When Gerald Schotman, Shell’s chief technology officer, looks at the unconventional oil and gas business, he sees so many young technologies and “from the perspective a chief technology officer, that is such an opportunity.”
Shell’s list of promising areas for research and development is broad, ranging from creating cheaper, more effective sensors for seismic testing to a new generation of specialized, automated drilling rigs.
The goal is always “change that creates value.” In natural gas the rewards can be broken down three ways: produce more gas per well now, bring down the costs per well, and reduce the footprint when doing so.
The footprint can be defined in many ways: the size of the pads used for drilling multiple wells; the level of emissions; the water used; and the many ways exploration and production can touch the people and the environment, near and far.
The long list of things to do represents large investments of money and time, which Schotman says could be rewarding in multiple ways.
“As it happens, some of the research helps two or three goals at a time,” Schotman said in an interview. Often with “the gas agenda a nice thing is you do not have to trade off.”
A continuously better understanding of why specific fractures are more effective than others could lead to hydraulic fracturing methods using less water and sand, saving money, producing more, and reducing the footprint.
There is a wide range of research to respond to “the things where we can find new approaches for these plays.”
Enhanced seismic imaging is a priority because many of the growth areas are in tight, poorly understood rocks onshore, such as shale and coalbeds. Laboratory studies are needed to observe how reservoir rocks interact with hydrocarbon molecules on a micro-
scopic scale.
The goal is to learn: “How is Mother Earth organized to release these molecules, and what is the most low-energy way to get it into the wells?” he said.
Rethinking Exploration
Unconventional formations demand unconventional approaches.
“You have to get back to the fundamentals to make it a business,” Schotman said. “With these types of plays there are specific cost challenges…. There are things that do not work well for these plays.”
The reasons are many and the rocks are complex, but generally unconventional formations require more inputs for less output than conventional formations.
In Australia, for example, mass production of wells is required to extract methane from expansive coal deposits. These sort of environments led Shell to a partnership with China National Petroleum Corporation to create a “well-manufacturing system.” “Drilling technologies that are far more efficient have to be applied to more and more wells—hundreds and thousands of wells to develop some fields,” Schotman said.
The idea is combining rigs with automated drilling functions. The goal is to reduce staffing in remote areas by building a family of machines using standardized designs. Creating separate units for specific drilling and completion tasks should mean simpler machines.
One rig will be able to drill just the top section of a well with a small crew on hand and remote monitoring, then other specialized units will come along to drill farther and complete the wells. “The first rigs are expected in 2013,” he said.
Another departure is the plastic pipes needed to drain the water from the fields to allow the gas flow. Plastic pipes could offer a flexible, cost-effective response to the needs of mining companies that do not want to be hacking through metal pipes when it is time to produce the coal. Gas producers need to be sure they can put together pipes that perform as well as steel. Shell uses the so-called reinforced thermoplastic pipes for crude-oil flowlines and water injection. And, they could find their way into coalbed methane operations. “The name of the game is to change the way you think of welding. The way you combine pipes is cutting and sticking,” he said.
Too Much Information?
Increased data gathering is an essential step toward finding more predictable ways to identify sweet spots in difficult formations and get as much gas as possible out of them.
“There is a lot of data coming from the fiber optics we use in wells,” Schotman said. “For example, with fiber optics and a technology called distributed acoustic sensing, we have more advanced monitoring capabilities that inform us on fracturing effectiveness. So, it is possible to carry out more precisely tuned treatments using real-time information.”
Likewise, Shell’s data gathering during fracturing has provided a more detailed picture of the large number of fractures that produce little or nothing.
It is also gathering data and supporting research partnerships to better understand how the force of drilling and fracturing can change stress patterns in the ground in ways that could hinder production.
Those studies are part of Shell’s multipronged research push to better understand how well completions interact with natural features, such as fracture networks, to determine how much gas and oil will flow out of a formation.
The goal is to do more with less force. “The thinking has been that more is better,” Schotman said. “That may be true sometimes, but surely not always. We want to achieve significantly more with less. There are environmental as well as cost benefits.”
Shell and others working in this field are also pushing the limits of data gathering and processing. Creating systems to monitor large fields with wells wired with fiber-optic cable capable of monitoring temperature, sound, and even stress will move the data-management frontier from terabytes a day (1 trillion bytes of data) to petabytes (1,000 terabytes), he said.
That has spawned work with partners in academia and industry in real-time processing, so those monitoring a well with visual displays highlighting potentially significant information in real time and editing programs are able to weed out anomalies that might offer telling evidence from the pile of what is not likely to be worth the cost of storing.
Other People’s Technology
Getting more out of unconventional reservoirs will require getting better data out of seismic imaging to determine rock properties.
“In general I would say seismic onshore has never been able to live up to the same standard as seismic offshore,” he said. “Now we are finding ways for onshore to make up for that.”
Two ways of reaching that goal are to have more sensitive sensors to pick up the echoes used for seismic, and putting many more of these ‘ears’ on the ground, he said.
A joint venture between Shell and Hewlett-Packard (HP) is aimed at both those goals. At the heart of the device is an HP Mems sensor, which is about the size of a fingertip, inside a cube about the size of the palm of a hand. The wireless, low-cost unit is designed to make it possible to deploy a lot more sensors and also to place them in difficult terrain off limits to wired arrays.
“It combines lightweight and wireless capability and ultimately the vision is 1 million channels, compared to 20,000 to 50,000 now, or more sophisticated 150,000 channels these days,” Schotman said. The new device can also detect lower frequencies that older geophones cannot.
It Depends on the Processing
Some natural gas opportunities depend on advances in downstream technology.
For example, Shell is exploring the feasibility of projects to add value to its gas production, by using it to make chemicals in western Pennsylvania and liquid fuels on the US Gulf Coast. In both cases the locales offer access to a rich supply of gas and the skilled workers and infrastructure needed to support these ventures.
Shell is also working on building the facilities needed to liquefy and ship gas in remote places where infrastructure is lacking.
It is constructing the world’s first offshore facility to liquefy natural gas, which will allow it to develop the Prelude field in the Browse Basin off Western Australia.
The fact that putting liquefied-natural-gas (LNG) processing equipment on the world’s largest offshore facility is a cost-effective solution for developing offshore fields explains why Shell and others are considering more floating LNG (FLNG) facilities. Multiple FLNG units could be a better option in a large field, or be the only option for a cluster of small fields in a remote area.
One of Shell’s goals is to develop FLNG units that can be used to develop gas from fields that are now economically off limits, such as gas fields with low liquids content, which limits the potential revenue making it hard to profitably develop certain fields.
“The reason for the size of the roughly 500-m-long Prelude FLNG facility is not only the kit on it,” Schotman said. “The size of the facility increases its stability. Safety of the FLNG facility has been paramount during its design, and its safety is expected to be on par with modern offshore oil and gas facilities.”
