Tight oil

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For another use of the term "shale oil", meaning synthetic crude oil derived from oil shale, see shale oil .

Tight oil (also known as shale oil, shale-hosted oil or light tight oil, abbreviated LTO) is light crude oil contained in petroleum-bearing formations of low permeability, often shale or tight sandstone. [1] Economic production from tight oil formations requires the same hydraulic fracturing and often uses the same horizontal well technology used in the production of shale gas. While sometimes called "shale oil", tight oil should not be confused with oil shale, which is shale rich in kerogen, or shale oil, which is oil produced from oil shales. [2] [3] [4] Therefore, the International Energy Agency recommends using the term "light tight oil" for oil produced from shales or other very low permeability formations, while the World Energy Resources 2013 report by the World Energy Council uses the terms "tight oil" and "shale-hosted oil". [3] [5]

Contents

Shown are conceptual illustrations of types of oil and gas wells. A vertical well is producing from a conventional oil and gas deposit (right). Also shown are wells producing from unconventional formations: a vertical coalbed methane well (second from right); a horizontal well producing from a shale formation (center); and a well producing from a tight sand formation (left). Schematic cross-section of general types of oil and gas resources and the orientations of production wells used in hydraulic fracturing.jpg
Shown are conceptual illustrations of types of oil and gas wells. A vertical well is producing from a conventional oil and gas deposit (right). Also shown are wells producing from unconventional formations: a vertical coalbed methane well (second from right); a horizontal well producing from a shale formation (center); and a well producing from a tight sand formation (left).

In May 2013 the International Energy Agency in its Medium-Term Oil Market Report (MTOMR) said that the North American oil production surge led by unconventional oils - US light tight oil (LTO) and Canadian oil sands - had produced a global supply shock that would reshape the way oil is transported, stored, refined and marketed. [6]

Inventory and examples

Tight oil formations include the Bakken Shale, the Niobrara Formation, Barnett Shale, and the Eagle Ford Shale in the United States, R'Mah Formation in Syria, Sargelu Formation in the northern Persian Gulf region, Athel Formation in Oman, Bazhenov Formation and Achimov Formation of West Siberia in Russia, Arckaringa Basin in Australia, Chicontepec Formation in Mexico, [1] and the Vaca Muerta oil field in Argentina. [7] In June 2013 the U.S. Energy Information Administration published a global inventory of estimated recoverable tight oil and tight gas resources in shale formations, "Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States." The inventory is incomplete due to exclusion of tight oil and gas from sources other than shale such as sandstone or carbonates, formations underlying the large oil fields located in the Middle East and the Caspian region, off shore formations, or about which there is little information. Amounts include only high quality prospects which are likely to be developed. [8]

In 2012, at least 4,000 new producing shale oil (tight oil) wells were brought online in the United States. By comparison, the number of new producing oil and gas wells (both conventional and unconventional) completed in 2012 globally outside the United States and Canada is less than 4,000. [9]

Characteristics

Tight oil shale formations are heterogeneous and vary widely over relatively short distances. Tight oil reservoirs subjected to fracking can be divided into four different groups. [10] Type I has little matrix porosity and permeability – leading to fractures dominating both storage capacity and fluid flow pathways. Type II has low matrix porosity and permeability, but here the matrix provides storage capacity while fractures provide fluid-flow paths. Type III are microporous reservoirs with high matrix porosity but low matrix permeability, thus giving induced fractures dominance in fluid-flow paths. Type IV is macroporous reservoirs with high matrix porosity and permeability, thus the matrix provides both storage capacity and flow paths while fractures only enhance permeability.

Even in a single horizontal drill hole, the amount recovered may vary, as may recovery within a field or even between adjacent wells. This makes evaluation of plays and decisions regarding the profitability of wells on a particular lease difficult. Production of oil from tight formations requires at least 15 to 20 percent natural gas in the reservoir pore space to drive the oil toward the borehole; tight reservoirs which contain only oil cannot be economically produced. [8] Formations which formed under marine conditions contain less clay and are more brittle, and thus more suitable for fracking than formations formed in fresh water which may contain more clay. [ dubious ] Formations with more quartz and carbonate are more brittle. [8]

The natural gas and other volatiles in LTO make it more hazardous to handle, store, and transport. This was an aggravating factor in the series of fatal explosions after the Lac-Mégantic derailment.

