scientific and engineering approaches to oil and gas exploration and production dean malouta,...
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Scientific and Engineering Approaches to Oil and Gas Exploration and Production
Dean Malouta, Manager of Technology Shell E&P Americas Region
Academy of Medicine,
Engineering and Science Conference
January 6-7, 2005
Dallas, Texas
Oil and Gas Dependency• Despite Government and Industry efforts, Oil
and Gas will continue to be the main providers of energy for Transportation, heating and cooling, well into the 21st century.
• Advances in Seismic Imaging, Low Cost Drilling Technology and Low Cost Production Capability are required to continue to meet our energy needs.
• Energy Companies must invest in alternative Energy Research for their own and the nation’s energy viability
20 year OIL Forecasts by the US Department of Energy:
Category 2003-2004 Annual Average
MMBOPD
2025 Expected Average
MMBOPD
% Change from Today
US Oil Demand
20.45 27.93 +37%
Mid East Imports
11.78 19.11 From 58% to 68%
Opec Production
31 55 +80%
Non-Opec Production
49 65 +32%
US Oil Production
5.7 4.73 -1%
20 year GAS Forecasts by the US Department of Energy:
Category 2003-2004 Annual Average
TCF
2025 Expected Average
TCF
% Change from Today
US Natural Gas Demand
21.94 31.47 +43%
Alaska Shipments
0.4 2.2 +450%
LNG Imports 0.4 6.4 +1600%
Natural Gas from Canada cannot keep pace with demand.
China will increase their demand for Canadian Gas.
New Alaska Gas Pipeline expected by 2016.
Coal will remain the primary source for electricity through 2025.
No new Nuclear Plants will be built by 2025 .
20 year Drilling Forecasts by the US Department of Energy:
Category November 2003 Count
November 2004 Count
% Change
TX Rig Count 473 539 +14%
Original Permits
894 1177 +31%
TX Oil Completions
139 291 +109%
TX Gas Completions
490 677 +38%
TX Wells Drilled
691 1063 +53%
Through an Environmental Protection Agency (EPA) grant, the RRC has created the Brownfields Response Program to identify sites to promote voluntary cleanup by funding site assessments at little to no cost. The EPA and the RRC are making a commitment to revitalize abandoned oil and gas properties by mitigating contamination and health risks and restoring the economic vitality to underutilized areas.
Active Rig Number US &TX
0500
10001500200025003000
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
YEAR
NU
MB
ER
TX
US
US Wells Drilled
05,000
10,00015,00020,00025,00030,00035,000
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
YEAR
NU
MB
ER
Historical Drilling Activity, US and Texas
Texas Annual Gas Production (BCF)
5,400
5,500
5,6005,700
5,800
5,900
1998 1999 2000 2001 2002 2003 2004
YEAR
BC
F/Y
r
Texas Annual Oil Production (MMBO)
0
100
200300
400
500
1998 1999 2000 2001 2002 2003 2004
YEAR
MM
BO
/Yr
In order for any Oil and Gas Technology Innovation and Deployment to be successful, it must satisfy 3 important factors:
1) Increase Production
2) Help Replace Reserves
3) Reduce Costs allowing for additional exploration and development
New Energy Source R&D must satisfy a positive Net Present Value Return on Investment
Developing & Implementing New Technology
Key To Success: Applying New Technology• Profitable growth in onshore gas will be driven by application
of technology and operational excellence skills
Focus Areas Key Technologies
Drilling Driving a step change in cost and cycle time performance
• Efficient development processes (Lift, facilities)
• Under-balanced drilling• Horizontal UB drilling• Casing Drilling
CompletionMaximize productivity/recovery through mastery of design and diagnostics
• Fracturing- Job design- Coiled tubing
• Diagnostics: –Microseismics–fiber optic temperature surveys
Reservoir CharacterizationReduce subsurface uncertainty
• Seismic interpretation: - Azimuthal processing to identify natural fractures- AVO for fractures, stratigraphy, and gas saturation
• Petrophysical calibration/advances to better characterize porosity, perm
Conventional
Conventional$4.1 MM
well
w/ advancements
OBMPDC BitsFrac optimizationComminglingTubinglessHPCTComposite PlugsLC PreventionUB DWC
1989 2003
• complexity increasing• smaller reserve targets
w/ 1989design
Uneconomic$9MMwell
Economic$3.5MM
well
UB DWC
ConventionalConventional
w/ Commingling
0
20
40
60
80
100
120
Extreme depletion
Firstsignificantdepletion
Days - Spud to Rig Release
1965-79 1989-1992 2000-01 2003-04
13-3/8” 13-3/8”
9-5/8”9-5/8”
5” 5”3-1/2” x 2-7/8”
UB DWC
10-3/4”
7-5/8”
5-1/2”
3-1/2”
Tubingless
13-3/8”
9-5/8”
7-5/8”
5-1/2”
14,500’ TD
2002 Ziff Energy Study – Drilling Deep High Pressure Wells with
Depletion
Days
Shell wells
5”
Convert to Tubingless
2 7/8”
5”
UnderbalancedDeepening DWC
2 7/8”
Slim-hole Re-entry program underway since 1994
Getting slimmer in 2004
5”
Under balancedSidetrack - DWC
2 7/8”
5”
Under balancedSidetrack/Deepening
DWC
2 7/8”
Ultra-Slimhole 2 1/16”
Sidetracks from 3 ½”
Tubingless wells
3 ½”
2 1/16”
Technology Development• High Pressure & Temperature Materials & Measurement Tools• Advanced, Quantitative Seismic Imaging• Unconventional (Heavy, degraded, acidic) Hydrocarbon
Development: Crude Upgrading• Tight Gas Completions• Artificial Lift• Under Balanced Drilling• Cheap Wells and Facilities• Pore Pressure Prediction• Expandable Casings and Liners• Hydrogen• Solar and other renewables
Typical seismic section showing the Vicksburg at Javelina Field
•Faults – N/S striking, normal, Dipping basinward, small antithetic faults
Sustainable Development• Health, Safety and Environmental Protection
– our # 1 concern in all operations, onshore and offshore.
• Government R&D Tax Credits – allow us to pursue lines of research otherwise unfeasible.– hydrogen, solar, renewables
• Severance Tax Breaks: – tax relief for life of well for producing all reservoirs under 1 mDarcy; – allow marginally economic wells to be brought on stream
• Zero Emissions Permitting – helps sustain the environment
• After Flowbacks After Fracs: – Capture gas generated in Frac jobs (no release to atmosphere) and sell it:
20-25 Mcf/well per frac job
• Land Fill Farming: – Take cuttings to a landfill site, add microbial degenerators and water,
recycle as clean fill.