The Way Ahead Vol. 8 Issue 1 Year 2012

An Official Publication of The Society of Petroleum Engineers • www.spe.org

SCHLUMBERGER CEO PAAL KIBSGAARD | GUIDE TO STAVANGER | WHY ENGAGE IN NETWORKING?

The Magazine by and for Young Professionals in Oil and Gas VOL. 8 // ISSUE 1 // 2012

UNCONVENTIONAL JOB HIRING FOR

UNCONVENTIONALRESOURCES DEVELOPMENT

On The hOrizOn//

Our license to operate depends on having the right people working with the right systems for maximum performance.

We are delivering prOjecTs in sOme Of The WOrld’s deepesT WaTers, and setting drilling records with efficiency, speed, and world-class safety.

Bhp BilliTOn peTrOleUm1360 post Oak Boulevard, suite 150houston, Texas 77056United states of americap 1.713.961.8500 f 1.713.961.8400www.bhpbilliton.com inTeresTed in a career WiTh Us?post your resume on our website: www.bhpbilliton.com - people & employment or email directly to: [email protected]

Shenzi first oil and natural gas production in the Gulf of Mexico began in March 2009, ahead of schedule and within budget.

Bhp Billiton petroleum is looking for engineering professionals with five to ten years or more of industry experience to join our growing team of functional experts. as part of the world’s largest diversified resources company, we have the financial strength of a super major combined with the agility and energy of a start-up. in the last 24 months, we brought on stream two of the world’s four deepest Tension leg platforms, and our production volumes have increased at a nine percent compound annual growth rate for the last three years. Behind this performance is the commitment of our team of more than 1,700 employees. We are growing

our capability toward functional excellence and an ability to work anywhere in the world. We are seeking engineers with a strong technical foundation who want the opportunity to make a difference on material, multi-billion dollar assets. multiple openings are available in the following areas:

• production engineering• reservoir engineering• facility engineers• project engineers• drilling engineers

We are also seeking geoscience professionals to support our production, development, and exploration divisions.

Vol. 8 // No. 1 // 2012 1

Printed in USA, Copyright 2012, Society of Petroleum Engineers.

Americas Office Office hours: 0730–1700 CST (GMT–5) Monday–Friday 222 Palisades Creek Dr., Richardson, TX 75080-2040 USA Tel: +1.972.952.9393 Fax: +1.972.952.9435 Email: [email protected]

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ContentsVOL. 8 // ISSUE 1 // 2012

2 President’s Column2012 SPE President Ganesh Thakur offers his “unconventional” views.

3 What’s AheadPerspective from TWA’s editor.

5 TWA InterAct Letters to the editor.

6 TWA InterviewA conversation with Paal Kibsgaard, Schlumberger chief executive officer.

8 ForumUnconventional oil and gas resources offer new challenges for the industry and great opportunities for young professionals.

11 Tech 101Extracting gas through desorption in shale reservoirs.

12 Economist’s CornerUniversity of Houston professor W. John Lee discusses the economics, regulations, and politics surrounding shale.

14 Pillars of the Industry Kishore K. Mohanty of the University of Texas at Austin and Valerie Jochen of Schlumberger.

18 SPE 101What the best YP committees are doing now.

19 HR DiscussionUnconventional job hiring for unconventional resources development.

21 Soft Skills Engage in networking and realize your dream job.

22 YP NewsflashCoverage of young professionals’ events around the globe.

24 Discover a CareerOpportunities in petroleum reservoir simulation and flow assurance.

26 Technical LeadersAn interview with Joe Leimkuhler of Shell and Greg Leveille of ConocoPhillips on unconventional resources development.

29 YPCC Update Be a part of the YP revolution!

30 A YP’s Guide to...What it is like to live and work in Stavanger, Norway.

32 Your Best ShotReaders submit their best on-the-job photos.

An Official Publication of The Society of Petroleum Engineers • www.spe.org

2

he word “unconventional” has become quite common in today’s E&P

(exploration and production) lexis. A quick search of SPE’s OnePetro.org library returns more than 1,750 documents using the word in the title. This is not surprising, since most energy analysts believe that world sources of unconventional hydrocarbons—such as gas hydrates, tight gas sandstones, and oil and gas shales—hold more fuel than undiscovered conventional hydrocarbon sources.

According to the International Energy Agency’s World Energy Outlook 2011, the long-term global natural gas resource base is very roughly estimated at more than 800 Tcm, of which about 50% is unconventional gas. Total natural gas resources could sustain today’s production for more than 250 years, and all regions have resources approximately equal to at least 75 years of current consumption.

The IEA also projects oil demand will hit 99 million B/D in 2035. A growing share of oil equivalent output will come from natural gas liquids and unconventional crude resources, such as extra heavy oil, oil sands in Canada, and tight oil in the US. Unconventional oil production will play an increasingly important role in the global energy economy.

These unconventionals are the new conventional.

So what does this mean for the industry? It means working with increasingly geologically challenging reservoirs at a higher cost of extraction and development amid a host of possible roadblocks, including public concern about water issues, environmental impact assessments perhaps limiting access to resources, growth in regulation, and longer permitting processes. Not the ideal norm.

President’s Column

Ganesh Thakur, 2012 SPE President

To achieve the production demands of the future, there will need to be a significant increase in global energy-related investment over the next 20 years, a large fraction of which needs to be in technology development. We have seen how advances in horizontal drilling and hydraulic fracturing technology have transformed the natural gas supply in North America. More advanced technology will be required to access resources that are deeper, hotter, tighter, more remote, in deeper water, and in smaller, harder-to-find prospects.

Another large piece of global oil and gas investment needs to be in people. Although the recession has delayed many retirements, many engineers and geoscientists working in our industry will retire in the next 5 to 10 years.

With the influx of young professionals (YPs) into the industry around the world and the maturity of the current workforce, YPs are being asked to take on more responsibility sooner in their careers. Rapid changes in the industry require YPs to have broader technical and soft skill sets to perform the complex tasks required of them every day. This requisite, coupled with the complexity of today’s E&P environment, compounds the challenges facing the industry. We no longer have the luxury of time to develop both new technology and new personnel. Both have to be developed simultaneously with deployment.

How do we accelerate technology and talent development? The answer is fundamental to SPE’s purpose: through the power of information dissemination and collaborative focus. For technology development, we need to develop stronger collaborative ties between industry,

governments, and academia for more R&D (research and development). The industry also needs to collaborate with countries across the globe to learn best practices, such as the Alberta, Canada, model of how to stimulate private investment, streamline permitting processes, and accelerate sustainable development of resources. Industry and governments must work together to address public concerns and encourage prudent development of needed energy resources. We can also learn from collaboration with industries outside the E&P sector—including nanotechnology, biochemistry, medical technology, materials science, computer modeling, and aeronautics and space technology. SPE is an ideal forum for such collaboration.

To help develop the talent pool, sharing knowledge and best practices is essential to help accelerate the time it takes for YPs to reach autonomy. SPE has many resources that promote YPs’ ability to learn from each other, develop consensus, and build on each other’s strengths, resulting in a stronger industry as a whole. If done effectively, with the synergy such efforts create, SPE helps expedite progress and avoid duplication of effort, thereby reducing cost and time.

There are many ways to nurture collaborative efforts. Sharing best practices, participating in R&D consortiums, creating industry internships for students and sabbatical opportunities for college professors, allowing qualified industry engineers and scientists to teach at colleges, and increasing research funding for colleges are good examples of collaborative efforts.

SPE facilitates best practice sharing through conferences, applied technology workshops, technical information groups, and forums, as well as through publication of technical papers and journals. In the spirit of enhancing collaboration, we are also taking a further step and exerting special effort to hold such events jointly with other industry professional societies.

