It is no secret that the effective use of hydraulic fracturing and horizontal drilling technology has led to a drastic change in oil and gas production in the U.S., but the technology that will lead to another step-change in oil recovery has yet to be fully developed, according to recent data from Wood Mackenzie.
Technology not yet available for commercial use could contribute up to 25% more oil than current forecasts suggest, according to a release from WoodMac. The firm predicts that volumes from EOR methods will come onstream in 2020 and could result in an additional 1.5 MMbbl/day to 3 MMbbl/day of oil by 2030.
“This is going to happen, like horizontal drilling and fracking, leading to another step-change in production technology,” Skip York, a principal analyst for WoodMac, said in the release.
EOR technologies are still in the early test phase in the Eagle Ford, Bakken and Permian, and could lead to a potential 100% increase in recovery rates, according to Woodmac.
“There are pilot tests that are underway with operators like EOG testing it out in the Eagle Ford,” according to the release.
WoodMac also addressed the debate over lifting the ban on crude exports, pointing out that it does not appear to take technological advances in EOR methods into account.
“If U.S. crude prices fall compared to international benchmarks, e.g., WTI-Brent, policymakers could lift the crude oil export ban to preserve current investment levels,” according to the release. “This would result in improving domestic tight oil wellhead margins by approximately $5 per barrel, the margin improvement would then attract additional investment, yielding another 0.35 to 0.45 million barrels per day. This environment will attract ever more capital, where every $5 billion invested could yield additional production of nearly 0.4 mbbl/d over 5 years.”
Should the export ban remain in place, however, “excessive production could drive down domestic crude oil prices by more than $30 per barrel vs. their international benchmarks,” according to WoodMac. “This discount has the effect of stranding barrels in the reservoirs leading to no net change in U.S. tight oil volumes and EOR in core areas might simply push out more expensive volumes from emerging plays.”
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