Can you talk about EOR projects in two of the biggest markets in the region – Saudi Arabia and the UAE. Do you think, there are enough EOR projects in these two countries?
Yes. EOR projects are even more in these two countries than in Oman and Kuwait, because of the size of the markets they have. CO2 has multiple value drivers; one is the carbon capture, and second it’s a fantastic chemical recovery method. The recoveries are very good; in the range of 70-80%. And CO2-based EOR has been adopted in the regional oil and gas market.
If you look at the overall market distribution of EOR methods of thermal, CO2 and chemical – thermal takes the biggest share globally, followed closely by CO2, and chemical is catching up. Technology adoption is happening now and advances are also being made. One of the biggest challenge that we (at Schlumberger) felt in the EOR domain is how this is being applied. It is being segmented in such a way that it takes a long time for full EOR implementation.
As a leading oilfield services provider, could you outline the sort of product and services or overall portfolio that Schlumberger has for enhanced oil recovery?
Even though we have come up with fantastic technologies, the adoption curve is creeping up very slowly. It’s just been the whole concept of “can you prove it quickly?” So, what Schlumberger has developed is a full suite of technologies and that’s the advantage we have. We are a technology company and invest $1bn a year in R&D, probably now a little less due to the current downturn.
I mean if you look at Schlumberger, EOR is just not only one service – it’s not like “drill me a well”. This is a full field development, all the way from defining what the best EOR methodology is.
So we have developed a screening tool, we have developed reservoir simulation tool and then we go into the implementation. So about a year and half ago or so, we have taken the initiative as a company, because within this whole portfolio of technologies and services we offer, we are also segmented you know. So, what we did was we initiated integrated production services, that’s the product line that I represent.
So my job is to bring all the Schlumberger technologies and services under one project management. About two years ago, we made the Cameron acquisition, which brought into our portfolio their surface facilities part. Schlumberger has traditionally been a sub-surface company, but now with Cameron as part of Schlumberger, we have an offering for water treatment. Then, we are the best when it comes to subsurface logging.
One of the key challenges of EOR was and still is surveillance and monitoring. You start pumping the steam, but if you don’t know where your steam is going, it’s not worth it. You need to understand the chemistry and the process you are applying, so that you can monitor and control that too, to efficiently recover your hydrocarbons. So we have developed a long list of technologies for that and the list goes on.
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Can we talk about a specific one that comes to mind?
Like we have ‘MicroPilot’. This is all about, basically, doing the pilot in one year which is actually drilling the wells and injecting the polymers or the chemistries or steam, and waiting for the recovery. ‘MicroPilot’ is for the chemical EOR, and is our existing technology. We basically have chambers of chemistry which will take it downhole, in-situ, and we inject into the actual rock itself within the reservoir, and do the recovery estimate.
This is a technology that Schlumberger has developed that achieves swift results, that’s the advantage. Typically it takes a year, but by doing it through ‘MicroPilot’ – we are going only a few feet or few meters into the formation and we are recovering the hydrocarbon. In contrast, in an actual pilot study, you are going into hundreds of metres into the reservoir. But this is one way to speed up.
The other method is the Cross-Well imaging measurement. Basically, you can have the cross-well electro-magnetic measurements, and then you can see where your injected fluid and hydrocarbon is going. Surface Seismic is yet another Schlumberger technology, where you can understand where the fluid flood front is moving. So there are many technologies. And all these technologies apply to and are relevant for regional EOR projects.
How intense is the competition in the EOR segment of the market?
So there is going to be competition. The ultimate objective is to recover hydrocarbon, whether I do with solar or chemicals or polymers. So one of the projects we are working on is regarding downhole steam generation. One of the challenges with surface steam generation is the inefficiencies of moving the steam from the surface to where you want the heat, which is the downhole. You can lose a lot of heat from the surface, depending on the depth of the vertical, depth of the well.
So we are investing quite a bit in a technology, which is in a field testing phase that generate steam where you need it – downhole. I think, this will make an impact on the market. So there are competitive technologies out there.
One of the points I want to highlight here in the whole scheme of enhanced oil recovery, at least in the chemical part, is when we go to an operating company, they ask if Schlumberger is an EOR services company. To them we are not an EOR company, but an oilfield services provider. They consider EOR services companies to be Dow Chemicals, BASF and the likes. So, this is something we recognised, that we are not perceived as an EOR company but as an oilfield services company.
So what we did, this is again our initiative to complete the work flow, is we formed an alliance with Dow Chemicals. The idea is to again speed up the process of selecting chemistry. So, if the oil company wants to do the selection themselves, they will use Schlumberger or other service company to do the drilling, do the reservoir simulation, or surface facility, but they will sub-contract the work for chemistry selection to a third party which will take six months to a year.
Is this a collaboration to cater to the EOR market? When was this alliance formed?
Yes. This (alliance) was formed about a year ago. The objective is again that we work together. They (Dow Chemical) have a business unit for EOR, we have a business unit for the same, so we have a common interest.
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