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Crude oil and natural gas have been major pillars of the modern civilization during the past century. They are among the most valuable depletable global resources. The energy market has witnessed many oil price shocks during the past several decades. Such instabilities have impacted the global oil and gas industry in ways that have included disruption of investment in the infrastructure, slowdown of advancements in technology development, and backwardness on attracting and training creative solution providers. OPEC (Organization of Petroleum Exporting Countries) has been partly blamed for instigating such price instabilities. Recently, and since the latter part of 2014, in the fear that the shale resource developments may affect the market share of the OPEC producers, oil prices have dropped significantly because of OPEC countries, while suffering losses to their own economies, flooded the market with cheap oil. The global oil industry is now facing a similar situation it has faced several times during the last three decades.
Advantages and disadvantages of low oil prices for both net exporters and net importers of crude oil, as well as the global economy, have been extensively discussed in the literature. Based on the available statistics, while in the short terms, OPEC producers may regain their market shares by producing low cost conventional oil and discouraging shale oil and gas developments, in the long runs, this might not be a successful strategy. OPEC countries in few decades will be paying a high price when their conventional resources reach to levels barely satisfying their domestic needs. Furthermore, because of current orchestrated low prices for shale resources they are preventing their own countries from investing in the development of unconventional resources in terms of technology, manpower and pace of development. In this study we examine the potential of source rock development in some OPEC countries and discuss the importance of realizing the real value of crude oil when it gets to pricing a depletable resource and considering the substitution cost.
Technology Focus Have you heard the story about the "17-year overnight sensation" (Durham 2005)? (If you work in northern Texas or are involved in unconventional resources, then your answer probably is yes, and if so, please bear with me—it is a great story and worthy of being repeated.) In the early 1980s, in a county on the outskirts of Fort Worth, Texas, there was a privately owned oil and gas company that just would not give up on a novel idea it had for obtaining a new source of gas for a large existing gas-gathering infrastructure and a large gas-processing plant. It seemed that whenever it drilled a well for deeper horizons, it encountered a significant gas show in a very thick shale section that contained methane and some heavier gases. Some brave soul, probably a very young engineer or geologist, suggested testing the shale to see if it possibly could be productive. At the time, the conventional wisdom was that the shale was probably a source rock, but was certainly not reservoir quality and certainly not productive. But the president of the company had faith in his young professionals and gave the go-ahead for testing. The first well, the C.W. Slay No. 1, was an economic failure, as were the next 40 wells (Bowker 2003). It took 17 years for the company to develop an economic technique that worked. How many companies that you know have that kind of patience? In 1999, very few people had heard of the Barnett shale, but by 2001, it was well on the way to becoming the largest gas field in Texas. I think that stories like this make unconventional recovery a very exciting arena in which to work. The resource is there, the demand is definitely there, and it is up to engineers, geologists, and enlightened managers to make it happen. In this issue, we look at three great examples of applying new technology and knowhow in the areas of coalbed methane, tight-gas-field deliquification, and gas hydrates. Is there another 17-year overnight sensation here? You be the judge. References Bowker, K.A. 2003. Recent Developments of the Barnett Shale Play, Fort Worth Basin. West Texas Geological Society Bulletin42 (6): 4–11. Durham, L.S. 2005. The 17-Year Overnight Sensation. Explorer 2005 (May). . Accessed 5 June 2008. Unconventional Recovery additional reading available at the SPE eLibrary: . SPE 114173 • "Stimulating Unconventional Reservoirs: Maximizing Network Growth While Optimizing Fracture Conductivity" by N.R. Warpinski, SPE, Pinnacle Technologies, et al. SPE 110590 • "Potential for Oil-Shale Development in the US" by Khosrow Biglarbigi, Intek, et al. Additional reading available at OnePetro: . OTC 19519 • "Four Critical Needs To Change the Hydrate-Energy Paradigm From Assessment to Production: The 2007 Report to Congress by the US Federal Methane Hydrate Advisory Committee" by Dendy Sloan, SPE, Colorado School of Mines, et al.
Unconventional resources are those that were bypassed by conventional oil and gas recovery technologies for decades because they were not considered economically feasible to produce. Improvements since the early 1990s in geophysical and geochemical exploration and in drilling and completion technologies have opened up vast new resources both onshore and offshore. Some unconventional resources are in hostile or challenging environments such as the Arctic tundra or deep water. Others are in regions that have not previously experienced extensive oil and gas development and thus lack infrastructure and community and political support. Unconventional resources encompass tight oil and gas formations, shale gas, coalbed methane, heavy oil, oil shale, deep and ultradeepwater plays, and gas hydrates.
Abstract Although the reported potential unconventional gas resource volumes in emerging regions (Middle East, North Africa, and South Asia) are almost similar or higher in size to North America, the exploitation of such resources has been very limited. Using North America as an analogy, unconventional gas production is proposed to drastically increase globally in upcoming decades. However, many challenges are associated with developing and evaluating unconventional resources. Exploitation of tight-gas plays borrows extensively from a suite of technologies that are already available within the conventional oil and gas industry. However, there are several aspects of unconventional reservoirs that make them difficult to understand. New techniques are compulsory to demonstrate and evaluate this new era of hydrocarbon resource exploration. Highly specialized designs and an integrated approach of all technologies are essential to unlocking these significant unconventional resources. Accomplishing efficient tight gas stimulation also requires paradigm shifts from what is currently being performed, particularly in the emerging regions, as most of the hydraulic fracturing processes presently being used heavily depend on large volumes of available water, and water scarcity is historical in many of these areas. This paper highlights challenges associated with developing tight gas resources and the role of cutting-edge technologies to answer several pertinent questions about unconventional reservoirs. Also provided is a technical overview of the best strategies for field development to capitalize on the promising potential of these reservoirs. Additionally, alternative approaches are proposed that appear to be imperative to enhance the current stimulation technologies for tight gas formations. This can act as an enabler to address challenges presented by unconventional resources in the emerging regions and harness the trapped energy, which can work as a cornerstone to fuel the economic growth of the world.