New Oilfield Technologies You Should Keep An Eye On
Thursday July 14, 2016
The unconventional oil boom and off-the-chart production increases that occurred between 2008 and 2014 in the U.S. were driven mostly by technology, and chief among these technologies were horizontal drilling (which allowed E&P operators to follow the prevailing formations laterally), hydraulic fracturing (which allowed the operators to increase the permeability and porosity of tighter geologic formations), and the use of proppant (sand and fluid designed to keep the fractured pathways to the wellbore open).
The high price of oil during that period kept broad experimentation economically feasible, and the nature of the financing game kept most operators focused on the huge gains available in initial production, perhaps even at the expense of steeper decline rates.
The oilfield in 2016
What a difference 18 months can make.
One thing that hasn’t changed is the rock – players that leased positions early enough in strong acreage to get fantastic deals still have a tremendous advantage (unless they miss their held by production quotas).
But as the price of oil continues to hover in the $40s, most of the high dollar hedges have been played out, the financial sector is paying a lot closer attention to valuations and expected returns, and we’re again looking to technology to help us win the day.
Companies that are focusing on technological progression are going to have a natural advantage in reducing cost and getting to market, so let’s take a look at a few of the technologies that are being leveraged in the oilfield today, and what we might expect in the near future.
Enhanced Oil Recovery (EOR)
Previously, we’ve talked a bit about Enhanced Oil Recovery (EOR), and some of the advantages that “flooding” existing wells can have in a down market. Although lately there have been more tests with polymers and surfactants, nitrates, and even microbial methods, by and large we’re still seeing standard methods using steam (for heavy oil) and miscible gases (CO2 and HC) for lighter production.
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