Technological Innovation and Development: The
Key to Optimizing Production and Mastering Alternative Sources
by Olivier Appert
Chairman and CEO
IFP
During the coming decades, as conventional oil production starts to reach
its apex, the inexorable growth in the world's energy needs will force the
oil and gas industry to more efficiently use fields that have already been
tapped and then find and exploit resources located in increasingly complex
environments.
These efforts will be essential in ensuring the avoidance of shortages detrimental
to the development of countries and a smooth transition in production, even
within a context of significant developments in alternative energy sources.
Several factors, many of which are serious challenges, must be considered
before the oil and gas industry takes on new approaches. Costs must be controlled,
the environment must be respected and the most recent scientific and technological
advances must be employed in order to produce and transform oil found in
tar sands, extra-heavy crudes, ultra-deep offshore oil found at depths of
more than 2,000 meters or oil located underground at depths of more than
6,000 meters.
Technological innovation will be the key to solving the problem faced by
the entire globe: the renewal of oil resources. Developments in technology
will allow us to use and benefit from the remaining potential of oil and
gas energy for many more decades to come and will give our society the time
it needs to master alternative energy sources.
The Energy Context
According to the International Energy Agency (IEA), worldwide demand for
primary energy could reach 16 gigatonne of oil equivalent (Gtoe) by 2030,
representing a growth rate of 1.7 percent per year during the next 25 years.
Developing countries will be responsible for the majority of this increase.
Fossil fuels (oil, gas and coal), which today represent 80 percent of primary
energy supplies worldwide, are likely to undergo little change when it comes
to their share value, according to the IEA's reference scenario. Oil could
undergo a relative share drop from 44 percent to 35 percent, but its contribution
in terms of absolute value is likely to continue to rise by more than 55
percent between now and 2030.
This scenario does not take into account significant incentive policies that
will probably accompany efforts to increase the use of alternative energy
sources. Nevertheless, given the apparent inertia of energy systems, it seems
impossible to envisage the large-scale substitution of other energy sources
in the place of oil within the next 20 to 30 years. Worldwide demand for
black gold will therefore probably remain high.
Today, on a global scale, more than 50 percent of oil is ultimately used
in the transport sector. Oil products account for 98 percent of the energy
used for road transport. Alternative fuels (liquefied natural gas, liquefied
petroleum gas, oxygenated fuels from a chemical or biomass origin, etc.),
some of which have been used for a long time, do exist, but they still only
account for less than 2 percent of the total energy used for transportation.
In future years, the world's demand for mobility is likely to continue to
increase, as should the demand for traditional fuels such as gasoline and
gasoil. Given the inertia inherent in the transportation sector, a large-scale
transition to an energy source alternative to oil will not be possible for
several decades. It is important to remember that, in the automobile sector,
the time required to disseminate new technology is protracted. Many years
elapse from the point new technology is developed to the point it is marketed
as equipment for new vehicles. It takes much longer for technology to become
standard for all vehicles on the road. In industrialized countries, where
two-thirds of the world's vehicles are concentrated, the average span of
time it takes between technological development and standardized use is 20
years.
The demand for oil and oil products will therefore remain high, particularly
in the transport field, even within a context of strong development of alternative
energy sources.
To meet this demand and address our society's call for sustainable development,
the oil and gas industry will have to secure the supply of oil products in
coming decades. This will have to be done at a cost the world can afford
and, at the same time, ensure a minimal impact on the environment.
World Reserves
While oil resources are certainly limited on a global scale, it is clear
that technological advances are enabling boundaries to be pushed back.
In the 1970s, oil experts estimated that known oil and gas reserves would
last 30 years. Today, known conventional oil and gas reserves are estimated
to be around 145 Gtoe, which leaves us with reserves for 40 years at current
production rates.
The concept of reserves is both a technical and an economic one. The term "reserves" refers
to volumes of oil already discovered that we can quite confidently say, given
the economic environment and existing technologies, will be exploitable.
This definition clearly shows the concept of reserves is dynamic rather than
static. Reserves, as a concept, are constantly evolving. Something that may
not be considered a reserve by our current approach, simply because it has
not yet been discovered or is not economical, may be granted reserves status
in days to come.
How can today's oil industry exploit new reserves?
The first approach is the continuous updating of conventional oil fields
that have not yet been discovered. New fields may be found in the future;
however, they are likely to be smaller or located in more complex environments,
which will make them more difficult to find. The various existing assessments
of what may remain to be discovered are relatively disparate. Depending on
the sources, potential discoveries will yield between 70 Gtoe and 380 Gtoe,
with the most frequently accepted figure being around 100 Gtoe.
