E&P Notes A Biotech Answer to a Driller’s Problem Stephen Rassenfoss, JPT Emerging Technology Senior Editor A biotechnology company from the San Francisco Bay Area is selling a futuristic solution to an old problem: lubricating drill bits grinding though rock. The product is a high-grade lubricant made from algae and is encapsulated in a polymer shell, hence the name Encapso. Coating the oil segregates the lubricant from the drilling fluid until it encounters hard contact or friction during drilling, such as a rotating drill bits on rock. It sounds like a research and development project, but it has been on the market for more than a year and used in more than 40 wells, most of which are horizontal ones drilled in unconventional plays. Argentina Remains Out of Reach for Smaller Players Jack Betz, JPT Staff Writer After offering incentives to international operators last year to drill in Argentina, the country still has more work to do in attracting foreign investment. High inflation and the local economy remain concerns for newcomers looking to profit from hydrocarbon exploration in Argentina, said Cesar Guzzetti, general manager of Latin America South Cone at Gaffney, Cline & Associates, during a Houston Petroleum Club presentation in August. The country’s most recent piece of hydrocarbon legislation, which was passed last October, is designed to attract more investment by assuring outside companies that they will face a more predictable business environment and that it will be easier to send profits back home. Unconventional Technology Gains Exceed Expectations, but Low Prices Offer a Stern Test Stephen Rassenfoss, JPT Emerging Technology Senior Editor Oil markets displayed their manic-depressive side in August, dropping to around USD 40/bbl early and jumping back to near USD 50/bbl at month’s end. Prices remained volatile in September. Amid the disorienting price swings, Wood Mackenzie offered a hopeful long-term outlook for one of the most prolific unconventional plays. “We still believe that the Eagle Ford will hit 2 million B/D of oil and condensate production in 2020, but the path to get there will be different,” said Jeremy Sherby, a research analyst following the Lower 48 oil and gas at Wood Mackenzie, who did the study. Plotting that path based on recent volatile trading is not likely to be a productive exercise. The uncertainty presents a big problem for those managing drilling. “What operators are looking for now is stability. We started to see that for a couple months (of oil prices) at USD 60. But as we all know that went away,” Sherby said. India to Auction 69 Fields on Revenue-Sharing Model Abdelghani Henni, JPT Middle East Editor India has unveiled a plan to auction 69 small and marginal oil and gas fields with estimated proved reserves of 89 million tons of oil equivalent to local and foreign investors. The fields are to be auctioned under a revenue-sharing model, where the government will receive a share of the revenue generated from the sales of the oil or gas at market rate. The bidding process will start in December. Successful bidders will be granted a 20-year unified license to invest in all hydrocarbon resources in the field they bid for instead of a license for each type of hydrocarbon per field.
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