Peak Oil News: Technology lifts productivity of old oil fields

Tuesday, March 06, 2007

Technology lifts productivity of old oil fields

International Herald Tribune

By Jad Mouawad

The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressure steam to pump out more oil. The field, whose production slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels.

In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, lifting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s.

And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use three-dimensional imaging of the underground field and the injection of a gas — in Means, carbon dioxide — to flush out the oil.

Within the last decade, advances in technology have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil left in familiar locations, forecasts that the world's reserves are drying out have given way to predictions that more oil can be found than ever before.

In a wide-ranging study published in 2000, the U.S. Geological Survey estimated that ultimately recoverable resources of conventional oil totaled about 3.3 trillion barrels, of which a third has since been produced. More recently, Cambridge Energy Research Associates, a multinational energy consultancy, estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate, which Cambridge Energy says is likely to grow, reflects how new technology can tap into more resources.

"It's the fifth time to my count that we've gone through a period when it seemed the end of oil was near, and people were talking about the exhaustion of resources," said Daniel Yergin, chairman of Cambridge Energy and the author of a Pulitzer Prize-winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. "Back then we were going to fly off the oil mountain. Instead we had a boom, and oil went to $10 instead of $100."

There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading. Then there is the growing voice of environmentalists, who do not think that pumping and consuming an ever-increasing amount of fossil fuel is in any way desirable.

Increased projections for how much oil is extractable may become a political topic on many different fronts and in unpredictable ways. By reassuring the public that supplies will meet future demands, oil companies may also find legislators more reluctant to opening Alaska and other areas to exploration.

On a global level, the Organization of the Petroleum Exporting Countries, which has coalesced around a price of $50 a barrel for oil, will likely see its clout reinforced in coming years. The 12-country cartel, which added Angola as its newest member this year, is poised to control more than 50 percent of the oil market in coming years, up from 35 percent today, as Western oil production declines.

The oil industry is well known for seeking out sources of fossil fuel in far- flung places, from the icy plains of Siberia to the deep waters off West Africa. But now the quest for new discoveries is taking place alongside a much less exotic search that is crucial to energy supplies. Oil companies are returning to old or mature fields partly because there are few virgin places left to explore, and, of those, few are open to investors.

Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak — if it has not already — and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline.

"I am very, very seriously worried about the future we are facing," said Kjell Aleklett, president of the Association for the Study of Peak Oil and Gas, based in Uppsala, Sweden. "It is clear that oil is in limited supplies."

Many oil executives say that these so- called peak-oil theorists fail to take into account the way that sophisticated technology, combined with higher prices that make searches for new oil more affordable, are opening up opportunities to develop supplies. As the industry improves its ability to draw new life from old wells and expands its forays into ever-deeper corners of the globe, it is providing a strong rebuttal in the long- running debate over when the world might run out of oil.

Typically, oil companies can produce only one barrel for every three they find. Two usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so.

Going after these neglected resources, energy experts say, represents a tremendous opportunity.

"Ironically, most of the oil we will discover is from oil we've already found," said Lawrence Goldstein of the Energy Policy Research Foundation, an industry-funded group. "What has been missing is the technology and the threshold price that will lead to a revolution in lifting that oil."


At 7:30 AM, March 07, 2007, Anonymous Anonymous said...

Ah, the ever-glowing review of State-controlled news, going about its regular business of disinformation and damage control, and CERA waiting in the wings, hoping against hope that a vague technology revolution (what precisely they don't know or care) will swoop in and save the day.

At 1:00 PM, March 07, 2007, Anonymous Anonymous said...

Oh, gosh, guys! No comments yet? Is the world *not really* running out of oil? Goodness, I remember going to an energy conference in 1977 in which learned people explained that oil would be $100 per barrel by 1990, and by 2000 it would be all gone...looks like we're going to have to wait quite a few more years.

On to the next crisis!


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