All these initiatives help take the next generation of YPs into the world of the new conventional. TWA

International Energy Agency (IEA) World Energy Outlook 2011: “Are We Entering a Golden Age of Gas?” Special Report http://www.iea.org/weo/docs/weo2011/WEO2011_GoldenAgeofGasReport.pdf; and IEA World Energy Outlook 2011: Executive Summary http: //www.iea.org/weo/docs/weo2011/executive_summary.pdf .

THE NEWCONVENTIONAL

T

3Vol. 8 // No. 1 // 2012

am not going to pretend I am a smart young professional (YP) who knows everything to be known about

unconventional hydrocarbon resources and the technical differences that distinguish them from conventional oil and gas exploitation. As a matter a fact, most of my current knowledge on the subject comes from reviewing the excellent articles we have lined up for you in this issue of TWA.

However, for the past 3 years I have worked substantially on extra heavy oil in-situ thermal recovery, which is considered part of the unconventional resources roster. Nowadays, the term “unconventional” refers mostly to shale/tight gas and liquids, leaving out other “super” unconventional resources, such as gas hydrates, extra heavy oil, and coalbed methane (CBM), among others. The bottom line is that any hydrocarbon resource that is different, in terms of origin, storage, ease of exploitation, and/or properties, falls under the umbrella of unconventional resources.

The recent history of the shale gas boom in North America is the latest proof that changing our own future is possible. We are not condemned to live the future that analysts, forecasters, and other prophets of disaster have predicted for us. We can make a difference and we are doing so.

Since 2004, I have been following the natural gas market in North America. During 2004 to 2007, I read annual outlooks on natural gas production that had only minor references to CBM activity. At the time, liquefied natural gas (LNG) seemed to be the only sustainable solution for growing gas demand in this part of the world. In 2007, a few articles started mentioning the contributions of the Devonian shale to the natural gas supply; then the industry was still praying for a technology miracle. A year later, the success stories of shale and tight gas exploitation started to spring up across the industry. Fast forward to 2012 and shale resources have been transformed from an “impossible”

massive energy resource into the new conventional source of hydrocarbons. The shale revolution has fueled the global boom in E&P activity of the past couple of years with the promise of establishing itself as the energy alternative for this century. Technology saved us again and, while doing so, has proven a few of us in the energy sector wrong.

The term “unconventional” implies these resources are more challenging to develop. For those trying to produce them economically, they represent an added layer of complexity. This is just what we YPs needed: an opportunity to prove our ingenuity and creativity without having to fight established paradigms.

The young nature of unconventional resources puts us (E&P professionals) on the same level of play, because we are still

in a learning mode, developing the knowledge and solutions required to economically exploit these resources. What a great opportunity for making a difference, for shaping a

growing sector of our industry that requires unconventional thinking and unconventional methods for solving its challenges.

YPs are the unconventional human resource required to decipher the energy future of the world. I am convinced that sustainable development under growing energy demands cannot be achieved by continuing with the conventional thinking of our industry. Do not get me wrong. I encourage you to learn the conventional ways and established technical knowledge of our industry. But, more importantly, I challenge you to think differently and be part of the solution now. TWA

Is TWA meeting your expectations?

We challenge you to send us your feedback (being constructive is not a requirement; we have a thick skin). Write us at [email protected] or contact me at [email protected].

Max Medina

Editor-in-Chief The Way Ahead

STAY HUNGRY. STAY FOOLISH.STAY UNCONVENTIONAL!

What’s Ahead–From the Editor of TWA

UNCONVENTIONALRESOURCES: THE NEW

CONVENTIONAL?

I

4

TWA is looking for enthusiastic and committed YPs to join the editorial committee for 2012. The role involves working remotely with YPs from around the globe to deliver the content that TWA brings to you. The selected editors are required to commit to TWA for 3 years. The main responsibilities are planning the article, contacting authors/interviewees, editing, writing monthly progress reports, and making sure the work is carried out with high quality and delivered on time. If you are creative, have an excellent command of written English, and can handle the pressure of juggling work with an exciting and unique editorial experience, apply to join the committee. Prepare:

Call for Editors 2012TWA needs you!

Please send your application

and questions to

[email protected]

1

A 200-word essay giving your main reasons and motivation for applying to TWA

A single-page résumé including SPE/volunteer activities that reflect your commitment

2

www.spe.org/atce/2012Society of Petroleum Engineers

unconventionalwisdom

SPE Annual Technical Conference and Exhibition 8–10 October 2012 » San Antonio, Texas, USA

Henry B. Gonzalez Convention Center

5Vol. 8 // No. 1 // 2012

TWA InterAct

Re: The Technology Issue: Carpe Technology Geeks

One of our readers has jumped on the “oilfield geek” bandwagon. Scott Thompson sent us an email that started on a skeptical note, but ended embracing the call for the internal nerd in all of us. Here are the highlights: “I’ll admit that when I hear another call for ‘innovation’ and ‘new technology’ to save the day, part of me cringes. Maybe it’s because of the occasional lack of commitment to research I’ve seen or the naiveté of the ‘clean’ energy sector to overstate certain technologies. Technology breakthroughs are tough and we can’t schedule them! But I really like the approach of calling out the geeks in our industry as a first step. We need geeks who are passionate about improving efficiencies and safety, who will apply their ‘geekiness’ to discern which technologies to pursue, evaluate them effectively, interpret the results clearly, and know when to change direction. We produce an amazing product! Its energy density, portability, and cost are features to be proud of! We can’t predict when the breakthroughs will arrive, but with enough geek power, we can be confident they will.” Thanks, Scott. May the force be with you!

Re: SPE 101—Writing SPE Technical PapersWe are glad about the passion shown by some of our fellow SPE members on important topics, such as SPE technical papers. Darren Maley of Trican Well Services wrote: “You had an excellent idea with these articles. This is a topic I am interested in and I am sure many TWA readers are as well. But I think it fell very short of what is actually useful to read. The first article, the interview, states that the paper should be interesting, novel, and well written. Unfortunately that isn’t anything novel or interesting. The second article basically states, don’t write something that has already been written. ... You should really have interviews or advice from paper reviewers on what they are looking for

in an abstract or how to get your paper noticed and selected.” Ouch! Darren, thanks for the feedback and suggestions. We hope you realize that our readership is quite varied and while you may find some of our content rather obvious, we expect it to be interesting for other readers who might be in an earlier stage of their career. We will do our best to have more useful insight for our more experienced readers and maybe some tips from paper reviewers.

FROM LinkedIn

Re: The Key to Success: Failure

David Reid’s article in our last issue (TWA October 2011) stated that failing forward is an essential part of evolution. We asked our LinkedIn members to share their failures. Here is what a couple of brave ones wrote.

• Rita Esuru Okoroafor: “I was reporting reservoir pressures for a client and I was using an Excel spreadsheet for this purpose. I did not know there were some equations on the sheet. I did some copy and paste and immediately sent to the client. In less than an hour I got an email about the wrong values I had presented (and all my bosses were copied!). For me it was something I learned from. I always ensure someone else takes a look at what I am sending out ... a peer review never does harm.”

• Henny Gunawan: “One particular failure I remember was I accidentally offended a person by saying things out of emotional feelings. I did not realize at the time how much that would impact my relationship with that person and create problems in the work relationship. Now, looking back, I learned from that immaturity and always thank that person for making me much better and mature. You never know how deep your water is until somebody tests you, it was not really pleasant but I had a big lesson out of it.”

From the experience of our contributors, it seems that the key element of evolution is not avoiding failures, but learning from them and changing for the better. Thanks.

Re: Petroleum Geeks—More Openness Required

Sebastian Magri is one of our geek readers who wants the nerd calling to go beyond becoming more technical to being more open. He wrote: “New times require much more openness. Openness is the best way to accelerate technology developments for the oil field and also the best way for us, the young professionals, to be able to have the amount of information we need and to grow faster than our precursors and to make the changes that our industry needs.” We could not agree more with Sebastian. The challenge remains how to promote openness when the business/competitive nature of our industry seems to get in the way. Anything we can learn from other industries? Ideas wanted.

