Executives working in the North American tight oil phenomenon said recently the work is just beginning. And they said that while they think it will eventually expand to the rest of the world, that won’t happen quickly.
William Maloney, executive vice president for development and production in North America for the Norwegian company Statoil, said most nations lack the entrepreneurial companies, the infrastructure and the private land ownership that have made the rapid expansion of shale and other tight oil plays possible in North America.
“The conditions just aren’t there,” he told a breakfast audience at the IHS CERAWeek conference in Houston.
Even in the United States, where drilling has transformed state economies from Texas to North Dakota and Pennsylvania, work is just in its infancy, panelists said.
Patrick Schorn, president of the production group at Schlumberger, said he expects production to grow by several hundred thousand barrels a year, while technological advances drop operating costs.
But companies will need to make other changes to keep pace, several other speakers said.
Mike Bahorich, executive vice president and chief technology officer at Apache Corp., quoted country singer Toby Keith in suggesting that this is no time to rest on the success of the past few years.
“In the words of Toby Keith, we need a little less talk, a lot more action,” he said.
He noted that diesel is still the dominant fuel for high horsepower engines, which drive operations at drilling sites. Apache worked with Caterpillar, Halliburton and Schlumberger last year to convert drilling equipment to run on natural gas at several sites, and Bahorich said that technology will be more widely available this year.
That’s captured industry attention, both because of the low cost of natural gas and because of the possibililty for lowering emissions.
But Bahorich said the key issue for industry technology officers is that of increasing recovery rates for hydraulically fractured wells.
Recovery rates now average 3 percent to 5 percent, he said. Ideas to improve that range from “more brute force” — increasing the number of fractured stages per well — to using chemistry to reduce oil blockage and help it flow more easily from the rock.