil and Gas Exploration Made Greener and Cheaper)

Período documentado: 2019-10-01 hasta 2020-09-30

There is a high market demand by Oil and Gas (O&G) companies for disruptive innovations in the exploration of shale and offshore hydrocarbons. Two major factors drive such demand: first, the environmental concerns of institutions and citizens, especially in Europe; second, the fluctuating oil and gas prices globally. O&G exploration needs to be made greener and cheaper.

Our innovation, called Biodentify, targets exactly these needs. We can predict with high accuracy the productivity of an O&G field by only analyzing the DNA of one sample of shallow soil. This is absolutely disruptive, since even the most advanced exploration techniques commercially available nowadays can at most detect the probable presence of hydrocarbons, but not quantify it. Today, an O&G company suspecting the presence of hydrocarbons in an area must drill exploration wells in it. In the case of onshore shale hydrocarbons, this translates into thousands of wells (often low performing) that permanently devastate the environment (Figure 1). In the case of offshore, this translates into a huge logistics effort to drill wells on the seabed that may show no relevant presence of hydrocarbons; what is sure though is the marine ecosystem has been damaged during the drilling process. The European Commission has defined the one of 'raw material' as one of the societal challenges underpinning the whole Europe 2020 and the Horizon 2020 programme. While transitioning to renewable energy resources, it will still be needed to exploit fossil fuels for at least three decades, even according to the most optimistic forecasts. We want to make to make sure this happens with the minimal damage to the environment using DNA fingerprinting and AI to prevent drilling unsuccessful wells (Figure 2).

This Phase 2 project has one main goal: open up the markets of the North Sea (for offshore) and of USA and Argentina (for shale). Shale O&G exploration is practically banned in most of the EU, and this is why we have to resort to non-EU markets, which are though very profitable. In order to reach this goal, we need to perform three main activities within the Phase 2 project: i) achieving early market penetration for our innovation via free of charge pilots for new customers in these three areas; ii) improve our innovation and make our product ready for the market; iii) leveraging market acceptance by the conservative oil and gas industry and extend our customer base according to our commercialization plan.
There are three main activities within this project:
1. Three pilots with clients to prove and get acceptance of the technology: a) off-shore in the North Sea, b) shale in the USA, c) shale in Argentina
2. Improvement of the technology, mainly focused on Machine Learning algorithms and IT aspects
3. Business development and dissemination

Ad 1. For the pilots we have acquired the projects, partnering with four clients. In total more than 3500 samples were taken in this past year (more than double the size of the project plan): 1260 from North Sea locations (Figure 3), 540 in two areas in the USA (shale gas in Texas and shale oil in the North Dakota), 1620 in central Argentina. The North Sea samples are analysed and modeled of which the first results were presented at a micro-seepage conference in Houston in June 2019. This dataset and results still offer opporutinity to be improved, which will be part of our work for the coming year. The Argentina samples are in the process of DNA analysis. These, together with the USA samples, are expected to be analysed before the end of 2019. Modelling will take place in 2020.

Ad 2. More than ten different AI algorithms were tested on current data in the database for possible improvement on accuracy. At this moment the Elastic Net software for feature selection (to reduce the possible microbes that are indicators of oil and gas from >300.000 to < 3.000) and Support Vector Machine for classification (to determine the chance on oil and gas for this location and classify whether to drill or not) are found to be the most robust and reliable to use.

Ad 3. During the first year Biodentify has been quite active at conferences, social media, workshops, online and offline press releases. After getting the new hires on board the marketing and dissemination department worked on updating all general company presentations, improving the graphics on our website, working on showing ‘everyday life’ at Biodentify through its team, projects and events, as well as going deeper into the advanced technology. An overview of activities per category: nine Trade Shows and Workshops, five Press releases, and various Online/social media improvements (two landing pages for different propositions, announcements of Biodentify’s presentations and presence at workshops, conferences, conventions and exhibitions on LinkedIn, Google Analytics, Google trends, Hotjar, main keywords research, publishing of movies, infographics and more).
As a direct result of the Phase 2 project, our company will experiment a growth in terms of turnover (cumulated turnover of about €50M by the end of 2022) and employment (we will grow to include 39 FTEs in the same period, the largest majority of which will work at our headquarter in the Netherlands). The impact on the environment will be huge and global: thousands explorations will not be drilled every year thanks to Biodentify.

On a more general level, our innovation:
• brings costs down at least by at least a factor of 100, both for shale and offshore explorations thanks to a much higher accuracy vs. 'standard techniques'
• is respectful of the environment because Biodentify's surveys requires shallow samples of the soil, which are sufficient to extract its microbial DNA fingerprint

So, a shortest summary states that Biodentify makes Shale production and Off Shore Exploration Greener and Cheaper.

Shale Oil and Gas
Shale O&G has become extremely popular in the last two decades[1] but the state-of-the-art method (so-called 'grid drilling') for the exploration of shale resources is expensive and environmental-unfriendly. Drilling one well uses 10,000,000 litre of water, 100,000 litre of chemicals, 4,000 truck trips and is a permanent burden on the landscape. When a promising area is identified, thousands of wells are drilled in the ground, since there is no way to calculate a priori their yield. But not all prospective wells contain an equal amount of hydrocarbons: in the USA, for instance, the top third wells yield 2 to 3 times more than the bottom third wells.
Offshore Oil and Gas
Offshore O&G reserves have been exploited for decades but their exploration is very expensive: it implies hiring surveying ship and drilling down the seabed. The state-of-the art for these fields is 3D seismic surveys, which are conducted by creating a shock wave on the surface of the ground. Seismic surveys indicate where reservoirs may be, but they do not predict the presence of hydrocarbons. As a result, one third of the drilled exploration wells found with 3D seismic are dry; i.e. without enough hydrocarbons to be economically viable. And a single dry well is a shallow offshore field can cost to an O&G company up to €50 million. In the case of offshore O&G, we offer our technology as a complement to 3D seismic surveys in order to quantify the amount of hydrocarbons.
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