Improving the oil and gas recovery rate in fields currently in production
is a second possible approach. The average rate is 35 percent, but it varies
significantly from field to field. Current knowledge suggests technological
advances will likely increase this average value to 50 percent. This advancement
would enable the exploitation of an additional 120 Gtoe of reserves from
existing oil fields and would create 40 Gtoe worth of additional conventional
petroleum discoveries.
The exploitation of nonconventional resources is also an option currently
being developed. Extra-heavy crudes from Venezuela and tar sands from Canada,
which are colossal resources that have been recognized for many years, represent
total volumes estimated at around 460 Gtoe; however, their technically recoverable
volumes are a more conservative 100 Gtoe.
The renewal potential of oil and gas reserves must guarantee the supply of
energy for the 21st century, which will certainly be a period of transition,
provided the technological efforts made by the industry to date are continued.
Meeting Technological Challenges to Renew and Increase World Resources
The oil and gas industry must strive to meet four major challenges through
the application of advances in scientific knowledge.
Increasing the Exploration Success Rate. The average success rate for exploratory
drilling has practically doubled in the last 50 years. This is, in part,
due to numerous technological advances, particularly in terms of seismics.
Our knowledge of sedimentary basins continues to improve. Continued progress
in this field should focus on:
• The improvement of 3-D seismic subsurface
imaging
• The development
of geology/geophysics integration
• The constriction of geological models
applied to seismic imaging, which makes figures more relevant and accurate
•
The in-depth understanding of oil genesis through modeling of oil basins
Increasing the Average Recovery Rate from 35 to 50 Percent. Any significant
increase in average recovery rates demands a reduction in the uncertainties
present in reservoir models. To achieve this, progress is required in terms
of:
• The estimation of the petrophysical characteristics of subsurfaces
(porosity, permeability and fluid characteristics)
• The scaling up
of techniques permitted by the laws of physics that describe the behavior
of oil and gases in a porous medium to be transposed from a pore scale
to a reservoir scale
• The incorporation of the impact of large-scale heterogeneities
on the efficiency of hydrocarbon flooding
Furthermore, the development of complex, multi-branch wells and extended-reach
drillings during the last 10 years has allowed drilling technologies to become
much more effective and has markedly improved the draining of reservoirs.
In the future, with paired advances in both well technologies and productivity
with progress made in reservoir modeling, it should be possible to optimize
the structure and location of complex drainage architectures, which will
affect recovery rates.
In order to enhance production, it is also necessary to develop monitoring
technologies that allow for the simultaneous monitoring of a reservoir and
surface installations. The use of 4-D seismic methods, which are repeated
3-D seismics, allows for a spatial view of oil and gas displacements between
wells.
A final avenue for progress involves the optimization of improved recovery
processes. Ways of increasing the mobility of hydrocarbons in a porous medium
include the injection of gas, polymers and/or surfactant agents.
Making Hard-to-Reach Reserves More Accessible Through Innovations. In order
to increase reserves, future technologies must enable production in more
complex, or even "extreme" conditions.
Over the past 25 years, continuous advances have been made in offshore production,
which has led to ultra-deep oil fields located under more than 2,000 meters
of water being brought into production. Operators have now set their sights
on a target of 3,000 meters. Flow assurance – of the total flow produced,
from the head of a well all the way to the surface – is a prerequisite to
achieving this goal. New materials must also be conceived to create lighter
production pipes that are able to link the seabed to the surface, thereby
ensuring their weight does not become unacceptable at extreme depths.
Deep reservoirs of hydrocarbons are also a concern. Current fields are generally
located 4,500 to 5,000 meters underground. However, there is now real hope
of finding hydrocarbons at greater depths and, in particular, large fields.
These fields have to be located. Subsurface seismic imaging needs to be refined,
and the tricky problems associated with the process must be solved. Seismic
signals often become blurred and weakened at very great depths, and this
obviously must be resolved for fields located more than 5,000 meters below
the surface to be located. It is also crucial to develop methods to predict
pressure fields. Marked pressure contrasts can be expected in fields so far
underground, which would disrupt drilling and the flow of petroleum during
production. It is also necessary to identify materials that can withstand
the very high temperatures (200¡C and more) found in the subsurface at depths
of more than 6,000 meters.
Innovative technologies must also be developed to reduce the viscosity of
heavy crudes, which will improve their production and transportation conditions.
