Academia and Independent E&P Companies: A Win-Win Partnership

Independents play an important role in the oil and gas industry. They specialize in unconventional field development and are largely credited with the shale gas boom that has occurred in the US. Despite this success, they differ from the large, integrated majors in that they usually have limited or no research and development (R&D) capability. In order to remain competitive, independents commonly rely on academia to meet this need.

This article presents three important R&D realms that demonstrate good collaborative efforts between independents and academic research institutions.

Pilot EOR Operations

One key area for independents in North America is mature field development whose aim is to extract the proven residual oil trapped in these reservoirs. Independents acquire mature assets primarily from major exploration and production (E&P) companies once the majors start viewing them as marginal or economically unattractive. Independents tend to view mature fields as attractive because, as smaller companies, they typically have more efficient operating structures with lower overhead, and are more willing to deploy advanced and emerging technologies. Several mature onshore fields, such as Yates in Texas and Salem in Illinois, are good examples of these acquisitions.

Independents are actively working on the implementation of improved or enhanced oil recovery (IOR or EOR) pilots in mature oil fields to rejuvenate them. Chemical and miscible gas injection processes are the most widely preferred EOR technologies for recovery of light to medium viscosity oils. Chemical EOR processes include injection of alkaline/surfactant/polymer (ASP), surfactant/polymer, and polymer, as well as CO2, which is the most common and preferred injectant for gas injection EOR processes due to its capability to develop miscibility with difficult oils, and the added environmental benefit of possible CO2 sequestration.

Both EOR processes work on similar principles. They minimize capillary pressure and result in incremental oil recovery through modifications in interfacial forces. A common trend is for independents to collaborate with universities and oil and gas service providers known for technical excellence in the laboratory work, pilot design, and implementation of these advanced EOR processes.

The Research Partnership to Secure Energy for America (RPSEA) has started a “small producer program” that awards several proposals annually to qualified “consortia consisting of small producers or organized primarily for the benefit of small producers” whose “primary focus … will be technology development in mature oil and gas fields with the objective of extending the life and ultimate recovery of these fields.”1 One recent project, awarded in 2007, is a collaborative effort between the University of Kansas and Carmen Schmitt, a Kansas independent producer. The project goal was to evaluate the feasibility of near-miscible CO2 injection to improve oil recovery for a possible future field demonstration pilot in Carmen Schmitt’s producing field in the Arbuckle formation.

Another project, awarded in 2008, involves the Texas independent Layline Petroleum and project partners Tiorco and The University of Texas at Austin (UT). This project calls for field demonstration of the applicability of an ASP flood in a mature oil field in Brookshire Dome, Texas. More project information and results can be found on RPSEA’s website.2

The Center for Petroleum and Geosystems Engineering at UT has one of the most popular chemical EOR industrial affiliates programs3 in the US with active participation from the oil industry. There are more than 30 participants in the program and these include oil majors, national oil companies (NOCs), mini-majors, and some independent oil and gas producers.

Kansas University’s Tertiary Oil Recovery Project4 is working on technologies such as miscible or near-miscible gas injection to improve oil recovery from mature oil fields owned by independents in Kansas.

Field Development Operations Optimization

Mature fields pose a number of challenges not faced in the initial stages of field production. The management and revitalization of mature fields demand fast and optimized drilling, cost-effective workover operations, efficient water treatment and environmentally conformed disposal, and artificial lift optimization and management, to name a few. There are several examples of partnerships between industry and academia that help independents to optimize mature field development.

In 2000, an agreement between the US Department of Energy (DOE) and The Pennsylvania State University established the “Stripper Well Consortium,”5 aimed at the development of technologies to improve productivity of oil and gas stripper wells in the US. The consortium is composed of small petroleum producers and universities, among others, and tailors research projects to industry demands in the areas of well stimulation, pumping, water management, and so forth.