Oil Field of theFuture Series

What will our oil industry look like in the next 25, 50, or 80 years? TWA wants to experiment by taking a collective look at the future. In each issue, we will propose a piece of oilfield equipment, process, or software and ask for your vision of the future. We will then summarize your input and sketch our collective forecast on how our industry will evolve. The results will be published in a subsequent issue of TWA.

Your next task is to imagine and sketch the “Drilling Rig of the Future.” Send your vision to: [email protected].

TWA Assignment

6

TWA Interview

Paal Kibsgaard is chief executive officer of Schlumberger. Before this, he held a variety of global management positions at Schlumberger, including chief operating officer; vice president of engineering, manufacturing, and sustaining; and vice president of personnel; as well as president of Schlumberger Drilling & Measurements. Earlier in his Schlumberger career, Kibsgaard was geomarket

manager for the Caspian region after holding various field positions in technical sales and customer support. A petroleum engineer with a master’s degree from the Norwegian Institute of Technology, Kibsgaard began his career in 1992 working for ExxonMobil. In 1997, he joined Schlumberger as a reservoir engineer in Saudi Arabia.

PaalKibsgaard

When did you first start working in the oil and gas industry? What were your first impressions?I graduated from university with a degree in petroleum engineering in 1991 and immediately began working for Exxon. One of the things I really appreciated from the start was the focus on structured training and development. This is in fact a common theme among the major companies in our industry and in my case it helped me progress quickly and take on bigger responsibilities early in my career. Today, I think business and technical training for oil and gas professionals is better than ever.

How do you think this industry stacks up against others and why should young professionals (YPs) pursue it? What is Schlumberger in particular doing to ensure that younger staff and talent are retained?We compete with a lot of other industries for talented graduates and in general we stack up very well against them. This is not just because of the training I mentioned but also because of the important role we play in the global energy equation and the sheer size of the challenges that lie ahead. This is what has driven advances in technology across the oil and gas sector, making us one of the most high-tech and innovative industries to be part of.

In the case of Schlumberger, I think it is important to attract people who are clearly aligned with what we have to offer and who understand that a Schlumberger career is far from being a regular 9-to-5 office job. When we are out recruiting, we are very transparent about this, so there are no surprises for new employees after they join. Then we try hard to deliver on what we promise through our technical training, borderless careers, and diverse company culture.

What inspires you?I am inspired by Schlumberger’s history. It makes me want to continue the 80-year tradition of combining science, technology, and talented people to help solve our customers’ challenges. Also, when you see dedicated people on a daily basis who go out of their way to deliver excellence, it’s hard not to be inspired by their spirit.

Who has helped you the most in your career, and what lessons did you learn from your mentors? Do you have a role model you looked up to or took advice from?From a personal standpoint, my parents were a big influence on me. They were always very supportive and they taught me to leave nothing on the table when it comes to effort. My wife and kids have also been great. It can be a tough lifestyle with a lot of traveling and time apart from

your family but it helps when you know they are totally supportive.

From a professional standpoint, I have been working with great people throughout my career at Schlumberger. There is a lot of camaraderie and I continue to learn from them.

What are the main challenges and changes you see on Schlumberger’s horizon in the next 10 to 15 years?For the next 5 years or so our main challenge as a company revolves around execution. We have already invested heavily in our technology portfolio, our organization, and our infrastructure, so now it’s about bringing all this together to create value for our shareholders.

Longer term, we believe energy demand will continue to grow and the supply challenge will get even tougher. These are precisely the conditions under which Schlumberger has a lot to offer, and our future direction will be toward greater technology integration and increased levels of equipment reliability. This will be essential both in terms of future project economics and tougher operating environments.

How would you describe Schlumberger’s business model and how does it stand up against international oil companies (IOCs)

Chief Executive OfficerSchlumberger

7Vol. 8 // No. 1 // 2012

TWA Interview

when it comes to operating fields? How will this evolve in the future?In simple terms, we have three levels to our offering. The first is to sell individual services such as wireline logging. The second combines our individual services into an integrated package where we also take certain responsibility for coordination of services in the field. The third level, which we call project management, is where we take a more significant role in the management of the customer’s asset, as well as the overall scope of work. With each level, we are prepared to take on a higher degree of risk related to our operational performance in return for higher rewards when we exceed our customers’ expectations.

You can see from this that we are not very close to the traditional IOC model. However, we do share some of their capabilities, particularly on the production management side. We don’t want to own assets, but we are very happy to help optimize performance from a field management standpoint.

What do you expect will be the role of unconventional resources in the next 20 years and how can YPs contribute to fulfill this role? What should YPs be learning in the short term?Unconventional resources are clearly set to be a significant contributor to future energy supply not just in North America but internationally as well. However, we have a long way to go in building our understanding of the complex production mechanisms involved with shale oil and gas plays, each of which exhibits very different properties from more conventional reservoirs.

Our challenge today is to discover the underlying science behind these resources so we can build reservoir models that help us reduce economic uncertainty and increase production efficiency. I think that this gap in knowledge gives a particular opportunity

to YPs, who can apply their creativity and open-mindedness in a new direction.

Could you please comment on environmental concerns about the development of unconventional resources such as shale gas and bitumen?In the case of shale gas today, there is a significant amount of resource waste, whether in terms of proppant, water, or hydraulic horsepower. This increases the environmental impact and also requires a larger operational footprint. There is therefore a large economic and

environmental upside to the application of science and technology to developing unconventional reserves. In places like Europe, we are seeing legislation designed to push the industry toward a more efficient and environmentally sustainable approach and I would not be surprised if we eventually see the same trend in North America.

How would you describe Schlumberger’s culture? How important is your company culture in developing knowledge and new technology? The company culture is centered on our core values of people, technology, and profit. Our people are unique, and we have a truly diverse mix of nationalities at every level of the company. We also move people around quite a lot so they develop a strong global network of

friends and support. We trust YPs with a lot of responsibility from the beginning and we promote based on merit, so how you progress is based on abilities and performance. For technology, we are a community of scientists and engineers, all committed to solving our customers’ challenges. We invest more in R&D than anyone else in our industry and we see innovation and technology as key to maintaining our leadership position.

When you are recruiting someone to join your team, what qualities are you looking for? What would make someone stand out to you?I look for people who are motivated and ambitious, both for themselves and for the company. What makes people stand out is when they have both a “yes we can” attitude and a team mentality. I also like to see people be prepared to stretch themselves and be open to new ideas.

Have you had professional interaction with SPE in the past? Has your workforce had the opportunity to leverage company activities with SPE expertise? I regularly enjoy being involved with SPE. Recently I visited the Al Khobar chapter in Saudi Arabia and made a presentation outlining how we are going to create the next step change in drilling performance. As always, this was an interesting and energizing experience for me. If you consider the overall interaction between Schlumberger and SPE, I believe it is healthy and beneficial for both parties. SPE provides an excellent common meeting ground to network with other industry players and it allows a level of collaboration and knowledge sharing across the industry that would otherwise be difficult to achieve. For our technical community, SPE presents a forum within which to engage in technical discussion and gain recognition through publishing technical papers. This is a valuable opportunity many Schlumberger employees are happy to leverage on a daily basis. TWA

“In places like Europe, we are seeing legislation designed to push the industry toward a more efficient and environmentally sustainable approach...”

8

9,000 Tcf in coalbed methane, 16,000 Tcf in shale, and 7,400 Tcf in tight sands throughout the world. Rogner ranked North America as the top unconventional gas resource holder (25%), followed by the former Soviet Union (16%), and China (15%).