Exploitation

Prerequisites for exploitation include being able to obtain rights to drill, easier in the United States and Canada where private owners of subsurface rights are motivated to enter into leases; the availability of expertise and financing, easier in the United States and Canada where there are many independent operators and supporting contractors with critical expertise and suitable drilling rigs; infrastructure to gather and transport oil; and water resources for use in hydraulic fracturing. [8]

Analysts expect that $150 billion will be spent on further developing North American tight oil fields in 2015.[ needs update ] The large increase in tight oil production is one of the reasons behind the price drop in late 2014. [11]

Outside the United States and Canada, development of shale oil (tight oil) resources may be limited by the lack of available drilling rigs: 2/3 of the world's active drill rigs are in the US and Canada, and rigs elsewhere are less likely to be equipped for horizontal drilling. Drilling intensity may be another constraint, as tight-oil development requires far more completed wells than does conventional oil. Leonardo Maugeri considers this will be "an insurmountable environmental hurdle in Europe". [9]

Detailed studies on production behaviour in prolific shale plays were light tight oil is produced have shown that the average monthly initial production of a tight oil well is around 500 barrels/day, which yields an estimated ultimate recovery in the range 150-290 thousand barrels. [12] As a consequence, exploitation of tight oil tends to be drilling intensive with many new wells needed to ramp up and maintain production over time.

Size of tight oil resources

US EIA estimated technically recoverable tight oil in shale

Following are estimates of technically recoverable volumes of tight oil associated with shale formations, made by the US Energy Information Administration in 2013. Not all oil which is technically recoverable may be economically recoverable at current or anticipated prices.

  1. Kingdom of Bahrain: 80 billion barrels [13]
  2. Russia: 75 billion barrels
  3. United States: 78 billion barrels
  4. China: 32 billion barrels
  5. Argentina: 27 billion barrels
  6. Libya: 26 billion barrels
  7. Venezuela: 13 billion barrels
  8. Mexico: 13 billion barrels
  9. Pakistan: 9 billion barrels
  10. Canada: 9 billion barrels
  11. Indonesia: 8 billion barrels

World Total: 335 to 345 billion barrels [8]

Other estimates

Australia: A private oil company announced in 2013 that it had discovered tight oil in shale of the Arckaringa Basin, estimated at 3.5 to 223 billion barrels. [14]

Production

In September 2018, the U.S. Energy Information Administration projected October tight oil production in the U.S. at 7.6 million barrels per day. [15]

The volume of oil production on tight oil formations in the US depends significantly on the dynamics of the WTI oil price. About six months after the price change, drilling activity changes, and with it the volume of production. These changes and their expectations are so significant that they themselves affect the price of oil and hence the volume of production in the future. These regularities are described in mathematical language by a differential extraction equation with a retarded argument. [16]


Tight oil differs from conventional oil, as both investment and production dynamics of tight oil is significantly faster than conventional counterparts. This may reduce risks associated with locked-in capital and also contributed to a more flexible production that reduces oil price volatility. [17] Unexpectedly, this faster dynamics can also entail lesser carbon lock-in effects and stranded asset risks with implications for climate policies. [18]

See also

Related Research Articles

Hydrocarbon exploration

Hydrocarbon exploration is the search by petroleum geologists and geophysicists for deposits of hydrocarbons, particularly petroleum and natural gas, in the Earth using petroleum geology.

Coalbed methane Form of natural gas extracted from coal beds

Coalbed methane, coalbed gas, coal seam gas (CSG), or coal-mine methane (CMM) is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, Australia, and other countries.

Peak oil Time when the maximum rate of petroleum extraction is reached

Peak oil is the year when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline. As of 2021, peak oil forecasts range from 2019 to 2040, depending on economics and how governments respond to global warming. It is often confused with oil depletion; however, whereas depletion refers to a period of falling reserves and supply, peak oil refers to the point of maximum production. The concept of peak oil is often credited to geologist M. King Hubbert whose 1956 paper first presented a formal theory. Peak coal was in 2013 and peak oil is forecast to occur before peak gas.

Unconventional oil is petroleum produced or extracted using techniques other than the conventional method. Industry and governments across the globe are investing in unconventional oil sources due to the increasing scarcity of conventional oil reserves. Unconventional oil and gas have already made a dent in international energy linkages by reducing US energy import dependency.

Barnett Shale Geological formation in Texas, United States

The Barnett Shale is a geological formation located in the Bend Arch-Fort Worth Basin. It consists of sedimentary rocks dating from the Mississippian period in Texas. The formation underlies the city of Fort Worth and underlies 5,000 mi² (13,000 km²) and at least 17 counties.

