SPE Economics & Management
Volume 4, Number 3, July 2012, pp. 147-157

SPE-141104-PA

The Potential Pitfalls of Using North American Tight and Shale Gas Development Techniques in the North African and Middle Eastern Environments

View full textPDF ( 1,481 KB )

DOI  More information 10.2118/141104-PA http://dx.doi.org/10.2118/141104-PA

Citation

  • Martin, A.N. 2012. The Potential Pitfalls of Using North American Tight and Shale Gas Development Techniques in the North African and Middle Eastern Environments. SPE Econ & Mgmt  4 (3): 147-157. SPE-141104-PA. http://dx.doi.org/10.2118/141104-PA.

Summary

Many companies operating in the upstream gas industry in the Middle East and North Africa (MENA) are interested in the outstanding technical successes achieved by the US and Canadian tight and shale gas producers. It seems almost miraculous that companies can obtain significant gas-production rates from rocks with permeabilities measured in nanodarcies--so low, in fact, that permeability becomes almost impossible to assess accurately. In North America, the main factor now constraining shale gas production is the historically low gas price. Operators in MENA, who are accustomed to working in formations with permeabilities five or six orders of magnitude greater, have realized recently that they may be sitting on top of huge untapped gas reserves that had been evaluated previously as subeconomic.

In recent years, several major MENA-based operating companies have bought interests in US and Canadian tight and shale gas operations, with the objective of acquiring experience and technology that can be applied to similar formations in MENA and elsewhere. This seems to be an obvious and wise strategy; unfortunately, the problem is not the strategy, it is the tactics ("the devil is in the details"). In many instances, operating companies have been disappointed to discover that they cannot simply transplant an American-style development into MENA. Similarly, many North American independents have viewed the untapped low-permeability gas reserves of MENA as a natural territory for expansion, only to find themselves frustrated at almost every turn.

This paper seeks to highlight the potential pitfalls of trying to use North American development techniques in MENA, and to promote strategies and tactics that are more suitable. In addition, this paper will suggest structural changes that could have a significant positive impact on low-permeability gas developments in MENA.

© 2012. Society of Petroleum Engineers

View full textPDF ( 1,481 KB )

History

  • Original manuscript received: 11 June 2011
  • Meeting paper published: 7 March 2011
  • Revised manuscript received: 12 April 2012
  • Manuscript approved: 1 June 2012
  • Published online: 3 July 2012
  • Version of record: 13 July 2012