Innovative Study Aims To Reduce Costs Of Shale Oil Extraction

Credit: Oil Price. com

Russian firm Skoltech’s research shows nanoparticles and surfactants can trap oil underground instead of aiding recovery. Brine as effective as costly surfactants in EOR. U.S. shale industry finds cost relief post-pandemic inflation.

Shale Revolution and Energy Markets

The U.S. shale revolution has profoundly reshaped global energy markets. The shale boom, commencing in 2008 and culminating in the Permian’s surpassing of Saudi Arabia’s Ghawar as the top oilfield, stands out as an impressive growth story.

Chemical Enhanced Oil Recovery (EOR) methods have evolved due to dwindling conventional oil reserves and surging global energy demand. Among these methods, surfactant flooding is prominent, leveraging multiple mechanisms like interfacial tension reduction, wettability alteration, foam generation, and emulsification.

The researchers ran a numerical simulation and two complex lab experiments on oil shale samples to determine the effectiveness of injecting water solutions containing silicon dioxide nanoparticles or a surfactant into shale oil reservoirs to enhance recovery.

Increased Crude Output

“Our study considered 13 fluids and two were selected for tests on cylinder-shaped samples of oil-saturated rock from the Bazhenov Formation of Western Siberia. First we injected brine–water with a very high salt content–and measured an oil recovery factor of about 53%. This is roughly analogous to being able to extract about half of the oil in the reservoir. That figure served as the baseline value for assessing the efficiency of the two agents in the experiment, although the value under actual reservoir conditions would be lower,” the researchers have said.

Exxon Mobil Corp. (NYSE:XOM) Chief Executive Officer Darren Woods recently revealed that shale producers can double crude output from their existing wells by employing novel fracking technologies.

There’s just a lot of oil being left in the ground. Fracking’s been around for a really long time, but the science of fracking is not well understood, Exxon Chief Executive Officer Darren Woods said Thursday at the Bernstein Strategic Decisions conference.

Declining Shale Costs

  • Post-pandemic inflation led to years of increasing production costs.
  • A positive shift occurred as production costs dropped by 1% YoY in Q2.
  • First cost reduction in three years.
  • Drill pipe prices halved, daily rig rates decreased over 10%, steel and diesel costs also lowered.
  • According to Goldman Sachs via Bloomberg, Drill pipe prices have fallen by 50% this year; daily rig rates are down by more than 10% while the costs of diesel and steel have been gradually declining. Only labor has been defying this trend as wages continue rising.
  • Whereas a decline of a single percentage point might not make much of a difference on the bottomline, Goldman says costs will be 10% lower in 2024, enough to boost profits and cash flows significantly.

Exxon Mobil Corp. (NYSE:XOM) has reported Q2 earnings of $7.88B, good for 55.9% Y/Y decrease while Q2 revenue of $82.91B is good for -28.3% Y/Y growth.

Exxon says it remains on track to deliver $9 billion of structural cost savings by the end of 2023 relative to 2019, having achieved cumulative structural cost savings of $8.3 billion to date.

Exxon reported that Q2 total production fell 3.3% Y/Y to 3.61M boe/day; however, excluding divestments, entitlements, government mandates and the Sakhalin-1 expropriation by Moscow, net production actually rose by more than 160K boe/day.

The Permian basin delivered a quarterly record 622K boe/day and is on track to increase 10% this year while Guyana is on track to grow production 5% to 400K boe/day by year-end.

Chevron Corp. reported that its Q2 earnings decreased 48.3% Y/Y to $6.01B while adjusted earnings contracted 49.2% to $5.78B. Meanwhile, Q2 revenue clocked in at $48.9B, good for -28.9% Y/Y growth. Chevron reported record Permian Basin production of 772,000 barrels of oil equivalent per day, up 11% Y/Y.

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