New technology offers fresh bounty from existing fields, BP says

HOUSTON — Oil producers can expect to pump far more barrels from existing oil and gas fields than from fields yet to be discovered, two of BP plc’s energy analysts said Wednesday.

BP, the London-based supermajor, estimates that the world will need about 2.5 trillion barrels of oil equivalent to meet its energy needs through 2050. About 4.8 trillion in reserves can technically be recovered using today’s technology and another 2.0 trillion can be unlocked through enhanced recovery techniques, such as flooding wells older with water to drive more oil to the surface. Not all of those barrels will be tapped.

“If you apply the best technology even in just conventional, giant fields than you can add lot of barrels over the next 20 years,” said David Eyton, group head of technology at BP.

The shift reflects the steady march of technology that has allowed producers to recover a greater percentage of oil from discovered reservoirs, as well as the addition of vast new reserves over the past decades from onshore shale basins.

Recoverable oil and gas reserves from already discovered fields vastly outnumber the roughly 700 billion additional barrels of oil and gas equivalent BP expects will be discovered through 2050.

The largest addition of extra reserves has already come in the past decade, when oil drillers figured out how to unlock the oil and gas locked away in shale by pumping water and sand into the ground at high pressure. The discovery has had producers examining shale reserves all over the world, and added a huge amount of on-paper barrels that could be pulled to the surface.

But shale oil has challenges too. The complex wells are often more expensive than more simple conventional ones. And while shale rocks exist all over the globe, the fracturing process has only been widely used in the U.S., and even there low prices have reduced activity to only a handful of the most productive basins. Producers are only currently able to pull a small amount of total oil and gas in the rock to the surface.

“All the shale oil and all the shale gas around the world is now potentially exploitable,” Eyton said. “So the amount of oil and gas you can go for has jumped hugely. But the recoveries from it are very low.”

The high cost of both unconventional reserves and exploring for new fields means that producers have been more willing to devote resources to making existing fields more productive. BP plc itself produces about 10 percent of the light oil pumped through enhanced oil recovery, or methods of squeezing more crude out of older oil wells.

The company said it’s expecting those techniques to get better as time goes on. BP said it’s experimenting with high-tech chemical solutions that can be pumped into wells to drive more oil to the surface, as well as advanced computer models that help the company decide how to drill wells that will bring the most oil out of a reservoir.

Ultimately, that could mean that companies hungry for oil could find it a better deal to go back to their old fields than to go searching the globe for new ones, Eyton said. Enhanced recovery is “beginning to challenge exploration as a lever on supply to the world’s consumption,” he said.

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