Advanced technology rebuilds global hydrocarbon resource base

DENVER, Colo.—Technology will transform the future of the oil and gas industry. "We believe there is a nontrivial chance that unconventional reservoirs may contain more recoverable oil and gas than all of the conventional reservoirs combined," said Greg Leveille, general manager, unconventional resources, ConocoPhillips.

"There is an abundance of resources yet to pursue, but mankind has consumed about 1,850 billion boe within the last 150 years," Leveille said. He and several other panelists recently shared views on technologies that may transform the future of energy resources at the Unconventional Resource Technology Conference held in Denver.

Currently, global consumption of oil and gas is equal to 50 billion boe/year. "Around the turn of the century, governments and industry were both expressing concerns that the world was running out of oil and natural gas," Leveille said. Discussions began to form around the need for alternatives such wind, solar, and other nonhydrocarbon-based sources.

The Eagle Ford shale was widely considered noncommercial in 2006. This rig is one of more than 250 working to develop the play, expected to become one of the largest in the US. Photo by ConocoPhillips.
The Eagle Ford shale was widely considered noncommercial in 2006. This rig is one of more than 250 working to develop the play, expected to become one of the largest in the US. Photo by ConocoPhillips.

According to the US Energy Information Administration, unconventional resources now represent an endowment of 7,000 tcf of gas and 340 billion bbl of oil. "Technology advances we might expect from unconventional reservoirs really have to do with the size of the unconventional resource revolution in the time since the onset of focus on these technologies," Leveille said.

Unconventional reservoirs are typically identified as reservoirs having less than 0.1 md of permeability. "In regions that contain the richest sources of conventional oil and gas reserves, unconventional resources have not yet been accessed," Leveille said. "Once these are factored in, global unconventional resources may perhaps rival all of the conventional sources of oil and gas we've been pursuing for the last 150 years."

Technological transformation

There is no shortage of innovation and research into promising new technology to unlock the complexity of the unconventional reservoir system. That was the view taken by Doug Valleau, director, unconventional resources technology, Hess Corp.

The main goal of technology is to enable producers to operate better, faster, cheaper, and safely. Valleau referred to this as the functional goal of technology. Another goal for technology is to provide additional safety and advanced environmental quality that protects other natural resources, he said.

Given the relatively short time since the onset of work in unconventional resources, technology advancement is an encouraging endeavor. "When you think about making technological changes, if you can change the recovery factor by only a small amount, the volumes are absolutely enormous," Leveille said.

Reservoir modeling

Driving the need for advanced technologies, unconventional reservoirs are complex and require greater understanding of the fundamental physics of these nanopore systems, according to Valleau. Modeling and simulation are two areas that will revolutionize unconventional development. "Because of the extreme heterogeneity of the rock strata, geologic models require much greater detail and a much better understanding of the regional and local stress," he said.

Integration of geoscience and geomechanics is an important step toward advanced reservoir engineering. "From my perspective as a petrophysicist, we've never had as much core data to hold our feet to the fire," said Mike Mullen, president, Stimulation Petrophysics. Modern core data provide a defined sense of minerology. "In the past with most conventional reservoirs, determining whether clay was ‘present' and ‘not present' often sufficed," Mullen said. Today, companies can query how much clay is present, how the clay may react with certain processes, and how the clay is composed. Questions on the true value of porosity and the actual permeability of a core sample can be answered with certainty, which provides for better reservoir models. "We can now be more precise with our interpretation," Mullen said.

Advanced reservoir data allow geophysicists to better present reservoir information in cases where management teams can actually use these data to make financial decisions. "Most companies have not had this ability before," Mullen said. "The integration of this data interpretation is the challenge as many petrophysicists have created summaries on a variety of sources that never get passed over into other disciplines that could make use of them," he added.

"It's not good enough to simply pick the right play," ConocoPhillips' Leveille said. As an example, Eagle Ford acreage was vastly available in 2006. "It could have been just as productive as any acreage in the world as far as commercial returns, or a company could have sunk a lot of capital into the region with little return based on flow rates," Leveille said. "It is necessary to identify the sweet spots, and this is not always easy to do."

Within the next 5 to 10 years, advancements in reservoir modeling and data acquisition will be important as companies move into international regions in search of unconventional resources with very little data compared to what is available in North America.

Well design

Modern unconventional resource development requires many frac stages to create an extensive flow network. "Frac models must now have greater levels of complexity to represent how we fracture into the reservoir," Valleau said. Because multiphase systems grow through micro-nanopore networks in unconventional reservoirs, simple, planar frac models no longer represent the full complexity that is created by most frac jobs. "It's equally challenging to predict where the proppant is and where it is delivered to within the fracture network," he added.

"All of these aspects will need to be integrated into the next generation of reservoir models to provide better understanding of how to increase production while also lowering cost," Valleau said. Effectively stimulated rock should be capable of showing the effective outcome of the fracs. "We all want to know where the frac propagates, where the proppant lands, what portion of the reservoir is producing, and what is the effectively stimulated volume," he added.

Hess will be presenting its research on 4D microseismic at the Society of Petroleum Engineers annual meeting in October. "We have actually done this in one experiment, and we believe we can directly image the actual producing volume from the fracture of propagation," Valleau said.

