OT26009 | Capital Allowances: Research and Development Allowances: 1967 Memorandum - Successive Stages of Work - Stages 1 & 2

The successive stages of the work involved in Oil Exploration and Development as referred to in Paragraph 2 of the Joint Statement are as follows.

Stage 1

1. Study of all available literature on the geology of the region in question.

2. Concession acquisition (in the case of marine areas this step is often delayed until after (3) below.

3. Reconnaissance geological and/or geophysical surveys over the region in order to select the most attractive areas. Geophysical surveys may be aeromagnetic, gravity or seismic surveys.

4. Detailed geological and/or geophysical surveys over the most attractive (concession) areas in order to select the best locations for drilling. Geophysical surveys may be gravity and/or seismic, most usually the latter.

5. In certain marine areas sea-bed sampling might be undertaken to increase geological knowledge. On land in some cases shallow holes may be drilled for the same purpose.

Stage 2

1. Drilling of exploration wells. In certain cases in marine operations sea-bed bearing capacity investigations may be required prior to commencement of drilling. During the drilling of an exploration well the obtaining of maximum information of the geological section penetrated by:

• Taking samples of cuttings at regular intervals.

• Cutting solid cores at selected depths (either full hole or side wall).

• Running electrical and other surveys in the hole.

• Testing prospective intervals.

1. Either:

• If no oil shows are found or shows do not imply commercial quantities, abandonment of the exploration hole, or

• If the oil shows are sufficiently promising, the exploration well might be either:

Abandoned immediately or after prolonging testing - if production from such an isolated well is considered inadvisable, or

Completed as a test well and/or potential producing well.