Typically, high recovery factors imply increased water production rates. Hence the operation of mature fields requires effective separation, treatment, and disposal of produced water as well as addressing problems such as inorganic scale deposition. Rice University manages the Brine Chemistry Consortium,6 which includes independents such as Marathon, Occidental, and Southwestern Energy, among other industry partners classified as NOCs, majors, and service companies. The consortium’s central idea resides in research and technology transfer on issues related to brine production.

Field revitalization necessitates the drilling of new wells, both infill and developmental, in order to access remaining hydrocarbon volumes. Therefore, strategies to optimize cost and time for well construction are critical. This is the focus of the Drilling Research Projects,7 maintained by the University of Tulsa. This program is conducted as a cooperation between industry and academe and has the objective of cost reduction through technological improvement of well drilling operations. It addresses key research areas such as drilling fluids, cuttings transport, and wellbore stability.

Another issue of major importance is the improvement of the well/reservoir interface. As long as the wellbore is effectively exposed to the formation, high productivity is to be expected. Well stimulation techniques are applied both to improve productivity and to overcome well impairment mainly as a result of formation damage and scale formation. Therefore, well stimulation has been considered a rich theme for research and technology advancement. In this context, the Colorado School of Mines manages the FAST (Fracturing, Acidizing, Stimulation Technology) Consortium,8 whose purpose is to conduct practical research on stimulation.

Pioneering Shale Gas Development

Finally, coming to what may be the hottest issue in the oil and gas industry today, independent oil and gas firms are undoubtedly leading the way when it comes to gas production from shale. Chesapeake, EOG Resources, Devon, and Southwestern Energy are among the leading producers of natural gas from shale. The innovation in shale gas production itself started with an independent oil and gas company called Mitchell Energy. The company (later bought by Devon Energy in 2001) ventured into the Barnett shale in Texas and pioneered new technologies in horizontal drilling and hydraulic rock fracturing to make the production of gas from shale economically feasible. Because this is a relatively new area for the petroleum industry, there is obvious uncertainty in the best practices of exploration, drilling, well completions, and reservoir management that representatives of independents often talk about at SPE conferences, lectures, and meetings.

Unconventional shale plays have unique pore size distributions, and gas storage and gas flow mechanisms, all of which represent current unsolved puzzles. Experiments involving the geomechanics of shale rock, anisotropy, organic matter characterization, thermal maturity, adsorption-desorption, and kerogen content are the major areas of research and study. A considerable amount of research is dedicated to understanding the petrophysical properties of these complex reservoirs. A variety of laboratories, funded by independents, are busy at universities and the various other R&D facilities worldwide to understand these rocks better. Technologies such as high-pressure MICP (mercury porosimetry analysis), SEM (scanning electron microscopy), and focused ion beam X-ray diffraction are being employed to understand pore structures on a nano level. The University of Oklahoma, one of the frontrunners in experimental laboratory work to understand shale rocks, has a laboratory funded by independents such as Devon and Apache. New findings in this laboratory are continuously driving and changing best practices independents apply in shale play development.9

Considering the large amount of production data from the hundreds of wells independents operate, and the manpower needed, the task of analyzing the data is often given to universities. This helps bring research funds to universities and creates opportunities for graduate students and researchers to introduce novel ideas in areas such as rate decline analysis for predicting EUR (estimated ultimate recovery), well test analysis, and reservoir simulation studies for typical reservoirs.

Hydraulic fractures are created on a massive scale in the horizontal wells drilled in these reservoirs. These fractures are the primary channels for gas flow, which comes from the matrix and the induced secondary fractures in the reservoir rock. The network of fractures is complex, and the mathematical modeling of gas flow through the fractures is a nightmare. A host of graduate students and researchers are busy evaluating hydraulic fracture treatments using production and pressure transient data. The aim is to predict long-term production behavior from these wells and hence minimize the uncertainty in the associated economics.

Research partnerships between independent oil and gas companies and universities benefit both sides. On the one hand, academe gets the opportunity to work on the latest technological challenges and propose feasible solutions, and on the other, independent firms gain conceptual insights into the technical problems they face and sometimes as a result can optimize their effort, time, and investment. TWA



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