<DrumBeat: November 19, 2007 The Oil Drum Estimating the World Production Decline Rates from the Megaproject Forecasts>

81 comments on Is the Decline of Base Production Accelerating?

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oilmanbob on November 19, 2007 - 2:57pm Permalink | Subthread | Parent | Comments top

Stuart,
the reason that the small fields seem to contribute less is overhead. Small fields in shallow water can be drilled and recompleted with a jack-up drilling rig. When the water is over 500 ft, it requires a drill ship and a floating production platform which is much more expensive. I'm not sure about the break for the water depth, it may be shallower but I do know the drill ships are a lot more expensive.

That's the reason that the horizontal wells have such a quick collapse, too. Because they are in areas like the North Sea which require much heavier engineering than a tropical sea, the operators can't operate low volume wells. Onshore in places like the Giddings field, a horizontal well can make money with a 5 barrel a day well but in an offshore field a fifty barrel day well may be uneconomic. Its BS to say it makes them colapse quicker for a horizontal, the real reason is the overhead. Multinationals also have a lot higher company overhead than Devon or Apache in shallow water, or Anadarko in the Austin Chalk.
Bob Ebersole

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memmel on November 19, 2007 - 3:46pm Permalink | Subthread | Parent | Comments top

But the overall contribution of these low flow rates are small so who cares about the economics of 5 vs 50 barrel a day wells. What I think your missing is once you drill a horizontal well the opportunities for rework are small. They are very efficient and basically give a square production profile. The key is that production profiles from horizontal drilling are quit different from traditional approaches and at the end of the day decline is much steeper. Correct me if I'm wrong but my understanding is that if you produce using horizontals once production collapses you move on with no attempts to work over.

Also another point is that technology does not makes production from deeper offshore regions equivalent to shallow or on shore wells. Its a apples to oranges comparison yet over time more and more of our production has come for deeper and deeper offshore regions.

The net effect is that the amount of oil that can be produced at high production rates has dropped far faster then the production rate and thus we have extracted our easy oil a lot faster over time. The easy high flow rate oil is gone. One reason I don't like URR the bulk of the oil that extractable on the back side would be extracted at a lot lower flow rates compared to the front and the economics esp offshore points towards little of this oil as actually being recovered.

We are facing the collapse of two major sources for oil. Offshore and the giant fields. One because horizontal drilling and conditions makes workovers or low production uneconomic and the second because we have already worked over the giant fields extensively. The total amount of oil remaining may not drop that much over the next few years but it makes sense that production rates will decline fairly steeply.

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oilmanbob on November 19, 2007 - 4:26pm Permalink | Subthread | Parent | Comments top

Good points, memmel, Ill think about them. Horizontal workovers are a lot harder and more expensive, because its hard to get downhole equipment out when its anything other than verticle. They are a lot more likely to get stuck. Also washing sand out can be a very tough problem. I've never done either, thats coffee shop gossip. And when you add in my point about overhead being a lot higher it all is pretty muddled . Bob Ebersole

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peakearl on November 19, 2007 - 5:07pm Permalink | Subthread | Parent | Comments top

I think the collapse of the onshore Yibal field in Oman following horizontal drilling and massive investment by Shell is more consistent with Memmel's argument. Thoughts?

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memmel on November 19, 2007 - 5:57pm Permalink | Subthread | Parent | Comments top

To some extent but I'm asserting that the situation has gotten to the point that whole regions would show production profiles similar to Yibal.

A simple example consider the case that you have one well drilled with old technology and it produces at a constant rate for 30 years and one drilled 15 years later with new technology and it produces at a constant rate for 15 years when you hit the 30 year mark both wells need to be replaced.

Now assume that you manage this and replace with two wells that last only 5 years in five years all production has to be replaced. Real live of course causes this to be staggered but you see that even though you where digging your self into deep trouble production rates remained constant. In effect the treadmill of depletion has been speed up by technology and now we have reached the point that 5 year well lifetimes are not uncommon. This means overall production will effectively collapse since you cannot sustain production rates for any length of time under these conditions.

In any case lets just watch the GOM production if I'm right then we should soon see people talking about unprecedented and unpredicted decline rates. They just are not reading the right blog.

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81 comments on Is the Decline of Base Production Accelerating?

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