Because of the availability of conventional reservoirs outside the US, worldwide unconventional plays have largely been overlooked until recently, and in many cases, they had not been studied. Based on the US experience, the need and technical capacity to produce from these reservoirs around the world is likely to emerge in coming decades.

As long as the unconventional share in the world portfolio of hydrocarbon resources continues

“A game changer,” “a revolution,” and “a paradigm shift”—those are descriptions of the development of unconventional resources (UCRs) seen in the United States news media. The Wall Street Journal called unconventional gas plays “the biggest energy innovation of the decade.” For young professionals (YPs), UCRs provide the opportunity to grow with a field destined to lead the industry in the future.

Unconventional oil and gas is a term used to describe production reserves that cannot be obtained using historical recovery methods. Oil reserves have become more difficult to extract as a result of location, depth, and formation. Therefore, the need for new technology and methodologies grows with every completion. Shale gas, heavy oil, bitumen, and increasingly deep gas fields are examples of unconventional oil and gas. The economics of retrieving unconventional oil has been a concern in the past, but new technologies and the decrease in conventional oil have created an economic opportunity for UCRs.

How Big Is the Pie?

The US Energy Information Administration (EIA) estimated that technically recoverable shale gas resources jumped by 134% in 2011 (EIA 2010; 2011a). According to the EIA, shale gas produced 2.3 Tcf of natural gas in 2008, an 11% share of the natural gas market (2011c), and it is expected to

Unconventional Oil and Gas ResourcesNew Challenge for the Industry, Great Opportunities for YPs

Forum

Anton Andreev, Sakhalin Energy, and Tyler Roberts, Baker Hughes

produce 12.3 Tcf by 2035, a 47% share of the market, with production growing at more than 5% per year (2011a).

According to the World Shale Gas Resources study conducted by EIA (2011b), China has the largest shale gas resources of the 32 countries reviewed, at 1,275 Tcf or 19.3% of the estimated world supply. The US has 861 Tcf of shale gas (13%), and Argentina holds 774 Tcf (11.6%), followed by Mexico (10.3%), Australia (6%), and Canada (6%). The study quotes 6,622 Tcf for total shale gas resources, which is almost equal to the world’s proved natural gas reserves.

Kawata and Fujita (2001) quoted Hans-Holger Rogner of the International Atomic Energy Agency, who estimated gas resources of

44%

21%

No, I don’t have any experience in this area.

Yes, I do have some experience in this area.

Yes, I do have significant experience in this area.

36%

Do you have any experience in unconventional resource

(URC) development?

FIG. 1*

FIG. 2

If choosing between two job opportunities, which would be your first choice, assuming all other conditions are the same?

25

15

10

5

0

24%

33%

5%

13%

25%

The one related to conventional oil resources development.

The one related to conventional gas resources development.

The one related to unconventional oil resources development.

The one related to unconventional gas resources development.

Does notmatter.

% o

f res

pond

ents

* Chart totals may vary slightly from 100% because of rounding.

9Vol. 8 // No. 1 // 2012

Yes, I feel myself adequately equippedand educated for such a job.

Yes, I feel myself somewhat ready to take upon that kind of job.

I’m ready in general. Some minor transition period might be required though.

I’m not ready yet. It would require some significant efforts from me.

Do you feel yourself ready fora UCR development job?

FIG. 3

44%

20.7%26%

24%31%

18%

Gerco Janssen, reservoir performance manager at Shell Canada’s Groundbirch operations and a petroleum engineer for 15 years, said there is no fundamental difference between unconventional and conventional resource development “from a reservoir engineering perspective. The permeability is lower, but it is still gas or oil flowing through pores.” The current focus of Groundbirch is on the Montney reservoir, an unconventional siltstone reservoir containing sweet gas in northwestern Alberta and northeastern British Columbia.

“In unconventional gas, there is much more emphasis on decline-curve analysis and analyzing single well models,” he said. “There will be very little full field simulation modeling. As a reservoir engineer, you will have to become more familiar with completion (fracturing) techniques. So you could say that as a reservoir engineer, you move closer to the production technologist and a bit further from the geologist.”

Mark Geluk, principal regional geologist for unconventional gas projects at Shell with more than 25 years in petroleum exploration, said the evaluation method used in unconventional exploration has a completely different focus than that used in conventional plays. “In conventionals, you want to prove hydrocarbons in a small area/structure, but in unconventionals the focus is on regionally extensive hydrocarbon occurrences,” he said. “All bits of the story have

To give some perspective on the development of unconventional

resources (UCRs), several industry leaders shared

some of their thoughts on the rapidly expanding field.

to grow, industry professionals will have to ask whether we are ready for this “revolution.” Undoubtedly, “revolutionary thinking” is required and several paradigm shifts will occur during the journey, with the clear need to challenge the basics of petroleum engineering. UCR development presents the challenge and opportunity of the unknown. Experience is key, but fresh, new ideas will drive the future.

SPE YP Members Speak

A survey was conducted during the third quarter of 2011 among 90 SPE YPs and student volunteers from various locations and covering a range of disciplines, with the key emphasis on what UCR development will bring to YPs.

When respondents were asked about their experience in UCRs, 44% said they have no experience; 21% said they have significant experience; and the remainder said they have some (Fig. 1).

Notwithstanding the relatively low experience level, 57% said they would pick UCR development given a choice between two job opportunities, assuming all other conditions are the same (Fig. 2).

Only a total 26% of the survey group said they felt adequately equipped and educated to perform a job in UCR development, while 55% said they were somewhat ready or would need a minor transition period and the remainder said they were not ready (Fig. 3).

Concerning training at the university level, only 1% of respondents said that most petroleum engineering departments have adequate programs to fulfill the upcoming demand for UCR development engineers. More than half, 57%, responded that programs require updating, split almost evenly between those saying that a minor update was needed (28%) and those saying that programs were obsolete and required a major update (29%). The rest of the survey respondents, 42%, said that most university programs are generic and equip graduates with an absolute minimum, with most learning occurring at the workplace (Fig. 4).

On the availability of professional training in UCRs, just 7% of respondents

Industry Leaders Give Views on

Unconventional Resources

»

Are university graduates adequately trained to fulfill the upcoming demand for engineers in UCR development?

50

40

30

20

10

0

42%

29%28%

1%

Most of the petroleum engineering departments have adequate programs in place.

Most of the programs wouldbenefit from a minor update to cover the aspects of URC development.

Most of the programs are obsolete when talkng about their application to URC development—major update required.

Most of the university programs are generic and equip their graduates with an absolute minimum. The main learning happens at the workplace.

% o

f res

pond

ents

FIG. 4

10

Forum

said that the needed training courses are widely available and well designed, and 66% said that courses are available to a limited extent (56%) or that there is a clear lack of courses (10%). The remaining 27% said that training courses are widely available, but their quality suffers from a lack of industry experience in UCRs (Fig. 5).

The survey results are encouraging because they show an eagerness by YPs to enter the UCR area. As training and education methods improve, YPs will be capable of contributing sooner to a field that represents so much of the future of the oil and gas industry. TWA

to tie together—geochemistry, maturity, and richness of the source rock sitting next to poor reservoir rocks at the right time.”

Optimal Fracture Stimulation

Joe Dumesnil, a petrophysicist and geologist on the China technology team at Halliburton, said that stimulation petrophysics is a new way of thinking about unconventional reservoirs. His focus is on reservoir characterization related to stimulation and unconventional well operations. “In conventional reservoirs, the storage capacity and flow capacity are typically related, as evidence[d by] the many porosity/permeability relationships that have been proved over the years,” he said. “This enables reliable production forecasting for a field once in development. Unconventional reservoirs, shales, tight gas, or coal beds/seams are limited by our ability to optimally fracture stimulate them.”

