Unconventional Oil and Gas Go For the Source
Unconventional Oil and Gas Go For the Source Stephen A. Holditch Texas A&M University 2011
Energy Supply in 2030
Low Carbon Options
Wind
Solar
2004 -- 445 QUADRILLION BTU PER YEAR
Nuclear Biomass CCS
2030 -- 678 QUADRILLION BTU PER YEAR
Source: IEA, 2006
World Oil Production and Forecasts Demand Forecast (SAH)
Billion barrels 2600
Billion barrels per year
2200 1800
Source: J. MacKenzie, 1996
Year
Production is mostly from conventional reservoirs
What Can Fill The Gap? • Gas Reservoirs (GTL) 6500 TCF of World Gas Reserves
• Unconventional Oil Reservoirs Heavy Oil, Shale Oil
• Unconventional Gas Reservoirs Shale Gas,Tight Gas, Coalbed Methane
• Biofuels Cellulose, Algae
• Electricity Wind, Solar, Nuclear
Unconventional Reservoirs • • • • •
Tight gas sands Coal bed methane Gas Shales Oil Shales Heavy oil
Unconventional Large volumes difficult to develop
Improved technology
Conventional Reservoirs Small volumes that are easy to develop
Increased pricing
Resource Triangle
Implications • All natural resources are distributed log normally – gold, silver, oil, gas, etc. • The high grade deposits are difficult to find but easy to extract • As you get deeper into the resource triangle, you need adequate product prices and improved technology
Implications • Low quality reservoirs can be enormous • There should be a log normal distribution of resources by quality in every oil and gas basin we now produce • Thus, in the Middle East, there should be very large volumes of oil and gas in these reservoirs
Selected 25 U.S. Basin Having TGS, CBM, and GS
Coalbed Tight gas
From Maps by GRI/GTI
Gas shale
• Many North America Basins have unconventional gas resources
• How do we select those to use as reference basins? 9
How Much Oil is Left in Conventional Reservoirs?
Worldwide Oil Production • Current oil production rate: 29 Billon STB/yr • Cumulative production - 1996* 784 Billion STB • Cumulative production 1997-2009 367 Billion STB • Through 2009, production is over 1151 Billion STB
* From Campbell
Worldwide Oil Production Billion STB
• Through 2009, cumulative 1151 • From 1965-2009 (BP.com)
North America South America Europe – Eurasia Middle East Africa Asia Pacific Total
224 83 226 305 108 92 1036
World Oil Reserves (Billion Barrels) 1400 World
1200
OPEC
1000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Does not include 150 Billion Barrels in Canadian Oil Sands
World Gas Reserves Conventional
Go for the Source • Obviously, there is a lot of conventional oil and gas to be produced • But in North America, unconventional oil and gas production is extremely important • We have found that some source rocks are also prolific reservoirs – especially coal seams and shales
http://ostseis.anl.gov/guide/photos/index.cfm Green River Formation Oil Shale
18
Source Rock Deposition - Type 3 Kerogen • Coal-rich strata – woody, Type 3 kerogen is gas-prone • Coalbed methane is an economic energy source
*
Indonesia
PEAT SWAMP – MISSISSIPPI DELTA
Average Compaction ratio: Peat Coal ~ 10:1
PEAT
Tree
3 kerogen commonly * Typeoccurs as dispersed
Photo by M. Jackson
organic material in shale gas source rocks and reservoirs
COAL
USGS Bakken Shale Formation Assessment (April 2008) The Bakken Shale formation is the largest continuous oil accumulation assessed by the USGS Resource Assessment - Bakken Oil in Place = 260 billion barrels Technically Recoverable = 4.3 billion barrels
Resource Assessment – Three Forks Oil in Place = 20 billion barrels Technically Recoverable = 2 billion barrels
Area The Bakken Shale formation covers some 7-8 million acres located in North Dakota and Eastern Montana Field is expanding Major operators are shifting focus from acreage accumulation to development
Map showing boundary of Bakken-Lodgepole Total Petroleum System (TPS) (in blue), five continuous assessment units (AU) (in green), and one conventional AU (in orange) defined for the assessment of undiscovered oil resources in the Upper Devonian–Lower Mississippian Bakken Formation in the U.S. portion of the TPS. The outermost green line defines the area of oil generation for the upper shale member of the formation. Map by USGS.
Bakken Shale data collected from the published report by the United States Geological Survey (April 10, 2008)
The Big Questions • How much of the Total Resource is Technically Recoverable Resource (TRR) and How much of the TRR is Economically Recoverable Resource (ERR)
• This is the research we are working on in the Department of Petroleum Engineering
Completion & Fracture Optimization in Gas Shales Maximize productive surface area Perforation placement is critical Identification of sweet spots Real time monitoring and control
Planned
Often Realized
Optimized
Courtesy of Schlumberger
Microseismic Mapping • Benefits Optimize fracture treatments in real time • Features: Validated location algorithms, anisotropic model calibration, automated real-time system
Courtesy of Schlumberger
What Are the Implications for the Future? • There is a lot of unconventional gas • Wells completed in UCRs do not recover much gas per completion • We need to drill a lot of new wells • We need more rigs and equipment • We will need more personnel
I have two main points!
Point 1 • The Oil and Gas Industry Is a growing, High technology, Global business.
• There is a lot of room for young, bright professionals
Point 2 • There are no shortages of oil or gas resources We have developed the technology to produce most of the unconventional oil and gas reservoirs Many of the best reservoirs are actually the source rocks Not all unconventional reservoirs are economic to produce today However, with better technology and the right price, we can produce a lot of oil and gas from these sources
Thank you !
