Status of Research and Development in the Oil Industry

Abstract

Introduction R and D subjects in petroleum industry are numerous and diverse. We look at formations with Scanning Electron Microscopes and satellites. In order to trace hydrocarbons, we measure almost every physical and mechanical property of the rock; from its radioactivity and electrical resistivity, to magnetic properties. We measure fluid pressure to an accuracy of 0.01 psi. We can do well testing based on moon tides. We draw three-dimensional picture of underground strata based on seismic data. We launch and install offshore platforms which cost millions of dollars, weigh thousands of tons. We drill holes miles deep into very hot formations, and produce from them. We can transport fluid hundreds of miles on sea floors, thousands of miles on giant tankers across oceans, and then refine it to a final product usable by the public. And yet, we cannot answer some very basic questions: Where in a reservoir should we drill, how to anticipate the mechanical condition of the formation we will drill into, what are the relative permeabilities of the formation to its fluids, how to determine when we have a good cement bond, how to determine the size and direction of hydraulic fractures, how to prevent water coning, how to prevent damage caused by formation fluid itself, etc. While we have made giant strides in modeling and processing data through computers, we often do not have the very basic properties needed to fully take advantage of them. There are many technical disciplines involved in oil and gas exploration and production. We employ almost all engineering disciplines, as well as draw on achievements of other industries. In such an environment, it is difficult to identify why R and D is vital to the petroleum industry. Any strategy of R and D has to recognize an important element; people. Although people are the most valuable asset of every part of mi organization, R and D accomplishments and value is substantially dependent upon the qualifications of those performing the work. Most R and D functions require people with high level of education and specialized training, disciplined in a methodical and logical approach to problems. Yet breakthroughs are often results of unorthodox thinking, the creative ingredient of a human brain which goes beyond what is normal and expected. It takes a long time to build an effective R and D which is familiar with business and technical requirements of an organization and capable of providing it with workable solutions. R and D goals and objectives are also usually long term. It is very difficult to determine the financial effectiveness of most research; how much it will eventually cost and how much it will contribute to the total revenue. The motivating force behind R and D funding is past performance and future promise. The goal is to anticipate and resolve future problems; whether it is simply providing better and more efficient technology, or ploughing into unchartered grounds in hope of a breakthrough. The combination of all these factors leads one to conclude that the funding of an R and D department should depend on the longer term picture for the company. While it is fully recognized that many elements contribute to the objective of oil and gas production, this paper will focus attention on areas which are directly connected to petroleum exploration and production. Three aspects of R and D are discussed; who funds it, who does it and what are some of the ways to f ace the challenge of the future. P. 31^