Emulsification of these heavy crudes through the addition of surfactant compounds
is one of the techniques currently being explored. Exploratory research must
also be studied, particularly when it comes to pre-refining at wells, or
even in wells. This method would consist of using catalysts added around
wells to perform an initial cracking of the substances composing the crude
oil, resulting in a reduction in viscosity. Further, in situ combustion processes,
such as the combustion of hydrocarbons in the formation by air or oxygen
injection, could significantly increase the recovery rate of these crudes.
Finally, the development of natural gas must be promoted. The gas reserves
currently available represent around the same volume as oil reserves, but
the resources still to be discovered are probably much greater. Gas plays
a key role in terms of increasing and renewing reserves. The main problem
to be solved is the cost involved in transporting natural gas. To this end,
various technological solutions have been developed, such as maritime transport,
the reduction in pressure losses experienced in gas pipelines and more effective
liquefaction processes that require less costly investment. All these options
require further development efforts to achieve greater transport cost reductions.
When it exits a field, natural gas frequently contains sour H2S and CO2 gases,
which need to be eliminated. New, more effective treatment methods, such
as cryogenics, are currently being researched, and this must become a focus.
The development of chemical conversion processes for the production of fuels
should open up new avenues for natural gas. To this end, the Fischer-Tropsch
method must be optimized for producing gasoil from natural gas. New reactors
and high-performance catalysts should make this possible. A highly promising
new-generation Fischer-Tropsch process has been produced by IFP in collaboration
with ENI.
Controlling CO2 Emissions. When considering the sustainable use of fossil
fuels, the control of CO2 emissions is essential. Oil, gas and coal all produce
CO2 following their combustion and are the main culprits in global warming.
With regard to the environmental and energy issues associated with the problem
of increased CO2 concentration in the atmosphere, both society at large and
industry must be provided with efficient, safe and inexpensive processes
to eliminate CO2 in the short term.
Capture and geological storage are the most promising options, both technically
and economically speaking, for solving the problem of emissions from industrial
facilities. Several reinjection pilot projects are ongoing, including one
in the North Sea's Sleipner field and another in Canada's Weyburn field.
Although the overall potential for geological storage is difficult to estimate
accurately, it nonetheless appears to be sufficient to fulfill our requirements
for several decades.
In terms of CO2 capture on industrial sites, various processes will have
to be developed. A process for flue gas scrubbing that uses reactive solvents,
adsorbents, separation or adsorption membranes is necessary. Cryogenic techniques,
which are still expensive but well suited to high CO2 concentrations, are
another possibility.
Geological storage will require control of interactions that occur between
CO2 and rock in order to model the long-term behavior of CO2 in the subsurface.
Methods and tools for monitoring stores based on seismic methods will also
have to be developed.
Reducing transport-related CO2 emissions will primarily be achieved through
cutting the fuel consumption of vehicles. In order to effectively reduce
fuel consumption, it is necessary to employ new technologies, such as direct
gasoline and diesel injection, turbo supercharging and, for gasoline engines,
the highly promising "downsizing" approach, which consists of reducing
engine size and using turbocharging to keep performance levels comparable
to those of the original level. The development of alternatives, such as
natural gas vehicles, gas-to-liquid engines or hybrid engines, is another
approach that can be employed to reduce vehicle emissions.
Conclusion
In order to meet the world's needs and demands for energy, while simultaneously
observing our current energy supply and protecting the environment, the
oil and gas industry will have to solve many complex technological problems
in the coming decades and continue to innovate as it has done since its
inception.
Recent scientific and technical advances, the fruits of collaboration between
the worlds of research and industry, have led to a profusion of promising
emerging technologies and represent key assets for preparing for the future,
particularly in terms of managing the energy transition from oil and gas
to new energy sources.
In the face of increasingly fierce competition, it is imperative these new
challenges become integral to our research and innovation strategies. Developments
will play a crucial role in guaranteeing genuine sustainable development
for the world.
Olivier Appert is chairman and CEO of IFP. He graduated from ƒcole Polytechnique
with certification as a general mining engineer. After working in the Lyons
Department of Mines as well as in various positions in France's Ministry
of Industry and on staff of the country's prime minister, from 1984 to 1986
he served as deputy director for the staff of the industry minister. In 1987,
he was appointed the head of strategy at TŽlŽcommunications RadioŽlectriques
et TŽlŽphoniques (TRT), a business firm. In 1989, Mr. Appert assumed the
responsibilities of director of hydrocarbons with the Ministry of Industry,
and in 1994 he joined IFP's general management team, assuming responsibility
for research and development. In 1998, he was appointed vice president of
an IFP-controlled holding company, ISIS, which holds stakes in firms active
in the petroleum and oil service and supply sector. Mr. Appert has served
as director of long-term cooperation and policy analysis at the International
Energy Agency since October 1999.
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