Technology Implementation to Enhance Reserves Recovery in Mature Fields Requires a New Business Model Between Service Companies and Operators

Abstract

According to worldwide hydrocarbon production statistics, mature fields produce approximately 70 percent of global production. Average recovery rate from these mature fields worldwide is only 35 to 37 percent. The rate is even lower in the U.S.: Of the 609 billion barrels of original oil in place estimated by the U.S. Department of Energy (DOE), 351 billion barrels is thought to be unrecoverable by existing technology. To meet the ever-increasing demand in worldwide hydrocarbon production and avoid energy crisis situations, the oil and gas industry needs to substantially increase recovery factors associated with mature fields. Current business models among operators and service providers have greatly restricted the ability to implement traditional and emerging technologies required to enhance the performance and extend the life of mature fields. During the past decade, the industry has increasingly depended on service providers to develop new technology. Meanwhile, service providers must recoup technology development investments in a relatively short period because of the short-term economic objectives and expectations dictated by the investment community. New oil and gas fields have different economic drivers than mature fields; new field economics often justify the use of new technologies and field-wide engineering projects to maximize production and profit, whereas mature field economics (and current business models) limit technology implementation and focus on single-well solutions. To complicate matters further, both operators and service providers often lack personnel resources to strategically implement full-scale field management programs with the objective of optimizing recovery efficiency. Frequently, one-off remedial treatments are performed without a proper field-wide objective in mind. A new approach can ensure better use of technology in exploiting mature fields. This approach between service provider and operator incorporates a strategy to restructure the service cost basis and better balance risk and reward associated with technology utilization. Introduction - Current Industry Outlook The oil and gas industry is in the midst of a secular change. World energy demands are placing pressures on operators to reduce the gap between energy demand and supply. In the U.S., a very mature oil-producing region, operations are burdened with technical and economic challenges from increasing production decline rates, aging facilities, and environmental issues. Nevertheless, mature fields account for at least 75 percent of total U.S. production. Conventional reservoirs with long producing histories continue to offer one of the greatest potential sources of growth in hydrocarbon production. Petroleum will continue to be a major contributor to meeting the U.S. economy's energy needs as consumption increases - regardless of energy efficiency improvements and alternative energy sources (Figure 1).