Deeper understanding of fundamental physics involving multiphase flow in unconventional reservoirs is under way. "Imaging of the actual nanopore system under normal temperatures and pressures is leading to numerical models that can be used to further predict reservoir behavior and will help us better understand enhanced oil production and processing," Valleau said. The end result will be confidence in predicting reservoir performance, thereby allowing for better identification of sweet spots.

The optimization of completion design and development plans will also serve the industry in the years to come. "The industry spends large amounts of time figuring out the right completion technique and proper well spacing (laterally and vertically) for thousands of wells in a variety of unconventional plays," Leveille said. "This will change as we begin to understand the physical principles involved in fracturing and producing from nanodarcy reservoirs."

To date, a large percentage of the wells drilled and completed draw very little data from downhole. According to Leveille, as the industry develops better devices to understand what is happening in the wellbore, this will begin to change very rapidly.

Nanotechnology

On a global scale, nanotechnology innovation is paving the way for further advancements, and nanolaminants are being evaluated for high-strength, low-weight, and high-heat tolerances. Functionalized coatings of all types will become ever more important in unconventional development. For example, nanoscale particulates are being added to drilling fluids to improve flexibility in high-temperature, high-pressure scenarios, thereby reducing fluid loss.

Downhole sensor technology also will see advances through the advent of nanotech engineering. "Researchers are working on advanced sensors capable of being injected with the proppant to record and then be interrogated for information," Valleau said. Other innovations on the horizon include nanothermite, which is an explosive proppant (or ‘popcorn' proppant) that may have potential benefits in some applications.

A new class of surfactants utilizing nanomaterials has the potential to alter surface properties that could be pumped with the primary completion job and possibly improve recovery from day one.

Filtration is another area where research is showing some improvements to technology. There are commercial filtration technologies that can remove contaminants and provide oil/water separation. "On the horizon operators will be using these techniques in a downhole application by removing CO2 and H2S before these can reach the surface," Valleau said.

Environmental stewardship

Flare gas and water use are two of the biggest topics drawing criticism for unconventional resource development. Mitigating or eliminating the industry's footprint with these two issues may go far in easing some of the skepticism faced by the industry.

"Flare gas is on everyone's mind," Valleau said. The question of reduction, use, and selling flare gas is currently being addressed through technology research and development and will see continued improvement throughout the next few years.

Opportunities for gas reinjection are already in use but are not always practical. "Pipeline infrastructure development takes time, and it can be costly to take the risk of installing upfront prior to having a good understanding of the materiality of a specific shale play," Valleau said.

Onsite use of flare gas is possibly one of the more interesting trends now manifesting in unconventional development. Hess is now converting its rig fleet in the Bakken to natural gas power, which is providing a savings of nearly $30,000/well.

Water management also will continue to be an issue as newer technology brings more and more unconventional reservoirs into commercial reach. Several technologies are developing that have the potential to drastically reduce the amount of fresh water used to develop unconventional reservoirs.

"In the order of nonacqueous stimulation, waterless fracing might seem new, but CO2 and alcohol foams have been used for many years," Valleau said. In the mid-2000s patents were granted for propane stimulation. There are some concerns from an environmental standpoint on using a flammable gas as a medium for hydraulic fracturing, but the process has been carried out safely in several areas within the last few years.

"New technologies are emerging that are suggesting that improvements can be made to the propane by rendering it inflammable," Valleau said. "If this technology proves out, it could revolutionize our water use in the industry."

Water management technology will continue to minimize freshwater use, improve profitability, and increase the industry's water stewardship. Drilling and completions and enhanced oil recovery consume large amounts of water in the US. Much of this water comes from ground and surface water resources. "Trucking produced water to disposal sites adds stress to roadways, and the process of wastewater injection has come into focus in recent years for its association with new seismicity," Valleau said.

The rise in water use in unconventional development has increased the need to treat and reuse flowback water, which has led to many new technologies. "Molecular filtration is costly, but as well may soon become more economic," Valleau said.

"I'm confident that within three to five years we will have engineered an economic solution to the industry's water issues." Leveille added, "There will come a day when the industry will not need potable water for fracturing operations."

With modern and continuing advances in treating produced water and saline brines, it is possible that the future of unconventional development could be carried in a waterless fashion.

Integrative methods

The industry is founded on expertise, and it will take the integration of advanced technology to move it forward into a better view from its various stakeholders.

The unconventional resource boom is the biggest energy success story thus far in the 21st century. Conversations about ‘peak oil' are rarely heard. Because it is now such a large endowment, natural gas is no longer referred to as a ‘bridge' fuel to alternative energies such as wind and solar. "What's happened with hydrocarbons is amazing," Leveille said. "Unconventional resource technology has basically replaced all of the hydrocarbons consumed since the dawn of the industry more than 150 years ago." As technology continues to advance, reservoirs that are considered noncommercial today may be commercial opportunities in the future.

Editor's note: Comments were presented at the first annual Unconventional Resources Technology Conference (URTeC), a joint effort among SPE, SEG, and AAPG, held in Denver, Aug. 12-14, 2013.

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