Analytically-derived criteria are presented for the orientation of fracture initiation from horizontal wellbores drilled in porous-permeable (poroelastic) media. This involves drilling-induced tensile fractures (DITFs) from non-perforated wellbores and completion-induced hydraulic fractures (CIHFs) from perforated wellbores with cylindrical perforation geometry. The criteria are developed considering the tangential stresses on two points (extremes) around the base of the perforation; one for the initiation of longitudinal fractures and another for the initiation of transverse fractures, with respect to the wellbore. In-situ stress state, wellbore pressure, and the formation's mechanical and poroelastic properties are independent variables that are shown to control the orientation of the initiated hydraulic fractures; the dependent variable.
The DITF orientation can be used to constrain the magnitude of the maximum horizontal stress; the most difficult aspect of the in-situ stress tensor to constrain. Transverse CIHF initiation only occurs over a narrow wellbore pressure-at-breakdown window, while longitudinal initiation occurs at comparatively higher wellbore pressures. However, transverse CIHF initiation occurs more frequently than transverse DITFs, because the presence of perforations aids transverse fracture initiation. The region of the in-situ stress states where transverse initiation is promoted is shown in dimensionless plots for perforated and non-perforated wellbores. Fracture initiation criteria for specific cases presented can be used to predict the orientation of fracture initiation in oilfield operations.
The orientation of CIHFs controls the productivity of hydrocarbon reservoirs. Productivity from low permeability formations is greatly improved having multiple fractures oriented transversely rather than longitudinally, relative to a horizontal wellbore. Fracture initiation often follows a plane different to the final fracture propagation plane. Stress re-orientation in the near-wellbore region may promote fracture initiation of different orientation than the orientation dictated by the far-field stresses. The range of in-situ stress states in which transverse fracture initiation is promoted increases as Biot's poroelastic coefficient,
Historically, oilfield services companies seemed to be financially more sensitive to crude oil price volatility compared to companies doing exploration and production. This was evident both in times of rising and falling price, imposing serious challenges to them. The year 2014 marked, after a 40 percent drop in the price of oil, the agreement for one of the largest acquisitions in the industry between two of the biggest international oilfield service providers; that of Baker Hughes, Inc. by Halliburton Co. The implications of these price fluctuations significantly influence this sector of the industry shaping the narrative around it.
This paper evaluates the extent to which crude oil price variations affect the service companies in the stock market compared to exploration and production (E&P) companies. Regression analysis is performed on two sample groups; one consisting of service companies and the other of E&Ps. Daily data from the beginning of 1986 until early 2015 is used for both stock and crude oil prices. When compared to the E&Ps group, the service companies group is more oil price sensitive throughout the whole period by a factor of almost six and a half. In particular, from 1986 to 2007 this factor is 6.3. For the post 2008 period, a reverse causality effect is observed for both groups with changes in the oil price, with the service companies group slightly less sensitive, yielding a factor of 0.9.
The factors responsible for the observed phenomena are evaluated, backed with data analysis. The higher economic limits of unconventional compared to conventional energy resources, make the service companies specializing in unconventional play development struggle as these are the first to become uneconomic in times of falling price. The downstream operations most E&Ps have unlike service providers, enables them to buffer losses in their upstream sectors when price drops and vice versa. Also, the decreasing dependence of the E&Ps on service companies as they grow bigger makes the latter less adroit to price variations than the former. Finally, the rise of the national oil companies in recent decades in terms of production and reserves control, has led to additional competition against service companies by international oil companies for providing specialized technical assistance.
Energy, coming in its great majority from oil and gas has become a strategic factor in global geopolitics. It is key to national power and a major requirement for economic growth. Energy consumption has become the most palpable national characteristic that separates rich from poor countries. The United States, the richest nation in the "room" is also the most intense user of energy per capita.
There is a substantial imbalance in the location of energy producers and consumers, an imbalance that has precipitated world conflicts and one that will likely cause future upheavals. There is huge activity by China buying energy resources all around the world. Russia's recent ascendancy in the energy world has been an important counterbalance to the power of OPEC. However, recent events surrounding Russia's energy industry have exposed fissures within the economic and political makeup of the country.
The United States Shale Revolution has, and will, bring market distortions throughout the entire nation and to many others such as the energy-starving, Southeast Asia markets of China and Japan. The recent removal of restrictions on LNG exports by the American government means that new forces will be implemented on both demand and supply of those markets. I believe that the globalization of gas trade will make prices of natural gas to converge and thus we will witness a more "unified" price regime in the not-too-distant future. Predictions of the future supply of petroleum have typically been far less accurate than predictions of demand. Flawed predictions have caused public bewilderment, distrust and, more importantly, government inaction or poorly conceived reactions. The cause of every energy crisis, like oil climbing to $150 per barrel in 2008 before dropping to $40, is above the ground geopolitics and never behind the valve issues.
This paper applies basic economic principles to assess the effects of present-day geopolitical forces on energy markets, particularly those of natural gas, around the globe arriving on a number of interesting conclusions. Topics touched include Chinese urbanization, United States LNG exports, Keystone XL Pipeline, Russian nationalization over its energy industry and its relationship with former Soviet Union countries.