Usman Ahmed, vice president and chief reservoir engineer for reservoir themes and solutions at Baker Hughes, said, “In conventional development, a uniform process of drilling, completion, and production methodology can be applied. In unconventional resource development, there is no uniformity, and the various steps can and will vary from well to well, acreage to acreage, and basin to basin. Some say that the use of stage-based hydraulic fracturing is also a differentiator, as it is a must to attain commercial production.”

Janssen said that petrophysics is the discipline that struggles most with the tight sands. “I do not think the industry has the correct downhole tools to measure our reservoir properties yet,” he said.

Dumesnil agreed: “Lithology is more complex. ... Things get smaller. Permeability is negligible, and porosity can be micro, nano, or inside kerogen. In shales, we see thin beds or drastic vertical heterogeneity. Our current vertical resolution tools fail to show an accurate representation of these properties.”

New tools are emerging to prove or crack new plays. Among them are gamma spectroscopy and dipole sonic and image tools, with diagnostic fracture injection tests as critical measures, Dumesnil said. He also emphasized the need for stimulation-related core analysis to help understand formation sensitivity

to fracture fluids and drilling fluids, and the potential for proppant embedment.

Knowledge and Technology Gaps

Ahmed noted several knowledge or technology gap areas for UCRs, including geophysics for microseismic and developmental exploration, geochemical analysis for carbon content and its impact on producibility, discrete fracture network modeling, and identification of fracture distribution.

Ahmed identified clear-cut geophysical evaluation as the major “enabler” for progressive UCR development. The consistency of parameters for sweet spot identification, reservoir maturity, rock elasticity, and the effects of natural fractures are the target areas for research, according to Ahmed.

Geluk mentioned “availability of service industry (e.g., rig crews, fracturing units)” and “issues related to the intensive operations, water/air pollution, availability of water for fraccing.”

Janssen noted environmental issues and recovery efficiency as major obstacles. “The impact and footprint of the development—thousands of wells!” he said. “You need the land and community and government buy-in. The cost of the development is another threat—many wells with very small ultimate recovery per well.”

James Curtis, director of business development for pressure pumping at Baker Hughes, stressed that the standard way of thinking will not keep companies competitive in the UCR market. “UCR development requires relentless and continuous pursuit of operational efficiency and reduction of TCO. Because of the economy of scale associated with the ‘factory’ type of UCR operations, compared with conventional oil and gas extraction, radically different logistical and operational procedures are likely to emerge—requiring new types of equipment or technologies. Each area of an ongoing UCR operation must be continuously, carefully scrutinized, and any elements that do not add value must be eliminated or replaced with alternative methodologies or technologies.” For years, engineers have looked for different solutions to the same questions. Focusing on UCRs means the questions are changing, but today’s YPs are embracing the challenge. TWA

ReferencesEIA. 2010. Annual Energy Outlook. Report

No. DOE/EIA-0383(2010), US DOE, Energy Information Administration (April 2010).

EIA. 2011. Annual Energy Outlook. Report No. DOE/EIA-0383(2011), US DOE, Energy Information Administration (March 2011).

EIA. 2011. World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States, US DOE, Energy Information Administration (April 2011).

EIA. 2011. Natural Gas Gross Withdrawals and Production, US DOE, Energy Information Administration (October 2011).

Kawata Y. and Fujita K. 2001. Some Predictions of Possible Unconventional Hydrocarbon Availability Until 2100. Paper SPE 68755-MS presented at the SPE Asia Pacific Oil and Gas Conference, Jakarta, 17–19 April 2001. http://dx.doi.org/10.2118/68755-MS.

How would you describe the availability of professional

training in UCR?

44%

20.7%

56%27%

10%7%

FIG. 5

Training courses in this area are widely available, but quality suffers from lack of experience in the area.

Training courses in this area are available to a limited extent.

Training courses in this area are widely available and well designed.

There is a clear lack of training courses in this area.

11Vol. 8 // No. 1 // 2012

Extracting Natural Gas Through Desorption in Shale ReservoirsJitendra Das, ONGC Mehsana

Tech 101

Jitendra Das is an executive engineer (reservoir) at Oil and Natural Gas Corporation in India. He also worked as a senior production engineer for 3 years at Reliance Industries in India. Das is an active member of the Indian Science Congress Association, the Indian Institute of Chemical Engineers, and SPE. He has worked in a number of research and development projects with the Institute of Reservoir Studies, the Institute of Oil and Gas Production Technology, and the K.D. Malaviya Institute of Petroleum Exploration. Das received a BS degree in

chemical engineering from Biju Patnaik University of Technology in India.

Shale gas is defined as natural gas occurring in shale formations. It is an unconventional energy resource, which has become an increasingly important source of natural gas globally and has the potential to grow as a major energy source in the next decade. However, production of shale gas remains technically and economically challenging.

Shale acts both as source rock and reservoir rock. Having high total organic content and falling in the gas window (302°F–392°F), shale has sufficient potential to generate huge amounts of natural gas. Generally, natural gas is stored in a shale matrix, which is highly porous but has very poor permeability. This makes it difficult for gas to move into the wellbore. Gas production in commercial quantities requires the presence of fractures to provide permeability. Some shale formations have natural fractures, which act both as storage space for natural gas and as a transport medium from the matrix interior to the wellbore. The recent boom in shale gas production was made possible by the application of hydraulic fracturing, which creates extensive artificial permeable fracture paths in the shale matrix—acting as highways for natural gas transport to the wellbores.

The storage mechanism of natural gas within the shale matrix is complex. Approximately 15% of the gas produced is held in natural fractures and some in pore spaces. The remaining 85% of the gas is stuck to the shale matrix by a process called adsorption. Wellbore production of adsorbed shale gas is enabled by the process of desorption, which occurs with reservoir pressure reduction. Many recent works suggest that desorption of the adsorbed natural gas may significantly affect the production behavior of gas wells. Previously, adsorption was considered an unconventional mode of gas storage and the effects of gas desorption

were usually ignored in conventional reservoir engineering.

Major shale gas producers in the United States include the Barnett Shale in north central Texas, the Fayetteville Shale in northern Arkansas, the Haynesville Shale in northern Louisiana, the Marcellus Shale in Pennsylvania, the Woodford Shale in Oklahoma, the Eagle Ford Shale in south Texas, and others.

Generally, there are two types of adsorption processes:

• Physical adsorption or van der Waals adsorption. Primarily, gas is stored by the process of physical adsorption. Natural gas is adsorbed on the organic matter present in shales and in some cases on certain clay minerals. Physical adsorption is the result of intermolecular forces of attraction between clay particles and natural gas and is a readily reversible phenomenon. The intermolecular attractive forces between clay particles and natural gas is greater than those between gas molecules themselves, so gas condenses on the surface of the solid (clay particles) even though its pressure may be lower than the vapor pressure corresponding to the prevailing reservoir temperature. When the adsorbed substance (natural gas) remains attached to the clay surface, the partial pressure of the adsorbed substance equals that of the contacting gas phase. The natural gas attached to the matrix can be removed or desorbed by lowering the pressure of the gas

phase or by increasing the temperature of adsorbed gas.

• Chemical adsorption or chemisorption. Chemisorption or activated adsorption is the chemical interaction between the gas and the adsorbed substance. Here, the adhesive force is generally much greater than that found in physical adsorption, and a large amount of heat is also liberated. This means that there is little chance of chemisorption of natural gas in the shale matrix. Also, the process is frequently irreversible and on desorption, the original substance undergoes a chemical change. Therefore, chemically adsorbed natural gas cannot be produced in its original form. We should thus limit our focus to physical adsorption.

Shale mineralogy plays a great role in determining the amount of gas that is physically adsorbed to shale surfaces. Because most of the shale gas reservoirs are isothermal in nature, temperature has little effect on desorption, whereas pressure plays a dominant role. This type of adsorption/desorption process can be explained by the Langmuir, Brunauer-Emmett-Teller, and Freundlich isotherms.

