HOUSTON—New technology, along with improved techniques, is behind the rise in oil and gas production from U.S. shale plays, but the first half of this year will likely be on what technology has not done.
That’s according to Ahmed Hashmi, global head of upstream technology for BP Plc (NYSE: BP).
Answering a question on where technology is headed during a session April 22 at IHS Energy CERAWeek, Hashmi said technology for rapid appraisal and quickly identifying sweet spots will be among the waves of technology to come.
About 5,000 wells were drilled in the Barnett Shale before the optimum development plan for the play was figured out, Hashmi said. “We can’t afford to do that when we go overseas. We have to learn much more quickly,” he said. BP is applying its technology expertise at international unconventional plays, including in Oman where it is developing a large tight gas accumulation. “Technologies that enable rapid appraisal of the resource are key and difficult to some degree because it will take different forms of data.”
Lower oil prices have prompted companies to ramp up the search for technologies aimed at improving efficiency, growing production and adding profits. Companies are utilizing pad drilling, adding frack stages, extending laterals and using enhanced completions, all of which have contributed to production growth.
“Where we have had a lot of technology improvement is on the efficiency side,” Hashmi said, noting this includes sliding sleeves and rapid completions—things that really improve cycle time and operations. “That’s been the focus in the U.S.”
Advances in completion optimization will continue to have a major impact on oil and gas production, Hashmi added. Today, different approaches are being used by companies, but “there comes a point when you are basically going beyond the marginal value,” he said after mentioning the rise of idled rigs. “How do how to you optimize investment relative to deliverability?” The answer is where technology could evolve in the future.
Plummeting oil prices, which are rebounding after falling below $50/bbl from highs of more than $100/bbl last summer, have spurred in increase in idled rigs. The U.S. rig count was down by 34 to 954, according to the last count reported by Baker Hughes on April 17. This number was down 877 from the same time last year.
Current market conditions also have led to a backlog of uncompleted wells, as companies delay pumping more oil at a time when prices are low and demand is lax. Bloomberg reported April 23 that U.S. drillers had not turned on the taps at 4,731 wells they have drilled, leaving 322,000 bbl/d in the ground.
However, technology remains a focus as others across the globe with shale resources learn from the U.S., applying lessons when geology and above-ground conditions allow.
“But one size doesn’t fit all,” Hashmi warned.
A copy-and-paste of the North America’s approach, however, may not work.
“Some aspects may be reasonable to copy and paste, but many others may not,” said Ibraheem Assa’adan, executive director of exploration for Saudi Aramco, during a session about unconventional gas in the Middle East.
Geological and geomechanical stresses, resource ownership, available data, infrastructure and availability of support and services are among the areas in which Saudi Arabia and North America differ. But copy and paste opportunities exist when it comes to modular processing facilities, fit-for-purpose rigs and water management, Assa’adan said.
In the Saudi Arabia’s Jafurah Basin, a shale gas/condensate play that is similar in size to the Eagle Ford, Saudi Aramco is pushing forward with derisking source rock through nanoscale characterization and microseismic. Focus is also on water management, especially for stimulation work. Projects involving use of treated seawater, treated wastewater, reused flowback water, brackish water and even waterless fracks are underway.
The U.S. Energy Information Administration estimates there are about 345 Bbbl of technically recoverable shale oil and 7,299 Tcf of technically recoverable shale gas in formations in more than 40 countries.
Contact the author, Velda Addison, at vaddison@hartenergy.com.
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