New-Frontier Reservoirs I
With the current changes in the industry, are we seeing the demise of unconventional reservoir development? Let us review several recent industry indicators.
Numerous 2016 published outlooks still forecast unconventional production to increase from 10% in 2016 to greater than 25% by 2035 from sustained growth in North America and China. By 2040, it is also expected that unconventional supplies will account for nearly 90% of North American gas production. This increase in unconventional-gas demand is expected to be driven by a fundamental global requirement for energy in the medium term that is affordable, abundant, clean, and available.
Are these forecasts still realistic in the shorter term, when we are faced with a low oil price? I would argue that they are still realistic because, although the industry is contracting, it is quite clear that companies are rapidly adapting to the oil-price drop. Apache, for example, is quoting that unconventional-well costs have reduced by 45% below their 2014 average, with 50% of these savings as a result of new technologies. Shell is highlighting similar well-cost reductions of 30% year on year. The cost savings arise from many areas. These include new drill-bit technology; replacing diesel with cleaner and less-expensive natural gas for rig fuel; pad drilling; fracture-stimulation optimization, including fewer and smaller fracture stimulations; alternative proppant; and recycling more completion fluid. In other regions of the world, where unconventionals are more immature, such as Argentina, Saudi Arabia, and China, appraisal and exploration also continue for the most-attractive unconventional plays.
So, are we seeing the demise of unconventional developments? No, clearly not. The key frontiers or challenges for the unconventional industry to grow are technological, geographical, commercial, and geological. This feature highlights some of these key frontiers being explored around the world to ensure that the unconventional industry does not just survive but thrives.
This Month's Technical Papers
Recommended Additional Reading
SPE 174754 Proving the Concept of Unconventional Gas Reservoirs in Saudi Arabia Through Multistage-Fractured Horizontal Wells by Ali Al-Momin, Saudi Aramco, et al.
OTC 25739 Offshore Methane Hydrates in the Gulf of Mexico: A Study in Economic Viability by Jaeger Wells, Kiewit Energy Group, et al.
SPE 176260 Unconventional Resources: The Next Generation—Assessing Coal to Liquids, Oil Shale, Underground Coal Gasification, Microbial Coal Conversion, and Other Technologies With the SPE-PRMS by Douglas Peacock, Gaffney, Cline, and Associates, et al.
New-Frontier Reservoirs I
Simon Chipperfield, SPE, Chief Production Engineer, Santos
01 July 2016
Chesapeake Teams with Analytics, ML Firm to Improve Asset Performance
The Oklahoma City independent has a new-look portfolio and new operational and financial priorities. And now it has enlisted an energy research firm to leverage advanced analytics and machine learning to help get the most out of its assets.
EIA Adds New Plays to Shale Gas, Tight Oil Reports
The agency updated its methodology and production volume estimates to factor increasing production from new, emerging plays as well as older plays that have rebounded thanks to drilling advancements.
The Eagle Ford Still Looks Good to Operators
The Eagle Ford Shale has reclaimed its standing as one of the most attractive US onshore liquids basins, and for good reason. Does this mean more operators will seek to buy in to the play, and could further consolidation take hold following last year’s big deals?
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