Shale gas is an important unconventional energy source for our future needs. Commercial production of shale gas began in the past 10 years. The first commercial shale gas production was realized from the Barnett Shale by Mitchell Energy. The breakthrough technologies that stimulate shale gas

Continued on page 13

12

Economist’s Corner

Unconventional Shale Resources: Economics, Regulations, and PoliticsW. John Lee, University of Houston

W. John Lee is known for his publications and presentations on oil and gas reserves regulations, and estimation and production forecasting in unconventional gas reservoirs. He served as an engineering fellow with the US Securities and Exchange Commission (SEC) during 2007–2008 and provided technical assistance to the SEC in its modernization effort on reserves reporting rules. He is the author of three textbooks published by SPE. Lee was elected to the US National Academy of Engineering in 1993, the Russian Academy of Natural Sciences

in 2006, and the Georgia Institute of Technology’s Academy of Distinguished Engineering Alumni in 1994. He became an honorary member of SPE/AIME in 2001 and was awarded the SPE/AIME DeGolyer Distinguished Service Medal (2004), the SPE/AIME Anthony F. Lucas Technical Leadership Gold Medal (2003), the AIME Mineral Industry Education Award (2002), and the SPE Reservoir Engineering Award (1986). He is a past member of the SPE Board of Directors and was an SPE Distinguished Lecturer. He is a tenured professor and holds the Hugh Roy and Lillie Cranz Cullen Distinguished University Chair in petroleum engineering at the University of Houston.

Shale resource development activities have been in the headlines for the past several years in the world media, especially in North America. It is tempting to think that developing a shale play is a matter of obtaining acreage, applying the latest in horizontal well drilling and multistage fracturing, and monitoring handsome produced gas volumes. Unfortunately, like most other business investments, it is not that simple. There are three constraints: economics, regulations, and politics.

EconomicsWith today’s depressed natural gas prices, the development of shale gas can be economically marginal in the near term. The more attractive prices for hydrocarbon liquids generate more interest in shales that produce oil or substantial amounts of condensate. In either case, typical shale development projects require large up-front costs for land and acquisition of geoscience information, resulting in large negative cumulative cash flow positions well into the life of the development program. Though a company might believe that there is little question about the presence of economically producible hydrocarbons over huge areas, it may be quite difficult to attract, in a timely manner, the investment capital required to develop these resources because of regulations and politics. Investors are much more interested in “proved” reserves than in alleged “unproved” reserves or in “contingent” or “prospective” resources. Unfortunately, disclosing proved reserves consistent with both US Securities and Exchange Commission (SEC) regulations and operator perceptions about economically recoverable

hydrocarbons—to attract the investment capital—is an involved process.

RegulationsSEC Reporting Requirements. The SEC modified its reporting requirements in late 2008, effective for reserves disclosed in filings with the commission on or after 1 January 2010. Two important changes affected companies that develop resource plays, including shales. First, the SEC changed its criterion for proved reserves in undrilled locations (at least beyond immediate offsets to existing, economic producing wells) from “certainty” to “reasonable certainty.” Few items in petroleum reservoirs are “certain,” so there were few disclosures of proved undeveloped reserves (PUDs) beyond one offset under the previous SEC reserves reporting regulations. Now, much larger volumes of PUDs can be disclosed in good conscience.

Second, the SEC changed its rules-making philosophy. The new rules

follow a trend in administrative law from “rules-based” to “principles-based” regulations. In a rules-based system, the focus is on prescribed methodology that must be used to reach a conclusion (such as reserves volumes). If standard procedures are used, then the result is, by definition, acceptable. In a principles-based system, the focus is on the results, not the methodology used to obtain the results. If the results meet reasonable evidentiary standards, then they should be acceptable. The filer can thus use a wide variety of procedures that meet broad criteria of acceptability in obtaining results.

As an important example, the SEC implemented a principles-based system in its modernized rules for oil and gas reserves reporting by introducing a method called “reliable technology.” Broadly speaking, decisions in the oil and gas reserves estimation process based on reliable technology are acceptable under the new rules. Reliable technology is a set of measurements and/or computational methods that have been demonstrated empirically in the field (usually by drilling results) to lead to proper conclusions consistently. For proved reserves, this means that technologies that more often than not (e.g., at least 90% of the time for a statistically valid sample size) have been shown to lead to determinations that certain volumes (or more) will be

13Vol. 8 // No. 1 // 2012

produced when a drilling program is implemented can be considered reliable.

Practically, if operators can develop a methodology allowing them to predict with reasonable certainty that certain volumes of hydrocarbons in undrilled locations will ultimately be produced, then they will have satisfied the modernized oil and gas reporting requirements. Note this says nothing about how far from existing economic production the undrilled locations must be located. Instead, the requirement is for empirical evidence that past decisions to drill, based on the technology, have led to economic production at the distances from existing production demonstrated by the reliable technology to be appropriate.

Implications. The implications for producers and potential investors are significant. If a producer can satisfy the conditions of the rules for significant amounts of undrilled acreage and thus disclose significant volumes of proved undeveloped reserves, then investors will have incentives to place a higher value on the undrilled acreage than if operators could disclose only “probable” or “possible” reserves for much of the acreage, or if the resources had to be classified as contingent or prospective. Resources so classified tend to be discounted steeply in the market.

To prevent perceived potential abuses of reserves reporting requirements under the new rules, the SEC established a rules-based guideline: Reserves development projects must ordinarily be implemented within 5 years of booking as proved undeveloped reserves; if this 5-year rule is not included as part of an approved development plan, any reserves based on drilling in later years are likely to be disallowed by the SEC. The SEC allows exceptions to the rule for good cause—for example, in offshore development projects or projects in remote and difficult locations. However, few exceptions appear to have been granted for onshore North American resource development projects.

A clash of beliefs thus ensues. Operators often believe they have persuasive evidence that economic

production is highly likely to exist on acreage so large that it cannot be drilled with available rigs and stimulation capabilities in less than 15 or 20 years. On the other hand, regulators appear to believe that the vast majority of resource play wells that cannot be drilled within 5 years cannot be considered to have proved reserves, and resources to be drilled beyond the time window must be placed in a lower certainty reserves category or resource classification. As a result, investor interest in resources to be developed beyond the 5-year window would be diminished.

PoliticsPolitics also plays an important role in the development of resource plays. The industry needs to recognize an inconvenient truth: There are groups that would prefer fewer drilling activities of any kind in the future and that the United States and the world should concentrate instead on alternative forms of energy. They have found that some regulators could be won over and that regulations at the national level (beyond the SEC in the US) and the local level could slow or stop resource plays. For example, more stringent regulation of hydraulic fracturing and water use appeals to large segments of the public in parts of the US.

There have been claims that reserves in shale plays have been significantly overstated by operators, and these have been publicized in media with large, influential audiences. When these audiences include prominent elected officials, our expectations must be realistic: There will be audits of reported reserves. These are, in fact, under way in North America.

Action ItemsDespite their potential positive impact on energy supply to North America and the world, unconventional resource developments face significant economic, regulatory, and political hurdles. This is the real world in which we operate, and we must respond positively to these obstacles. Some actions we can take include the following:

• Ensure that our reported proved reserves are the most accurate estimates

that we can reasonably produce. A simple test of our procedures, found in the modernized SEC rules, is this: Estimated ultimate recovery for a given group of wells should remain constant or increase much more often than not. Those who disagree are not going to vanish, nor will audits or attempts to make regulatory requirements more stringent. To prevail, our positions must be based on solid evidence rather than on emotion. Operators found to have overstated reserves in the objective audits will give the entire industry a black eye.

• Produce more persuasive arguments that locations established with reliable technology, but that cannot be drilled within 5 years, should be granted exceptions to the rule under reasonable conditions. This is consistent with the SEC’s mission to protect investors and to promote efficient capital creation.

