Is The Oil Production Efficiency Boom Coming To An End?

Oilprice.com ^ | 18-08-2016 | Peter

[bananaman22]

“How much more productive can these new wells get?” I asked my host who had kindly invited me on a field trip to some of western Canada’s most prolific oil fields.

Looking down the aisle of bobbing pump jacks, seven in a row on one side of the immaculate gravel pad, the veteran oil executive replied, “We can get up to 1,000 barrels a day out of some of the new ones, but that’s not a limit; we’re improving the economics and productivity with each new well.”

Impressive I thought, subconsciously nodding my head in sync with the leading pump jack.

The stats certainly show that the industry’s ability to pull oil out of the ground from parts of North America has recently improved by an order of magnitude. In other words, ‘rig productivity’ – the amount of new oil production that an average rig can bring on in one month of drilling– has increased 10-fold in the last 6 years.

Both of us stood marvelling at the operation in front of us, tacitly thinking the same questions. What are the limits to this remarkable energy megatrend: 1,000? 2,000? 5,000 barrels per day per well?

[A Formerly Proud Canadian]

Have no fear! If efficiencies improve too much, Turd-owe will slap producers with more tax or an NEP 2! Like Comrade father, like Comrade son!

[Redwood71]

This is an excellent article to display part the oil capacity of oil production in north America. But the Canadian fields are small compared to the oil around Florida and the Alaskan fields. This is why we are the largest importer and exporter of oil in the world overall.

And people don’t realize the political aspect of oil sales. A huge amount of the oil we get from Alaska stops at Valdez and is shipped to Japan to be refined and sold back to us at a profit. This is to protect their financial problems they are having and keeping them on pace to feed their people. Further more, we buy roughly only 3% of our oil from the middle east to cover our part of the oil for food program.

Both of these “programs” are beneficial to millions of people. So, even as a commodity, oil is actually more valuable as a tool than as a profitable product.

red

[mad_as_he$$]

No.

[Ancesthntr]

No. Emphatically, NO!

http://www.nextbigfuture.com/2016/01/technological-progress-in-big-data.html

Fracking 2.0 is coming, soon, and will drive the price of extracting a barrel down to somewhere between $5 and $20. Technology will, once again, upset the apple cart of those mired in the status quo, those with no imagination.

Here’s an old (2011) article http://www.nextbigfuture.com/2011/08/progress-to-unlocking-over-800-billion.html on a then-new technology to recover 800 billion barrels of oil out of the Green River formation that is centered in Colorado. All alone, that is 3 times the Saudi reserves. That’s recoverable, not in ground and theoretical. That’s NOT including the Bakken formation in North Dakota, NOT including Eagle Ford, the Permian Basin or the Barnett formation in Texas, NOT including California, NOT including the Northeastern US formations, and NOT including Alaska (which reputedly has a shale formation that dwarfs everything else combined in the US). In short, there is NO shortage of oil, only the technology to get it out of the ground econonmically (and Fracking 2.0 solves that problem).

FYI, 800 billion barrels could, alone, provide for more than all of our liquid energy needs. At 20 million bbls./day of usage, each billion barrels lasts for 50 days. 800 times that = 40,000 days, which is about 110 years.

[arthurus]

That is 110 years of oil recoverable with this week’s technology. That number will increase faster than it is approached.