Petroleum reservoir Subsurface pool of hydrocarbons

A petroleum reservoir or oil and gas reservoir is a subsurface pool of hydrocarbons contained in porous or fractured rock formations. Petroleum reservoirs are broadly classified as conventional and unconventional reservoirs. In conventional reservoirs, the naturally occurring hydrocarbons, such as crude oil or natural gas, are trapped by overlying rock formations with lower permeability, while in unconventional reservoirs, the rocks have high porosity and low permeability, which keeps the hydrocarbons trapped in place, therefore not requiring a cap rock. Reservoirs are found using hydrocarbon exploration methods.

A petroleum geologist is an earth scientist who works in the field of petroleum geology, which involves all aspects of oil discovery and production. Petroleum geologists are usually linked to the actual discovery of oil and the identification of possible oil deposits, gas caps, or leads. It can be a very labor-intensive task involving several different fields of science and elaborate equipment. Petroleum geologists look at the structural and sedimentary aspects of the stratum/strata to identify possible oil traps or tight shale plays.

Shale gas

Shale gas is natural gas that is found trapped within shale formations. Shale gas has become an increasingly important source of natural gas in the United States since the start of this century, and interest has spread to potential gas shales in the rest of the world. In 2000 shale gas provided only 1% of U.S. natural gas production; by 2010 it was over 20% and the U.S. government's Energy Information Administration predicts that by 2035, 46% of the United States' natural gas supply will come from shale gas.

Piceance Basin

The Piceance Basin is a geologic structural basin in northwestern Colorado, in the United States. It includes geologic formations from Cambrian to Holocene in age, but the thickest section is made up of rocks from the Cretaceous Period. The basin contains reserves of coal, natural gas, and oil shale. The name likely derives from the Shoshoni word /piasonittsi/ meaning “tall grass”.

Well stimulation

Well stimulation is a well intervention performed on an oil or gas well to increase production by improving the flow of hydrocarbons from the reservoir into the well bore. It may be done using a well stimulator structure or using off shore ships / drilling vessels, also known as "Well stimulation vessels".

Bakken Formation Geological rock formation known for crude oil production

The Bakken Formation is a rock unit from the Late Devonian to Early Mississippian age occupying about 200,000 square miles (520,000 km2) of the subsurface of the Williston Basin, underlying parts of Montana, North Dakota, Saskatchewan and Manitoba. The formation was initially described by geologist J.W. Nordquist in 1953. The formation is entirely in the subsurface, and has no surface outcrop. It is named after Henry Bakken, a farmer in Tioga, North Dakota, who owned the land where the formation was initially discovered while drilling for oil.

Bend Arch–Fort Worth Basin

The Bend Arch–Fort Worth Basin Province is a major petroleum producing geological system which is primarily located in North Central Texas and southwestern Oklahoma. It is officially designated by the United States Geological Survey (USGS) as Province 045 and classified as the Barnett-Paleozoic Total Petroleum System (TPS).

Monterey Formation

The Monterey Formation is an extensive Miocene oil-rich geological sedimentary formation in California, with outcrops of the formation in parts of the California Coast Ranges, Peninsular Ranges, and on some of California's off-shore islands. The type locality is near the city of Monterey, California. The Monterey Formation is the major source-rock for 37 to 38 billion barrels of oil in conventional traps such as sandstones. This is most of California's known oil resources. The Monterey has been extensively investigated and mapped for petroleum potential, and is of major importance for understanding the complex geological history of California. Its rocks are mostly highly siliceous strata that vary greatly in composition, stratigraphy, and tectono-stratigraphic history.

Oil reserves in the United States Oil reserves located in the USA

Proven oil reserves in the United States were 43.8 billion barrels of crude oil as of the end of 2018, excluding the Strategic Petroleum Reserve. The 2018 reserves represent the largest US proven reserves since 1972. The Energy Information Administration estimates US undiscovered, technically recoverable oil resources to be an additional 198 billion barrels.

Montney Formation

The Montney Formation is a stratigraphical unit of Lower Triassic age in the Western Canadian Sedimentary Basin in British Columbia and Alberta.

