Shale shale shale.....

In my early 2013 blog, I wrote of how shale was picking up. Now, in mid-2014, USA production exceeded that of Saudi Arabia based on just shale! Bloomberg reported on 4th July: "U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter."

Are you serious? And US has not even tapped into the conventional oil and gas reserves they have saved for the future (future = when middle east wells all go dry). This literally has been the biggest shot in the arm for the industry, since the attempted amputation of the Macondo disaster.

The industry stalwarts are swaying around with a "We're back you suckers" smile on their faces, and this time, they are right.

This has to be the biggest shining example of research and development leading to new technology to develop a new source of oil and gas, right? Heck No!

Let's break this down. Technologies used:

- our very maligned buddy, fracking: New?
HA! The first experimental use of hydraulic fracturing was in 1947, and the first commercially successful applications of hydraulic fracturing were in 1949. People who are protesting fall into two categories: (1) Who are being affected by surface gas leakage, and (2) Who are anti O&G industry no matter what. If the industry looks closely and helps category (1) people, this will not remain an issue for long. In many case the gas was leaking long before the fracking started, but some other cases may be worth looking into. I just hope such leakages don't harm people.

- special drilling technology: Directional drilling began back in the 30's and horizontal drilling in the 70's

- special wells: Well technology developed for deep sea had it all covered.

So..... what's different? The difference is that we have no clue how to predict the amount of shale oil/gas we can get from a tight enough shale. The fluid sampling methods are still suspect, some "in-situ fractional distillation" may be occurring but then how to correct for that if what we are getting in the well is only the light fractions of what is in the shale? Compositionally speaking, if we have the lighter hydrocarbon fractions, we can predict jack about the heavier hydrocarbon fractions.....


So..... the wild catting days are back, eh?

We have a long way to go, and I pray that we continue to get the shale producing for that long......

2013 starts.... with Shale

WTI 93, Brent 111...... So?
World is going gaga over Shale oil and gas. Hell..... even China is allowing foreigners to come in and tell them how to exploit their shale resources!! (Can you believe that?!!!)
Does that mean do we know a lot about it? Nopes. Nada.
Self-proclaimed experts abound as they do whenever some new stuff comes around. But the fact remains that not many people have any data which can be used to see if any theories make any sense.... and those who do have some data, are not talking!
Where is the oil? How does it flow? What kind of pore-spaces does it come from? Do nano-pores have an effect on the composition of the hydrocarbon fluid? Do the intermediate pore throats connecting the pore spaces cause the fluid to change behavior?
So many questions..... But are they the questions one should be concerned about? Of course..... how else will we be able to 'simulate' shale oil? But currently, the questions being raised are the easier ones, concerning the hydraulic frac designs, effect of natural fracs, completion techniques etc etc. Answering these will help the initial development but won't be able to take us too far unless we can answer the more detailed unknowns....

Who are we kidding???

So the price per barrel has gone below $70. So? What's the hullabaloo about? Yes, the financial slow-down is a matter of concern, but neither is a $60 crude bad for our oil industry nor for the economy in general. So why the cribbing? Who told people to bet on $140 per barrel? Were they completely out of their minds?
When I entered the industry the crude was going at $10...... and we were STILL planning EOR projects, ready to initiate them as soon as the price went beyond $16!!
Greediness has been the downfall of many a industry.... even our industry had learnt its lesson a couplo-three decades back...... or did we?
If we can concentrate on the REAL issues, such as human resources and the lack of competition in many oil-field services, we could do a whole lot better.

Oil Industry Ethos

What is it that makes non-industry people hate us? My bet is that it is the history of the industry which was mostly governed by the erstwhile Exxon. Whenever I talk to an environ'mentalist' all they have to say about the industry is: "Exxon Valdez"!!! Will you let it go already??!!!

The matters are made worse by nincompoop Wall-Street ass-kissers with no background in petroleum engineering who claim to 'know' exactly how much hydrocarbons are left in the reservoirs and when they are getting finished. They all seem to conveniently leave out the fact that as crude prices go up, there is more money in the industry to employ more EOR techniques to enhance the production.

The oil industry is made up of people too...... and 99% of us are not Texan/Russian oil magnates! We are regular people who would also like to see a better environment and a better society. Take us out and the world will time travel back to the 18th century!