Three major technical innovations in oil and gas

Oil and Gas

While the era of low oil prices continues, companies look to new technology to keep up production at lower costs.

One of the major ways to do this is by exploiting existing wells. Whereas in the past perhaps only around 60% of a well’s oil or gas was extracted, the rest deemed too expensive, now companies can go back in.

Of course the most notable development in recent years, at least in the case of North America, is hydraulic fracturing, known as fracking. Even that has changed, with “refracturing” using even more advanced techniques to get oil out of wells that have already been fracked.


The new shale boom

Schlumberger’s CEO Paal Kibsgaard, during the company’s Q1 2015 results call, estimated that there were “thousands of wells in North America that are candidates for refracturing and this is both shale liquids and shale gas. In terms of the market potential, I think you're talking billions, in terms of revenue opportunities, over an extended period of time. But this is quite a significant market opportunity.”

Whilst attractive from a cost point of view, in the sense that it’s much cheaper than drilling new wells, others think that the technology is not quite there yet, and that it’s a risky proposition, concerns addressed by Mr Kibsgaard: “I think the key here is that we're so confident in our ability to identify the right candidates and execute the refracturing work that we're prepared to take significant risks, in terms of how we go about doing this work. In many cases, if we can select the candidates, we’re prepared to foot the entire bill for the refracturing work and then get paid back in production.”

Norwegian Giant Statoil, explained their new fracking process during a tour with the New York Times of their Eagle Ford shale field in North Dakota: “It is trying out different grades of sand to blast along with water and chemicals to better loosen the hard rock deep underground and increase a well’s production, and varying the depths of wells to squeeze out even more oil. It is using new well chokes that technicians can operate remotely from a computer or even a smartphone to quickly adjust flows to maximize production without overtaxing pipelines,” says the paper.

Halliburton claims that its breakthrough diversion technology, ACTIVATESM, is a high-performing alternative to traditional diverting agents. In basins where Halliburton has delivered the ACTIVATESM Refracturing Service, the company says that operators have seen up to an 80 percent estimated ultimate recovery increase per well, as much as a 25 percent increase in oil recovery factor with a balanced portfolio and up to 66 percent reduced cost per BOE compared to new drills.


Big data

Big data has arrived at the oil and gas landscape as a direct result of new sensor technology. Not only can sensors determine the characteristics of possible deposits, they can now be attached to equipment to monitor, among other things, their overall efficiency. This data can then be used to speed up the drilling process.

The major challenge is to properly analyse the data in order to make full use of it. For example, BP is using big data analytics technology to screen huge geoscience data sets. In a project for the UK North Sea, data from 5,000 wells was analysed in just a few seconds, whereas a 100-well dataset would normally take a geologist a month to analyse.

According to the 2015 Lloyd’s Register Energy Oil Gas Technology Radar report, the rapid maturation of advanced data technologies is having an impact. The majority of its survey respondents (61%) agreed that their ability to collect and analyse data will be critical to the overall performance of the business over the next two years.


3D printing

3D printing could revolutionise manufacturing, allowing companies to create parts in situ. “Technology that creates vital machine parts using a laser beam and powdered metal is turning manufacturing on its head,” according to Royal Dutch Shell. “Instead of cutting out products from blocks of material, it builds them up in layers. Companies are already using this approach to produce rocket engine components and jet engine parts,” says the company. Check out their video here

Although pressure to reduce costs impacts companies’ ability to invest into innovation, it’s clear that those for whom innovation remains a high priority are the most likely to succeed in the long term.

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