• Keep in mind that the public may not accept our positions initially. We would do well to present our facts and evidence to open-minded individuals. When we convince enough individual people that the facts are on our side, success in persuading larger groups will come much more easily. TWA

Tech 101... Continued from page 11

reservoirs and have reshaped economic profitability are horizontal well drilling and multistage hydraulic fracturing. Hydraulic fracturing creates paths for gas migration from reservoir to wellbore and simultaneously enhances desorption of natural gas from shale surfaces. A closer investigation of desorbed gas release and long-term well productivity will give a clearer picture for putting greater numbers of shale gas wells into production.

Shale gas production cost stands at USD 5 to USD 6 per MMBtu, which is slightly higher than conventional gas production. Today, 20% of total gas consumption in the US is shale gas. Based on today’s shale gas recoverable reserves and present rate of production, it is likely that this unconventional energy source will ramp up and be capable of meeting energy needs over the next 100 years. TWA

Economist’s Corner

14

Pillars of the Industry

Meeting Tomorrow’s Energy Needs,Minimizing Environmental Impact

Kishore K. Mohanty, University of Texas at Austin

eeting the growing global energy need is the biggest challenge

for humankind in the 21st century. Worldwide energy consumption in the year 2001 was 404x1015 Btu (~200x106 BOEPD). World population is increasing along with per capita income, especially in developing countries such as China and India. Because energy use increases with income, energy consumption is expected to triple in this century.

As of 2000, oil accounted for 39% of all energy use; gas and coal provided 23% and 22%, respectively. Renewables (e.g., solar, wind, hydropower, biomass, etc.) and nuclear energy sources supplied about 7% and 9%, respectively, of the world’s total energy consumption. Electricity from solar energy costs about USD 314/MWh compared with about USD 41/MWh from gas. Concerns about the safe disposal of radioactive material are limiting the building of nuclear fission reactors. The role of renewables is very important in the long-term energy mix, but is not expected to increase much in the next 20 to 50 years, barring some major technological innovation in these fields. Because of these economic, environmental, and technological limitations, fossil fuels—oil, gas, and coal—must meet most of the increasing demand.

The three major sources for future oil and gas production are residual oil, deepwater reservoirs, and unconventional resources. In the past 150 years worldwide, we have produced a conservatively estimated 2.5 trillion bbl of oil. For every barrel of oil produced, we have left behind about two barrels in the reservoirs. That oil needs to be produced to meet future demand. Most onshore and shallow marine regions are highly explored. But many reservoirs are buried in deep oceans, especially below the salt layers, thus making them difficult to identify by seismic logging. A

significant amount of oil and gas may be lying in these reservoirs. Unconventional resources include the Athabasca tar sands in Canada, kerogens, shale oil (e.g., the Bakken formation in the United States), hydrates in marine sediments and the Arctic, and shale gas resources (e.g., the Marcellus Shale in the US), to name a few.

Burning fossil fuels leads to carbon emission into the atmosphere. There is significant uncertainty in global atmospheric carbon data, which estimate that CO

2 presence has fluctuated

between 200 and 280 ppm for the 400,000 years before the Industrial Revolution and has increased since then to 370 ppm. Global carbon emissions can be slowed by sequestering the CO2 emitted by fossil fuel use. The CO2 can be injected into deep aquifers, depleted oil and gas reservoirs, hydrate reservoirs, and coal seams. In fact, injection of CO2 into depleted oil reservoirs both increases residual oil recovery and sequesters CO2 at the same time. It is important for the energy industry to balance the need for increased fossil fuel production while ensuring that care is taken to protect our environment.

Enhanced Oil RecoveryThere are several techniques to enhance oil recovery beyond that achievable with conventional techniques of pressure depletion and waterflooding. Chemical flooding involves injection of ions, surfactants, and polymers to reduce the residual oil saturation, change the wettability, and increase the sweep. These techniques are more expensive than waterflooding, but economical at current oil prices (~USD 100/bbl). Chemical flooding has been applied commercially only in a few fields (e.g., Daqing, China); however, many field tests are being conducted.

Miscible f looding involves injection of high-pressure gases (e.g., CO2, hydrocarbon gases) that mix with oil and mobilize it. If the pressure is high enough, miscibility (mixing in all proportions) occurs. The key problem is sweep efficiency. Water-alternating-gas and foam-injection schemes are being developed to improve the sweep efficiency of these processes. Miscible flooding has been applied successfully in west Texas and Alaska because of the availability of inexpensive gas. If CO2 sequestration becomes a reality, more gas will be available for miscible flooding.

Thermal techniques involve steam injection or in-situ combustion with oxygen or air. These processes are being developed with horizontal wells. Steam processes have been applied extensively in some fields; in-situ combustion techniques have been applied only in pilots. The key issues are vertical permeability and control of the combustion fronts.

Microbial techniques involve injection of microbes or nutrients for in-situ microbes that can secrete polymers or surfactants to block pores or reduce residual oil saturations. A few pilot tests have been conducted; however, more reliable tests need to be developed before these processes can be commercialized. Applying enhanced oil recovery (EOR) techniques to highly heterogeneous and fractured reservoirs remains a challenge.

EOR techniques are more complex than pressure depletion and water injection. Physicochemical interactions between rock, brine, oil, and chemicals need to be understood. Engineering and operations personnel need to appreciate the complexity of the process and execute these techniques properly. They are often considered tertiary techniques, but need not be. The entire productive

What You Need To Know

M

15Vol. 8 // No. 1 // 2012

Kishore K. Mohanty is a professor of petroleum engineering at the University of Texas at Austin. He was the executive editor of the SPE Journal during 2001–2003 and won the Pioneer Award at the SPE Improved Oil Recovery Symposium in 2008. His research focuses on enhanced oil recovery, formation evaluation, improved fracturing, and nanotechnology. He received a BS degree from the Indian Institute of Technology, Kanpur, India, in 1976 and a PhD degree from the University of Minnesota in 1981, both in chemical engineering.


life of the field should be considered at the beginning of oil production, and the timing of each process should be determined from the standpoint of oil production maximization.

Deepwater ProductionMost newly discovered reservoirs are offshore. To minimize the cost and environmental footprint, the wells are going to be few, but extremely complex and have many laterals. Drilling such wells in deep and ultradeep waters, to increasingly greater depths below salt layers, is technically challenging. Because many branches connect to a single well, they need to be equipped with sensors and actuators and controlled remotely. Additionally, because the fluids come from several branches and undergo severe pressure and temperature changes while traveling from reservoir to platform, the fluid phase behavior must be studied and the formation of solids should be avoided. Because the wells are few, it is necessary to characterize the reservoir away from the wells. This is an important challenge for reservoir characterization specialists. As offshore developments are expensive, it is important to enhance the production rate and shorten the production time without sacrificing sweep and recovery.

Unconventional GasIn the past decade, hydraulic fracturing technology has advanced significantly to unlock vast deposits of shale gas. The permeability of shale gas reservoirs is in the range of 1 to 100 nanodarcies. Horizontal wells are drilled into these reservoirs and 10 to 100 fractures are created from the horizontal well to connect the pore space to the wellbore. This technique has helped operators get good initial flow rates out of these reservoirs, but long-term production remains uncertain. Conventional logging theories may not apply to these formations. Improved logging

and understanding of transport in these nanodarcy rocks can improve total gas recovery. In Arctic regions and underneath the seafloor, natural gas is often deposited in the form of hydrates. These reservoirs can be produced by depressurization and warm waterflooding. The issues are detection of high concentration regions and avoidance of gas leaks to the ocean.

