Posted on 05/21/2008 10:25:36 AM PDT by Red Badger
High prices still haven't prompted companies to use advanced extraction methods.
Even with record-high oil prices, about two-thirds of the oil in known oil fields is being left in the ground. That's because existing technologies that could extract far more oil--as much as about 75 percent of the oil in some oil fields--aren't being widely used, according to experts in the petroleum industry.
Several well-established technologies, including "smart oil fields," exist that could significantly boost the supply of petroleum from oil reservoirs. But a lack of investment in such technologies, particularly by the national oil companies that control the vast majority of the world's oil reserves, is holding back implementation. When oil is drawn from a field too quickly, or from a bad location, or with the wrong kind of well, large amounts of oil can be left behind, says Richard Sears, a visiting scientist at MIT who has served as a vice president for exploration at Royal Dutch Shell, based in the Netherlands. But the best technologies for managing an oil field require up-front investment--when an oil field is mapped and characterized and the first wells are drilled--and the payoff can take decades.
In most oil reservoirs, the oil resides in porous rock in geologic layers that are tens of meters thick but stretch for miles. A conventional oil well is a vertical shaft, so it is in contact with only a narrow cross section of the reservoir. Such a well depends on oil percolating through microscopic pores over long distances. That can slow production, and often oil can be stranded inside the irregular geometry of the oil field.
For 15 to 20 years, however, it's been possible to drill horizontal wells. These follow along the length of an oil field, so that the well is in contact with oil for miles, rather than for just several meters. What's more, advanced imaging technologies and new drilling rigs have made it possible in recent years to drill to an accuracy of one or two meters, Sears says. The increased precision in drilling allows oil companies to stay close to the top of the reservoir, where the oil is, and away from the water that can exist in the reservoir.
It has also become possible to make "smart wells" that include sensors that can survive the extreme temperatures and pressures found deep underground. These allow oil companies to detect, for example, when water, instead of oil, is being pulled into the well, and to quickly shut off production from that area, while continuing to produce from other sections of the well.
Such smart oil fields have started to become more common for international oil companies such as Shell, Exxon-Mobil, and BP. But they still aren't used in most oil fields. And their use is particularly low in fields run by national oil companies, says Larry Schwartz, a longtime researcher and scientific advisor for Schlumberger, a Houston-based company that provides various services to oil companies.
Schlumberger historically focused on providing services at the "front end," he says, which includes taking measurements, such as of the amount of oil and how easy the oil will be to produce, and "drilling sophisticated wells." But since oil prices have been high, the company's biggest revenue stream has come from projects related to improving existing wells, such as by fracturing rock underground to try to improve oil production at conventional wells that have stopped producing as much as they used to.
Steven Koonin, BP's chief scientist, says that cutting-edge research could lead to automated oil rigs on the sea floor, ultra-deep-water ocean drilling, and arctic exploration and production, as well as to technology for extracting oil from unconventional sources, such as shale. But although oil prices have been higher than $60 a barrel for almost three years, Koonin says that for the most advanced technologies, "oil prices will have to stay high for a couple of years longer before companies think they can make big investments."
Ping!....
Been hearing it for decades that $50 was the break even point for most of these methods to pan out profitably.
Been three years now and they still haven’t bothered to start, they must know something we don’t I guess.
Nothing here that the greenest Roustabout on a South Texas rig does not know.
When you have politicians making the investment decisions, they ignore the advice on how to make their wells more productive. Instead they spend the money on things that get them votes..even though the long term outlook gets worse.
Pemex in Mexico is a good example,,Venezeula,,Iran,,etc. etc. India has somewhat seen the light..Brazil decided to take a new path and has done very well..going after the deep water oil with private company technology.
Actually, Directional Drilling has been done much longer than 15-20 years.
That $50 figure is probably if all other things remain the same. Only they don’t. Everything else is tied up in the price of oil. So, as oil goes up, the $50 figure goes up, too. Like the carrot on the stick, just out of the donkey’s reach........forever......
If I succeed, won't the price go down, because I've just added to the supply?
Won't the sheiks decide they can undercut my price?
So I have a hard time justifying that investment.
Whadda you expect? These are MIT types, not history professors!............
Therein lies the biggest key to all of this, not speculators. Look at the member nations of OPEC, almost if not all, are American/freedom hating countries with heavy marxist influences.
Add that the the ding-dongs in Washington, state officials, and yes, the IDIOT in the voting booth next to you, and you have a VERY VERY bad combination.
If the oil companies can’t utilize some of their mass, windfall profits to at least build additional refineries, we need to ‘redistribute’ their ill-gotten gains to the industrial base, and individual taxpayers, of this country to offset the damage. With extreme riches comes sizeable responsibilities.
When the day comes that they can't (because of the added demand), that removes one threat to such an investment.
The threat from Congress still remains.
NYMEX crude index 132.25 up 3.27
RBOB gasoline up considerably
Fuel oil up even more
This is no fluke although it might be panic. The recent June contract has just expired and we are now using July as the index.
It was sobering.
Yeah, but that day is highly unpredictable, isn't it?
In the meantime, knowing that my competition can undercut me SEVERELY (Oil was $25/bbl about 5 years ago) makes me think twice about jumping in.
It takes years to build a refinery. It takes years to get a permit to build a refinery. It takes years to fight a court battle with the environmentalists' "cease and desist" court orders in order to even start building a refinery. It takes years to fight the NIMBY crowds local government zoning edicts in order to even get a site to build a refinery.........We haven't built any refineries in the US in 30+ years. I wonder why?................
What they know is that if supplies increase then prices will fall. That would be highly unacceptable to the stockholders. Heads would surely roll.
Big oil does not view themselves as "Americans." They see themselves as citizens of the world. The oil companies are ground zero for the implementation of the New World Order and they are willing to accept the short term destruction of the USA in favor of long term prosperity in a world with no borders and therefore no currency exchange rates. In fact, this strategy is forging ahead right on schedule.
Karl Marx would be SO proud of you.
I worked for Shell for 30 years, most of it in exploration and production.
Actually, a lot of the new technique applicability depends on the nature of the field as well the the return on investment. For example, horizontal drilling makes a lot of sense when the field is full of fractures resulting in many, many small “pockets” of oil, each of which would require a separate well to produce via conventional drilling.
I think that whoever wrote this piece for MIT unintentionally obfuscated the distinction between “International” oil companies (which tend to be more technologically advanced) and “National” oil companies which can be advanced but are more often that not really behind technologically -— sometimes astoundingly so (e.g., Russia under the reds).
How exciting! Who are the Shell people who are “ground zero for the implementation of the New World Order and ... willing to accept the short term destruction of the USA in favor of long term prosperity in a world with no borders and therefore no currency exchange rates” -— maybe I know them and get in on it (I haven’t been retired all that long)?
I never dreamed when I was a U.S. soldier that someday I would give up my citizenship and become a “citizen of the world” by virtue of working for a company, but if you say it is so...
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