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Unconventional hydrocarbons

Domenico Grigo28 April, 2011

Unconventional hydrocarbons & Eni activity

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� From a geological point of view the Unconventional hydrocarbons are continuous

accumulations not depending on structural trapping and buoyancy effects.

Unconventional hydrocarbons usually include the following sources:

� Gas and liquids from very low permeability reservoirs (e.g. tight gas)

� Oil and gas from shales (e.g. gas shale, shale oil, oil shales)

� Gas from coal (coalbed methane)

� Gas from hydrates

Unconventional hydrocarbons

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� Gas from hydrates

� Heavy Oil/ Bitumen from oil/tar sands

From: Schenk and Pollastro, 2002

� The lateral continuity of the accumulations make the deposits potentially very large

� The low permeability of the reservoirs makes development project extremely drilling intensive

� Several factors contribute to determine the cost of the resources, their price on the

market and the profit margin of the projects:

� Good geological knowledge of the subsurface

� Availability of adequate technology

� Availability of infrastructures

� Support from the local authorities and government

� Favorable price long term prospects

� Ability to keep profit margin on long term

Unconventional hydrocarbons - Success factors

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� Ability to keep profit margin on long term

From: NPC 2007, Topic Paper #29)

Unconventional gas around the world

3000

4000

5000

6000

7000

8000

9000

Technically Recoverable Resources (Tcf)

Tight Gas

Shale Gas

Coalbed Metane

5

0

1000

2000

N. America

Former Soviet U.

Central Asia

Latin America

M. East & N. Africa

W&E Europe

Technically Recoverable Resources (Tcf)

Gas Shales

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� Not all shales are “gas shales”

� Shale gas is essentially natural gas containedwithin a sequence of predominantly fine grainedrocks dominated by shale.

� Shale traditionally has been regarded as ahydrocarbon source rock or seal. Shale gas boomin recent years has been due to moderntechnology in hydraulic fracturing as well as inhorizontal drilling.

Gas Shales

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� Shale gas has become an increasingly moreimportant source of natural gas in the UnitedStates over the past decade. It is expected thatshale gas will greatly expand worldwide energysupply.

� Shales that host economic quantities of gas havea number of common properties. They are rich inorganic material and are usually mature petroleumsource rocks in the thermogenic gas window.

Gas Shale: conventional source - unconventional reservoir

� Gas accumulation is continuous and not related to buoyancy

� The formation is simultaneously source rock and reservoir

� Gas presence is not associated to geological traps: the target is a portion of basin

� Gas production is achieved only with fracture stimulation

Not all the shale gas plays can commercially produce gas Key geological factors are:

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Key geological factors are:

� High Organic Content and Maturity

� Quality of organic matter: type II kerogene is the most favorable

� Low volume of shaly mineral

� Brittleness

� Presence of natural fractures that can be reactivated

� No producible water

� Sealing layers at top and bottom

� Limited Geohazards, like faults, karst areas and tectonic complexity

� Adequate depth and thickness of the producing play: if over-pressured, depth >3500 m can be acceptable

CBM28%

Tight Gas Sands23%

Shale Gas49%

Worldwide unconventional gas resources

30000+ TCF / 5000+ B boe*

Unconventional Gas

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28%

* source: National Petroleum Council

Fredonia 1821

� The year 1821 is regarded as the start of the commercial natural gas industry in the US.

� The first commercial US natural gas production came from an organic-rich Devonian shale in the Appalachian basin.

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an organic-rich Devonian shale in the Appalachian basin.

� The gas was used to illuminate the town of Fredonia.

� This discovery anticipated the more famous Drake oil well at OIL Creek, Pennsylvania, by more than 35 years.

Gas Shales: a new technology challenge

Besides a favorable combination of geologic factors,

key success factors are:

� Technology

� Horizontal Drilling + Multi Frac techniques

� Completion techniques

� Optimal horizontal drain spacing

� Logistics

� Minimize environmental impact → cluster drilling

� Easy Water supply and disposal

� Value chain management

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� Value chain management

� Low costs all along the exploitation chain

(“manifacturing process”)

� Location

� Proximity to transportation and treatment facilities

� Commercial

� Competitive Gas Market

� “ad hoc” contractual terms

*Gas shale projects are capital intensive and

characterized by low productivity / well

INC

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ER

MA

L M

ATU

RIT

YIN

CR

EA

SIN

G T

HE

RM

AL

MAT

UR

ITY

CRACKINGCRACKINGDEAD

CARBONDEAD

CARBON

REACTIVECARBON

REACTIVECARBON

ORGANIC MATTERIN SHALES

OILOILWET GASWET GAS

DRY GASDRY GAS

GENERATED HYDROCARBONS

MIGRATION TO SHALLOWER TRAPS

Gas Shale Geochemistry– Oil and Gas generation

More gas is generated at higher thermal maturity

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CRACKINGCRACKING

CRACKINGCRACKING

INC

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TH

ER

MA

L M

ATU

RIT

YIN

CR

EA

SIN

G T

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RETENTIONIN SHALES

SHALE GASSHALE GAS

Part of the generated gas is retained by the shales

INC

RA

SIN

G T

HE

RM

AL M

ATU

RIT

Y

DEADCARBON

DEADCARBON

REACTIVECARBON

REACTIVECARBON

ORGANIC MATTERIN SHALES

Gas Shale – Geochemical Characterisation

Total Organic Carbon % (TOC)

Hydrogen Index (HI)

Original Quantity & Quality of the O.M.?

Reactivity of the O.M.?

Geochemical parametersrelated to the gas abundance

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CRACKING

INC

RA

SIN

G T

HE

RM

AL M

ATU

RIT

Y

Kinetic of HC generation

Vitrinite Reflectance (Ro%)

Reactivity of the O.M.?

Pyrolisis RockEval (Tmax)

Maturity Level of the O.M.?

Gas Shale – the Geochemical Parameters

Interpretative guidelines for evaluating shale gas prospects

•TOC >1%•HI <100 (but assuming HIoriginal >350)

•%Ro > 1.2 (1-1.2 “gray area”)

Quantity & Quality of the O.M.?

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•%Ro > 1.2 (1-1.2 “gray area”)•Tmax >455 °C

•Transformation ratio >80%Reactivity of the O.M.?

Maturity Level?

Gas Shales - gas storage and production system

GAS in “3-porosity” system:

� Free Gas in rock pores (Primary Porosity)

� Free Gas in Natural Fractures (Micro-

Fracture Porosity)

� Gas Adsorbed into Organic Matter

GIIP = Gf + Gm + Gads

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Network of natural fracturesGas desorption from organic matter

Matrix flow Fracture system alimentation

Production Mechanism depends on Pressure Decline

Reservoir Volumes Splitting – example

HIGH depth – 8500 ft

0

20000

40000

60000

80000

100000

MM

scf

30000

35000

Gas Shales - Gas Storage

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LOW depth – 2500 ft

0500

10001500

20002500

30003500

40004500

5000

pressure - Psi

Adsorbed Gas MMscf Free gas Matrix porosity MMscf

Free gas in Microfracture MMscf TOTAL GIP MMscf

0

5000

10000

15000

20000

25000

0 500 1000 1500pressure - Psi

MM

scf

Adsorbed Gas MMscf Free gas Matrix porosity MMscfFree gas in Microfracture MMscf TOTAL GIP MMscf