THE WOODLANDS, TEXAS – Try your hand at this oil field engineering problem.
You have to get a massive amount of gritty, grimy sand into an oil well – it’s one of the ingredients in the powerful slurry of water and chemicals used to crack open shale rocks two miles underground, a process known as hydraulic fracturing. Can you do it without letting the sand erode the steel in the high-horsepower pumps that blast the mixture into the well?
Give up? The question had bugged Ron Gusek for a decade.
In the Bakken Shale, it takes $6 million a year in maintenance and repair costs to keep a frac fleet of trucks and pumps up and running, leaving North Dakotan oil field workers no choice but to replace broken valves and other pump components every four days.
Gusek says his company, Liberty Oilfield Services, is a month or two away from bringing a new technology to market that could fix that problem. It is planning to deploy a trailer carrying a heavy tungsten carbide-built pumping system that will allow sand to bypass the high-horsepower charge pumps and only mix with water and chemicals in an outside blender before shooting through tungsten carbide tubes — many times stronger than steel — and into the well.
That may cut down on oil field maintenance costs at a time when U.S. shale oil producers are scraping for every penny after crude’s seven-month plunge to around $50 a barrel. At a booth in the Society of Petroleum Engineer’s seventh annual Hydraulic Fracturing Technology Conference in the Woodlands on Wednesday, Gusek said the new pumping system won’t be the only new, more efficient technology oil companies need, but it’s another tool that could save them time and money.
“We’ve got to learn how to be able to work with lower and lower oil prices,” Gusek said. It has been done before, Gusek noted: Natural gas prices had sunk to record lows in 2011 and 2o12, but natural gas producers have slowly returned to gas fields as new technologies have crept in to make gas production more profitable at lower prices.
About 90 companies and more than 2,100 engineers and corporate representatives will gather in The Woodlands this week to show off new technologies they hope will save oil companies money after the second-biggest collapse in crude prices in three decades.
At North American oil fields, producers are planning to cut a combined $37 billion, but they’ll probably cut less from production efforts than they will from drilling, said Nathan Meehan, senior executive adviser at Baker Hughes and the 2016 president of the Society of Petroleum Engineers.
Oil companies have been blasting second helpings of sand, water and chemicals into older oil wells in a process known as “refracking,” an effort to get more oil out for a quarter of the cost of drilling new wells.
“That is a relatively low cost way to increase production that’s economic even at lower prices,” Meehan said.
The oil recovery from refracking has often been two to three times what was extracted in the first go-around, said Harold Brannon, vice president of pressure pumping technology at Baker Hughes.
“The return on investment is much better to go back into an existing well,” compared to drilling a new one, Brannon said. “It might be $12 million to drill and complete a Bakken well, whereas we can refrack it for $2 million to $3 million. And it has a slower decline rate.”
In the history of oil downturns, re-working old wells is a standard practice, but the technology for refracking wells needs to see “a lot of improvement,” said Joe DeGeare, vice president of sales and operations at NCS Multistage, a company that has developed a sliding sleeve designed to accommodate refracking efforts, by being able to close off sections of the sleeve a producer isn’t targeting. The firm has run 3,000 of the sleeves since launching the product last year.
At the exhibit floor during the conference, two companies were demonstrating how proppants can be suspended in slick-water systems used in hydraulic fracturing, which allows them to cover more surface area of the shale rock in an oil well and enables oil companies to pump as much as 60 percent less water into the ground.
Fairmount Santrol, an Ohio-based frac sand provider, has developed a type of proppant that can be wrapped in a polymer that swells when mixed in water, increasing the amount of rock that gets propped open by sand grains, freeing more hydrocarbons, said Brian Goldstein, product director at the company. That can reduce oil companies’ water and chemical consumption, and boosts production, he said. In one test case, the polymer-coated proppant bolstered a well’s production by 62 percent after 60 days, according to Fairmount.
“Instead of blending proppant with chemicals and water, you are able to have each individual grain of proppant stack an one another, and transport further out,” Goldstein said. “It’s going to be more fluffed up than other proppants.”
On the other side of the exhibit floor, Canadian fracturing firm Trican Well Service had its own buoyant frac sand. Trican’s version uses a different material that adheres to sand grains and creates a bubble around the sand, making it easier to pump into a well, said Jim Venditto, vice president of technical services at Trican.
Pointing to a picture of a beaker filled with water and sand, Venditto noted normal sand will float to the bottom of the beaker – but with a different coating, it will expand to fill the container.
“This is able to create a bubble around (the sand), so you can pump it at lower rates,” he said. “What we’ve seen is about a 20 percent increase in production compared to the typical slick-water fracs.”
As oil prices have fallen, hundreds of drilling rigs have been stacked. But it’s not all downside for the effort to extract oil: The lack of rigs in the field could give companies and oil field workers some breathing room to focus on making oil wells as productive as possible – and important task when shale wells typically pump only a low amount of the oil in place, Meehan of Baker Hughes said.
“When you’ve got so many drilling rigs running, it’s hard to focus all of your people on the optimization of production,” he said. “It’s reasonable to expect that the declines in production (spending) may not be as severe as the ones tied directly to drilling rigs.”