Chevron Applies Some Unconventional Thinking To Try To Make Shale EOR a Standard Treatment

Abstract

In the shale business, the closest thing now to enhanced oil recovery (EOR) is improved techniques. During an earnings call last November an analyst asked EOG Resources executives about their enhanced completion technique which EOG reported was adding 20% to first-year well production in the Permian. Improved completions have allowed operators to significantly increase early production year after year, but after that, steep declines are a given. Back in 2016, EOG was talking about how it was increasing oil production significantly by injecting millions of cubic feet of gas a day into wells in the Eagle Ford. It triggered an EOR field-testing boom by competitors hoping to match reported reserve increases of “30 to 70%.” In a 2017 JPT story, Deepak Devegowda, a petroleum engineering professor at the University of Oklahoma, said, “This is the name of the game. Everybody is talking about EOR and pumping money into trials of EOR.” Now the only mention of the acronym EOR on EOG’s website is an item in its corporate history timeline for 2016: “We commercialized the first enhanced oil recovery process, or EOR, in shale.” In recent years, reported shale EOR work has been mostly in the form of occasional papers describing production uplift by companies selling ways to increase production by injecting gas or chemicals. EOR effectiveness isn’t the issue, according to Todd Hoffman, a petroleum engineering professor at Montana Tech University who wrote two papers evaluating EOG’s methods cited in two Chevron papers. “The EOG field work showed us that these projects can produce significant additional oil and be economically positive,” he said. The problem is that drilling and fracturing wells delivers “higher economic returns than the EOG-style EOR projects with the huge compressors, high gas rates, and high injection pressures.” Last year in the middle of this EOR drought, Chevron did something different. It delivered two papers revealing a major company-scale effort to find ways to use chemical and gas injections to economically produce more oil. The papers presented at the 2023 Unconventional Resources Technology Conference (URTeC) reported on field tests of surfactants and natural gas injection on Permian Basin wells which delivered sufficiently encouraging results to justify an expanded testing program. (URTeC 3870505 and URTeC 3871386). Chevron described a systematic effort by its corporate technical unit and its Mid-Continent business unit to rethink shale EOR methods based on the unconventional nature of flow through fractured reservoirs and the economic realities in a business where new EOR technology is competing with the profitable status quo. Its methods challenge accepted notions about the role of EOR. In SPE’s disciplines, EOR normally falls under the production topic, “marginal aging fields.” What Chevron tested is better described by the topic, “well interventions.” Rather than looking at these techniques as a way to eke out the last barrels from old wells, the papers describe methods that can be deployed earlier in the life of these short-lived wells.