How Economical and Accessible are European Black Shales?
Looking back at Barnett
Success of North American shale play provides benchmark for Europe
Members of an Interactive Roundtable Discussion at the Global Shale Gas Forum in Berlin, Germany did their best to tackle the question from all angles.
As moderator of the discussion, Graham Tiley, General Manager New Ventures (Exploration) at Shell International Exploration and Production B.V said he hoped to make things a bit more interactive – and interactive they were.
“We’d like to provide good groundwork around that key question: is it commercial viable?” stated Tiley. “We’ve seen what success looks like in the US - can we translate that here in Europe?”
He suggested a an entire conference in the future on providing a good overview of European black shales: “It’s one thing I’ve missed.”
“Shale gas development is happening,” said Tiley, “but can it be technically and economically successful?”
Key questions, according to him are the geological factors, the quality of shales and any fundamental differences compared with shales in the US.
“Once you’ve got the gas, then it’s about cost and market. The influence of Russian gas might be worth exploring, but can the service industry support the development, regulatory and permitting, will the government stimulate it?”
“Can our shales be top quartile?” was another question posed by Tiley.
Talisman Energy Inc.’s Unconventional Gas Specialist, Basim Faraj offered a bit of perspective from his experiences in North America.
“If you look back 5-10 years ago everyone was looking for Paleozic shales, and Barnett was the model. The comparison was always to Barnett, but in a few years there were fundamental differences in production; Eagle Ford, Utica, Barnett are all different shales with differences in TOCs, permeabilities, thickness. When I first looked at Haynesville I said it wasn’t going to work because it had too much clay, but it’s the best shale there is,” he remarked.
“So who knows what shales you might have,” he said, “and how they compare in their producibility. The main thing is to look at the attributes - do they have the main attributes? We need a new core, a new analysis of the properties of these shales.”
Prof. Mike Stephenson, Head of Science, Energy at the British Geological Survey spoke about the similarities of the carboniferous basins in North America and Europe.
“The things that created these deep basins were ice caps growing and contracting,” he explained. “As it happens this is translated into a stratigraphy which you can trace across Europe and the US - you can see the same fossils. They are the same sequences in the US and UK,” explained Stephenson. “What happened later on is key to their differences. Sea rise and fall was occurring in the same equatorial belt, which may account for the high amounts of organic matter that you see. I can’t speak for the lower Paleozoic.”
Speakers also addressed what they said termed “overpressure” at the Haynesville shale play, and its impact.
“It has 10-15% porosity, capped with a very impermeable shale,” said Basim Faraj. “When we did isotopes on the methane, at that boundary there is a complete disconnect with the isotopes. There was a perfect seal; you can’t correlate oil and gas at other sources. It created this massive overpressure and it hasn’t been affected by uplift yet. It’s very hot and you need special equipment and logging tools. It’s a pressure cooker that did not leak.”
“Let’s assume we have good quality shales,” said Graham Tiley. “How about the frackability? What about the transfer of learning curves? Can the acceleration of learning curves in the US happen in Europe?”
Basim Faraj answered: “If you look back at the Barnett, they were drilling vertical. Horizontal was suggested, they fractured with hydrogen and that well produced less than the vertical. So they thought the horizontal wells don’t work, and they waited. It took Michelin energy to do the first slick water frac, which took five years. That was a big time gap because there were unknowns.”
“Southwestern thought it was under pressure,” he continued, “ and talked to Schlumberger who drilled 50 vertical wells, which were fracked with foam and nitrogen; these were dismal failures.”
However, fortunes reversed, according to Faraj.
“They admitted they wasted 1.5 years but now they are one of the top innovators in the field. So to take all of those lessons, each area, the expertise of the staff - and don’t underestimate the mindset - the education we have is really our biggest problem.”
“The relative lack of data in Europe,” commented Graham Tiley, “and the use of analogues is often used and the danger is you go off on the wrong path of development.”
“The importance of desperation should not be underestimated,” piped in a conference participant from the audience at the Global Shale Gas Forum, who added, “George Mitchell hung in and he was a founder of a green city, and sold a successful property to fund his project.”
Yet another audience member had a query about being a “slave to an engineering design” when it comes to drilling, sticking to what is believed to be tried and true. “It’s hard to generalize,” he said. “Can we design smart studies because of the lack of data in Europe? We don’t need to start at ground zero, even though we have a blank sheet.”
“As you come into a new field there are these phases where you feel swamped by the info, and there are no patterns, but patterns begin to emerge,” said San Leon Energy Plc.’s Non-Executive Director Jeremy Boak. “Now we can begin to look for the trends and you can ask ‘what kind of shale is this and what do I need to know? What are the textural features, what’s going to control the frackability of this shale?’”
Someone else pointed out that long reach wells that had come from Europe to the US in the early 1990s were expensive, but that this was a technology transfer “in the other direction.”
“Highly deviated drilling does have a long history in the 1960s in Long Beach,” said Jeremy Boak, “but the real innovation was to make sharp turns.”
“Most of that drilling happened in conventional wells,” said Basim Faraj who added, “Service companies really don’t like slickwater fracs, because the material is too cheap: water and sand.”
Graham Tiley noted the cost differences in the drilling and the services. “But where may the biggest differences lie? Where are the big differences going to be?” he asked
Audience members replied: Steel was one, rigs another, as well as stimulation equipment, and the availability of property.
“Is there a need to repeat what’s happened in US?” asked Tiley. “What are concrete measurements? What is the cost per frac? A couple hundred dollars per meter versus 1,000 euros, which is a huge gap.”
“What’s the thousandth well going to cost?” he continued, concluding, “We’re in a developmental phase.”