Tight gas Natural gas produced from reservoir rocks

Tight gas is natural gas produced from reservoir rocks with such low permeability that massive hydraulic fracturing is necessary to produce the well at economic rates. This natural gas is trapped within rocks with very low permeability, in other words, they are sealed in very impermeable and hard rocks, making their formation "tight". These impermeable reservoirs which produce dry natural gas are also called "Tight Sand". Tight gas reservoirs are generally defined as having less than 0.1 millidarcy (mD) matrix permeability and less than ten percent matrix porosity. Although shales have low permeability and low effective porosity, shale gas is usually considered separate from tight gas, which is contained most commonly in sandstone, but sometimes in limestone. Tight gas is considered an unconventional source of natural gas. But they are much older than the Conventional gas. Tight gas was formed 248 million years ago in Paleozoic formations. Cementation and recrystallization changed a conventional gas reserve which reduced the permeability of the rock and natural gas was trapped within these rock formations. Horizontal and directional drilling is used to extract tight gas deposits as they run along the formation which in turn allows more natural gas to enter the well that was dug. Numerous wells can be drilled to access the gas. Hydraulic fracturing is one of the main methods to access the gas which requires breaking apart the rocks in the formation by pumping fracking fluids in to the wells. This increases permeability and allows gas to flow easily, feeing it from the trap. After that deliquifaction is used to help in the extraction.

Hydraulic fracturing Well stimulation technique in which rock is fractured by a hydraulically pressurized liquid

Hydraulic fracturing, also called fracking, fracing, hydrofracking, fraccing, frac'ing, and hydrofracturing, is a well stimulation technique involving the fracturing of bedrock formations by a pressurized liquid. The process involves the high-pressure injection of "fracking fluid" into a wellbore to create cracks in the deep-rock formations through which natural gas, petroleum, and brine will flow more freely. When the hydraulic pressure is removed from the well, small grains of hydraulic fracturing proppants hold the fractures open.

As of 2013 the Cline Shale, also referred to as the "Wolfcamp/Cline Shale", the "Lower Wolfcamp Shale", or the "Spraberry-Wolfcamp shale", or even the "Wolfberry", is a promising Pennsylvanian oil play east of Midland, Texas which underlies ten counties: Fisher, Nolan, Sterling, Coke, Glasscock, Tom Green, Howard, Mitchell, Borden and Scurry counties. Exploitation is projected to rely on hydraulic fracturing.

an organic rich shale, with Total Organic Content (TOC) of 1-8%, with silt and sand beds mixed in. It lies in a broad shelf, with minimal relief and has nice light oil of 38-42 gravity with excellent porosity of 6-12% in thickness varying 200 to 550 feet thick.

Wattenberg Gas Field

The Wattenberg Gas Field is a large producing area of natural gas and condensate in the Denver Basin of central Colorado, USA. Discovered in 1970, the field was one of the first places where massive hydraulic fracturing was performed routinely and successfully on thousands of wells. The field now covers more than 2,000 square miles between the cities of Denver and Greeley, and includes more than 23,000 wells producing from a number of Cretaceous formations. The bulk of the field is in Weld County, but it extends into Adams, Boulder, Broomfield, Denver, and Larimer Counties.

Hydraulic fracturing in Canada

Hydraulic fracturing in Canada was first used in Alberta in 1953 to extract hydrocarbons from the giant Pembina oil field, the biggest conventional oil field in Alberta, which would have produced very little oil without fracturing. Since then, over 170,000 oil and gas wells have been fractured in Western Canada. Hydraulic fracturing is a process that stimulates natural gas or oil in wellbores to flow more easily by subjecting hydrocarbon reservoirs to pressure through the injection of fluids or gas at depth causing the rock to fracture or to widen existing cracks. New hydrocarbon production areas have been opened as hydraulic fracturing stimulating techniques are coupled with more recent advances in horizontal drilling. Complex wells that are many hundreds or thousands of metres below ground are extended even further through drilling of horizontal or directional sections. Massive fracturing has been widely used in Alberta since the late 1970s to recover gas from low-permeability sandstones such as the Spirit River Formation. The productivity of wells in the Cardium, Duvernay, and Viking formations in Alberta, Bakken formation in Saskatchewan, Montney and Horn River formations in British Columbia would not be possible without hydraulic fracturing technology. Hydraulic fracturing has revitalized legacy oilfields. "Hydraulic fracturing of horizontal wells in unconventional shale, silt and tight sand reservoirs unlocks gas, oil and liquids production that until recently was not considered possible." Conventional oil production in Canada was on a decrease since about 2004 but this changed with the increased production from these formations using hydraulic fracturing. Hydraulic fracturing is one of the primary technologies employed to extract shale gas or tight gas from unconventional reservoirs.

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