Oil Giants Use Size to Overcome Fracking Challenges
20 Septiembre 2018 - 7:29AM
Noticias Dow Jones
By Bradley Olson
FOX CREEK, Alberta -- Fracking is entering a new expansion phase
in this Canadian town more than 2,000 miles from the center of the
U.S. oil boom -- one that heavily favors the world's energy
giants.
Chevron Corp. is laying the groundwork here for what it calls a
"factory model" for shale drilling, master planning an entire
region of small shale wells by locking up labor, building
infrastructure and securing sand and other needed materials, all at
once.
Shale drilling, once the province of small, scrappy operators,
has run into growing pains in places such as the Permian Basin in
Texas and New Mexico, as producers struggle with pipeline
bottlenecks and rising labor and material costs.
Big oil companies seeking to re-create the U.S. shale boom in
countries such as Canada and Argentina are trying to avoid these
problems by managing shale sites in concert to prevent logistical
hurdles and streamline operations, similar to the way they run
traditional oil megaprojects.
Already in Texas, there is evidence that larger companies such
as Chevron and Exxon Mobil Corp. are weathering the bottlenecks and
rising costs there better than smaller rivals -- and continuing to
ramp up production -- because they have the economies of scale and
wherewithal to develop their own solutions to these problems.
"They can transfer technology and skilled people across assets
and parts of their portfolio from North America to Argentina," said
Andrew Slaughter, executive director of the Center for Energy
Solutions at Deloitte LLP. "These bigger companies have the scale
to build or finance infrastructure and secure the best equipment
and supplies. They have come to shale in quite a material way."
The "bigger is better" mantra has started pushing smaller
operators toward a new era of consolidation in fracking. A similar
pattern has played out throughout the history of the oil industry,
with wildcatters pioneering new technologies and discovering new
fields, and larger, better-financed companies eventually taking
over.
Deals among smaller oil-and-natural-gas companies that don't own
refineries are on track to reach almost $300 billion for 2017 and
2018, the highest two-year merger volume in more than two decades,
according to Dealogic. The biggest tie-ups have occurred in the
Permian Basin, where oil this year has sold at a price as much as
$20 a barrel below global benchmarks because of bottlenecks and
other constraints.
As Chevron seeks to expand shale around the world, it is taking
lessons from Texas oil fields and from a model it pioneered in
Southeast Asia in the 1990s. In the Gulf of Thailand, Chevron
drilled thousands of wells to access isolated pockets of oil and
gas. Over time, Chevron learned the value of standardizing
equipment and processes to save money and keep costs low.
Earlier this decade, as the company began to turn its attention
to fracking, teams of engineers working in Canada, Texas and
Pennsylvania began visiting Thailand to see how they could improve
in the U.S. oil patch.
"Shale was a great fit because of the quantity of wells you're
going to drill, the repeatability, well designs and rig types,"
said Kim McHugh, vice president of drilling and completions at
Chevron. "It's a working ecosystem."
In Fox Creek, about 160 miles northwest of Edmonton, Chevron is
putting what it has learned into practice. That includes the use of
underground data sensors linked via fiber-optic cables to analyze
continuing fracking jobs, which blast rock layers with water, sand
and chemicals. The company uses the resulting information to make
adjustments and stimulate the release of more trapped oil and
gas.
But it is also making changes to account for local conditions --
and leveraging its size.
At a remote well site in Alberta, where employees are more
likely to contend with logging trucks or bears than residential
neighbors, Chevron built a facility that functions like a grain
elevator and can store 1,800 tons of the sand that drillers use in
fracking.
Known as the Sahara Sand Storage unit, it allows Chevron to
continue drilling and avoid having to wait for deliveries from
dozens of trucks a day. That is especially important after spring,
when frost here melts and road bans stemming from the thaw's
effects can limit accessibility.
Chevron hasn't disclosed how much oil and gas it might
ultimately produce from the region. Analysts were once skeptical
about the company's Canada prospects, but many now say its position
might be worth billions of dollars.
Shale development has taken off in the country, where production
linked to fracking is expected to reach the equivalent of about
three million barrels of oil and gas a day in 2020, according to
Rystad Energy. That is more than five times higher than in
2011.
"We should be able to accelerate faster here based on our
success in the Permian," said Andrea Schnare, a Chevron operations
manager who recently switched assignments from West Texas to
Canada. "It's much easier to adopt best practices across different
areas."
(END) Dow Jones Newswires
September 20, 2018 08:14 ET (12:14 GMT)
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