Exploration Risk, Confidence and Probability explained
In hydrocarbon exploration there are the things we know, things we know we don’t know and those things we don’t know we don’t know. This relates to the confidence one has in the understanding of the subsurface and can be based on data as well as models or analogues. This understanding can allow an exploration geologist to indicate whether or not imperative geological factors are in place that would allow a successful hydrocarbon accumulation to be present. For example, in area A one might be largely confident that all geological factors are in place (all geological chance factors are high) and this area would have low geological risk for finding oil. In area B one might be largely confident that one of the geological factors is not in place (one geological chance factor is low) making this an area of high geological risk for finding oil. However, in area C one might have absolutely no clue (confidence is zero) on weather a certain geological factor is in place, but this not necessary makes this area has higher geological risk than area B. In area C it will basically be a coin toss whether or not the imperative geological factor is in place, while in area B the certainty of it not being in place was already high. An appropriate approach for area C would probably be to acquire new data or re-assess old data and models to find clues on whether the needed geological factor is or isn’t in place. This is often referred to as “de-risking” but, to reduce confusion, could better be referred to as “increasing confidence” as the outcome of the study does not directly decrease the risk for finding oil. Possibly the new data indicates, with large confidence, that the imperative geological factor is not or only partially in place, and while this reduced the risk of making a wrong operational decision, it increases the geological risk for finding oil in the area. As this example indicates, probability factors, confidence and risk can be confusing concepts and clear definitions need to be communicated:Confidence scale
Confidence refers to the range of probabilities that some conditions may exist of occur. In exploration these conditions often relate to the imperative geological factors needed for a successful hydrocarbon accumulation. Confidence usually relies on the data quantity and quality, but can also be based on the confidence in theoretical models and analogues. The following confidence scale gives an indicates of the ‘meaning’ of certain values used in this study (primarily in expressing confidence in source rock presence). Probability scale
The probability scale ranges from 0 to 1.0 based on the probability of having a geological factor that positively impacts the chance of an oil accumulation to be in place. The value 0.5 indicates very low confidence and results in a “toss-up” between having and not having an imperative geologic factor in place. Note that the probability scale may be 0.1, while confidence on that factor is 0.95. One can thus be very confident an area has a high geological risk (red), but one can also be very uncertain about an area, causing it to have large exploration risk (orange). In the latter case more work needs to be done to turn that area either green or red. If the new data shows the area has high geological risk the area will turn red, but at least the certainty that the area has unfavorable prospectivity and exploration risk has decreased.