The Trajectory of Shale Gas

North American technology, European goals

Chris Hopkins, Vice President of shale gas at Schlumberger told those in attendance at the European Unconventional Gas Summit Paris 2011 that he’d been involved with shale gas throughout the entire journey at the beginning of his speech entitled Shale Gas: the Role of technology worldwide.

He recalled, “25 years ago when I started my career, I never expected to be in Paris talking about shale gas. 10 years ago, even five years ago, I would’ve thought ‘no way."

“Through technology developments it won’t look like it looks today,” contended Hopkins. “I don’t have all the answers, but I hope you find what I have to say interesting.

He went on to show how shales had transformed the US gas industry, showing maps of shale basins there, and the contrast in activity between 2000 to 2010. “It’s not stopping there. It just continues as people try new shales, new ideas. They’re actually making gas. We have ample gas and continue to develop more,” explained Hopkins.

“There’s a cycle for development just like for conventionals,” he said, showing a slide entitled “Integrating exploration to production: explore, appraise, drill, complete, produce.”

Hopkins explained, “It’s still all about the lifecycle. In the U.S., technology has enabled the lowering of the break-even price. There was a reduction in the breakeven cost in the Barnett, where it all started.’

He spoke of the technologies for shale development that enabled a potential understanding of what the resource was. “From a reservoir quality and completion quality standpoint, what are the properties of the rock, the frackability?” he asked. “Core is extremely important, so you have to look at the rock itself.”

“Then you get to efficiency, but that understanding has to come upfront.”

Hopkins listed understanding reservoir & completion quality, and the integration of data at all scales. “You must integrate logs, petrology, geomechanics, fluid sensitivity and fracture conductivity to help target the sweet spots,” he said.

In recalling the optimization of drilling efficiency at the Eagle Ford shale, he talked about Schlumbergers’ PowerDrive Archer system (“build + lateral”), telling, “You can get to the reservoir as quickly as you can, giving you increased reservoir exposure.”

In terms of shale gas in Poland, he mentioned the activity of Lane Energy, together with ConocoPhillips.

“This is the way it’s going to look in Europe,” he explained, “where we will take care of environmental considerations and do it properly. Even in Poland they’re taking advantage of the technologies and vastly beating their expected curves.”

“What does future look like?” asked Hopkins “I believe it’s not going to look anything like it looks today as technology drives it forward. There’s still a lot of technology being applied to ensure it becomes a sustainable development.”

He said that in North America drilling operations were increasing asset productivity (through identifying sweet spots and lateral measurements), operational efficiency (via multistage completions, pads) and flow efficiency (through engineered conductivity).

According to Hopkins, across the world the lack of well data was being alleviated through things like modelling seismic and core, while a reduction of drilling and completion costs was also occurring. Due to horizontal wells and pad drilling, footprints were also being minimized.

“We’re going to have to go from the ‘brute force’ approach to utilizing existing geophysical data, and accepting statistical variation in well performance, and compensate by drilling more wells horizontally,” he contended.

In response to a query from the delegates in attendance about the lack of service industry resources for well drilling, Hopkins replied:

“When there’s a need the service industry will be there. It’s been proven in the US or for CBM in Australia. I think the focus should be more on ‘what’s there?’ Were in exploration mode. When activity picks up, we will come. There are ways that we can work together to make that happen.”

In the context of the same session, ION Geophysical’s Brian Horn, Director and Chief Geologist was also a presenter in Paris to speak about Evaluating Resource Plays, developing an integrated solutions toolkit.

He said that evaluating resource plays was kind of like the movie Groundhog Day in which Bill Murray woke up every morning to re live the same day.

“Hopefully we won’t live same day,” said Horn, who queried, “Can we develop the technologies to allow us to consider shales conventional? What tools do we need to leverage in what basins to get the best results?”

He mentioned geochemical analysis like basin modelling. “The other piece getting lot of attention are the well completion technologies: multi stage stimulation and horizontal drilling. It’s part of the toolkit,” he said, adding, “It may work in the Bakken shale but not in the Marcellus.”

“Geophysicists have had it easy but they’re going to have to up their game,” said Horn. “Understanding these reservoirs spatially is difficult because we’re not going to drill for this.”

He added, “Integrated solutions will provide future technological advances in resource plays.”

“The complexity of resource plays requires greater degree of reservoir characterization,” he explained. “If the toolkit has the right solutions, shales will become conventional reserves. The Integration of multiple disciplines will help define what technologies will work in various geologies.”