Energy Supply in 2030
Low Carbon Options
Wind
Solar
2004 -- 445 QUADRILLION BTU PER YEAR
Nuclear Biomass CCS
2030 -- 678 QUADRILLION BTU PER YEAR
Source: IEA, 2006
World Oil Production and Forecasts Demand Forecast (SAH)
Billion barrels 2600
Billion barrels per year
2200 1800
Source: J. MacKenzie, 1996
Year
Production is mostly from conventional reservoirs
What Can Fill The Gap? • Gas Reservoirs (GTL) 6500 TCF of World Gas Reserves
• Unconventional Oil Reservoirs Heavy Oil, Shale Oil
• Unconventional Gas Reservoirs Shale Gas,Tight Gas, Coalbed Methane
• Biofuels Cellulose, Algae
• Electricity Wind, Solar, Nuclear
Unconventional Reservoirs • • • • •
Tight gas sands Coal bed methane Gas Shales Oil Shales Heavy oil
Unconventional Large volumes difficult to develop
Improved technology
Conventional Reservoirs Small volumes that are easy to develop
Increased pricing
Resource Triangle
Implications • All natural resources are distributed log normally – gold, silver, oil, gas, etc. • The high grade deposits are difficult to find but easy to extract • As you get deeper into the resource triangle, you need adequate product prices and improved technology
Implications • Low quality reservoirs can be enormous • There should be a log normal distribution of resources by quality in every oil and gas basin we now produce • Thus, in the Middle East, there should be very large volumes of oil and gas in these reservoirs
Selected 25 U.S. Basin Having TGS, CBM, and GS
Coalbed Tight gas
From Maps by GRI/GTI
Gas shale
• Many North America Basins have unconventional gas resources
• How do we select those to use as reference basins? 9
How Much Oil is Left in Conventional Reservoirs?
Worldwide Oil Production • Current oil production rate: 29 Billon STB/yr • Cumulative production - 1996* 784 Billion STB • Cumulative production 1997-2009 367 Billion STB • Through 2009, production is over 1151 Billion STB
* From Campbell
Worldwide Oil Production Billion STB
• Through 2009, cumulative 1151 • From 1965-2009 (BP.com)
North America South America Europe – Eurasia Middle East Africa Asia Pacific Total
224 83 226 305 108 92 1036
World Oil Reserves (Billion Barrels) 1400 World
1200
OPEC
1000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Does not include 150 Billion Barrels in Canadian Oil Sands
World Gas Reserves Conventional
Go for the Source • Obviously, there is a lot of conventional oil and gas to be produced • But in North America, unconventional oil and gas production is extremely important • We have found that some source rocks are also prolific reservoirs – especially coal seams and shales
http://ostseis.anl.gov/guide/photos/index.cfm Green River Formation Oil Shale
18
Source Rock Deposition - Type 3 Kerogen • Coal-rich strata – woody, Type 3 kerogen is gas-prone • Coalbed methane is an economic energy source
*
Indonesia
PEAT SWAMP – MISSISSIPPI DELTA
Average Compaction ratio: Peat Coal ~ 10:1
PEAT
Tree
3 kerogen commonly * Typeoccurs as dispersed
Photo by M. Jackson
organic material in shale gas source rocks and reservoirs
COAL
USGS Bakken Shale Formation Assessment (April 2008) The Bakken Shale formation is the largest continuous oil accumulation assessed by the USGS Resource Assessment - Bakken Oil in Place = 260 billion barrels Technically Recoverable = 4.3 billion barrels
Resource Assessment – Three Forks Oil in Place = 20 billion barrels Technically Recoverable = 2 billion barrels
Area The Bakken Shale formation covers some 7-8 million acres located in North Dakota and Eastern Montana Field is expanding Major operators are shifting focus from acreage accumulation to development
Map showing boundary of Bakken-Lodgepole Total Petroleum System (TPS) (in blue), five continuous assessment units (AU) (in green), and one conventional AU (in orange) defined for the assessment of undiscovered oil resources in the Upper Devonian–Lower Mississippian Bakken Formation in the U.S. portion of the TPS. The outermost green line defines the area of oil generation for the upper shale member of the formation. Map by USGS.
Bakken Shale data collected from the published report by the United States Geological Survey (April 10, 2008)
The Big Questions • How much of the Total Resource is Technically Recoverable Resource (TRR) and How much of the TRR is Economically Recoverable Resource (ERR)
• This is the research we are working on in the Department of Petroleum Engineering
Completion & Fracture Optimization in Gas Shales Maximize productive surface area Perforation placement is critical Identification of sweet spots Real time monitoring and control
Planned
Often Realized
Optimized
Courtesy of Schlumberger
Microseismic Mapping • Benefits Optimize fracture treatments in real time • Features: Validated location algorithms, anisotropic model calibration, automated real-time system
Courtesy of Schlumberger
What Are the Implications for the Future? • There is a lot of unconventional gas • Wells completed in UCRs do not recover much gas per completion • We need to drill a lot of new wells • We need more rigs and equipment • We will need more personnel
I have two main points!
Point 1 • The Oil and Gas Industry Is a growing, High technology, Global business.
• There is a lot of room for young, bright professionals
Point 2 • There are no shortages of oil or gas resources We have developed the technology to produce most of the unconventional oil and gas reservoirs Many of the best reservoirs are actually the source rocks Not all unconventional reservoirs are economic to produce today However, with better technology and the right price, we can produce a lot of oil and gas from these sources
Thank you !