Unconventional OilUnconventional oils include shale oil, kerogen (oil shale), and extra heavy oil. Shale oils are light oils trapped in very low permeability rocks. Horizontal wells with multiple fractures are being developed for primary production of this oil, but the maximum recovery is on the order of 5% of original oil in place. Techniques must be developed to go beyond primary recovery. Electrical and thermal methods are under development for kerogen deposits and extra heavy oils. Chemical and biochemical methods are being explored to upgrade heavy oils in situ.

CO2 SequestrationOil and gas drilling, completion, and production operations are particularly difficult in offshore environments. Remediation must be included in the planning stages to minimize potential environmental impacts. Large volumes of water are handled during production operations, and techniques must be developed for water reuse and safe discharge.

Another key learning field is CO2 sequestration. CO2 captured from power plants can be injected into deep aquifers, depleted oil and gas reservoirs, hydrate reservoirs, and coal seams. However, the systems must be developed to monitor for long-term migration of injected CO2 into the geological strata.

ConclusionsThe demands of EOR projects, production from ultradeep water and unconventional reservoirs, and mitigation of environmental impact require that today’s engineers learn the skills that they will need in order to succeed tomorrow. It requires broad knowledge of the fundamentals of reservoir science, drilling, stimulation, logging, and production engineering. Young professionals need to be knowledgeable about transport in porous media, physicochemical interaction of chemicals with rock, phase behavior of complex fluids (e.g., surfactants, polymers, nanoparticles, hydrates, asphaltenes, etc.), rock mechanics, electromagnetic properties, and chemical/biochemical reactions.

To optimize and control these complex processes, numerical models must be developed in multiple scales (from pore to reservoir scale), and sensors and control instruments must be installed downhole. Fulfilling the increasing global energy demand is one of the biggest challenges of this century, and young engineers must prepare themselves now to meet it. TWA

16


lthough unconventional resources contributed almost no production

in the early 1970s, they now provide almost 30% of US domestic natural gas supply. Unconventional reservoirs have a complex lithology with heterogeneous porosity, complex fluids, or both. Ultimate recovery is typically lower than from conventional reservoirs, so effective exploitation requires more wells to drain the resource effectively. Excluding product price, capital expenditures are a critical factor in the economics and have driven a development culture focused on cost, in the absence of technology that provides a clear cost benefit to increased production and/or recovery.

However, the exponential growth of production from unconventional reservoirs has not been accompanied by comparable growth in the knowledge and understanding of the rock properties and completion parameters controlling production. Significant variability in production performance within a small area of a play is still a reality that has not been fully understood. Therefore, the industry’s challenge is to identify, develop, and deploy technology that will change the existing workflows in unconventional exploitation by affecting one or more of the following: increased efficiency, recovery, and/or production, while reducing risk and decreasing the time for deployment.

Openhole measurement technologies, theoretically, should provide an understanding of rock properties in terms of reservoir quality—or the petrophysical parameters of organic shale that make them viable candidates for development—and completion quality—the geomechanical parameters required to effectively stimulate organic shales. These parameters should be calibrated with real, measured production information and data acquired during stimulation operations. However,

in North America, shale development has been marginally economical and one of the ways pursued to cut costs is by reducing and/or eliminating altogether open- and cased-hole measurements. Only 2% to 5% of total shale wells have reservoir- and completion-quality information and most have not been calibrated. Once the well has been drilled, the primary question is how much will the well produce?

What does that mean for the petrotechnical professional? The opportunities are vast, from working in a research and development center, to identifying the production mechanism for how gas moves within shales, to operational challenges, as we try to develop ways to create surface area downhole to maximize recovery from these reservoirs with less water and environmental impact. There is a need in the industry for technical skill sets with operators, service companies, research, and academia. Not only are oil and gas shales being developed in North America, but projects also are being pursued in places such as Argentina, Poland, Saudi Arabia, India, and China. We are going to have to do things differently if we want to be successful.

A New Definition EvolvesI am currently the global technical director of production for unconventional resources at Schlumberger. The word “unconventional” has had a resurgence in the past 20 years, evolving to mean more than the Webster definition of “eccentric and atypical.” The common use in our industry seems to be “not conforming to accepted rules or standards,” and based on that definition, I challenge you also to be “unconventional.”

Career paths going forward will be far from conventional. In the 1950s, an engineer or geologist, typically a white male, graduated from college

or university and went to work for an employer. The person typically planned on working 35 or 40 years and retiring from the same company. That is not the case today, as we see men and women with dynamic careers from around the globe working to grow and improve our industry.

One aspect of our industry that has become more conventional is the desire for employees to have work/life balance. In my opinion, after working more than 30 years, work/life balance is a bogus phrase. It really means trying to squeeze 100% effort into all areas of your life with a reduced time for each. The best piece of wisdom I have found was a comment by Sandra Marca in a TWA article (No. 1, 2010), who suggested detaching yourself from the cliché of “professional success meaning quick progression and a high position with big responsibilities.”

I have taken a less traditional career path than some of my colleagues. When I was asked to write this article, I was apprehensive that I did not represent a “pillar” in our industry. On paper, I probably look good. I have three degrees in petroleum engineering, and I am a technical director at the world’s largest service company. However, I felt like a fraud. I am not an expert at anything in particular, nor have I invented or developed anything of significance. But once I looked up the definition of pillar, I felt more comfortable with my contribution to the industry. I am a chief supporter of the petroleum engineering discipline from all angles, because I have worked in nearly all aspects of the industry, including operations, academia, technology, and management; however, it has not been a focused career rocketing to the top.

An Unconventional CareerI started my unconventional career in 1979, analyzing the then unconventional

Unconventional Resources and Unconventional PeopleValerie Jochen, Schlumberger

A

17Vol. 8 // No. 1 // 2012

Valerie Jochen’s professional career spans more than 32 years, during which she has been involved chiefly in reservoir description and production data analysis of unconventional resources. As a Schlumberger Fellow, Jochen holds the position of technical director in production for unconventional resources. She has worked for Superior Oil, Mobil Exploration & Producing, S.A. Holditch and Associates, and Schlumberger. Jochen serves on several industry bodies including the

Unconventional Resources Program Advisory Committee of the Research Partnership to Secure Energy for America, and a number of SPE committees. She is a registered professional engineer in Texas. Jochen received her BS, MS, and PhD degrees in petroleum engineering from Texas A&M University, where she has taught courses as an adjunct professor.


reservoirs of the Austin Chalk and Vicksburg in south Texas before returning to graduate school 11 years later. I now have a PhD in petroleum engineering on “Reservoir Characterization of a Coalbed Methane Openhole Cavity Completion Using Production and Pressure Transient Data,”—again unconventional and something about which no one except myself, my adviser, and maybe a few others at the time, really cared. I have taught at Texas A&M University, coauthored papers to educate the federal government, testified before the Texas Railroad Commission (that state’s regulator of the oil and gas industry) and the US Department of Energy on tight gas issues, and chaired various SPE committees and meetings.

None of this makes my name recognizable as an industry leader, but I do believe my accomplishments have helped our industry continue to progress. My favorite quotation regarding work is “Power lasts 10 years; influence not more than a 100.” I strive to make my contribution to our industry as one of influence and the satisfaction that

comes with it, and I encourage you to do the same.

So my advice is to say “no” when something threatens to upset your life balance between work and home, and then live with the consequences. Above all, do not quit. It takes determination on the part of the employee and requires flexibility on the part of the company to make it work.

Unconventional means finding your own definition of success and doing your best to achieve it. If I were to go to my class reunion to see who is successful, it would be easy to identify the person who is second in command at a major oil and gas company, the one who is the CEO of a midsize independent company, or the one who retired wealthy at age 50. What about the seemingly average person still toiling away as an engineer?

The future is unconventional and there are numerous opportunities for a fulfilling career. But remember, if you are neither happy at work nor happy at home, it does not matter if you have accomplished everything on the “to do” list. You may not be successful in life, and is that not what it is all about? TWA

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Christopher Jenkins, Devon Energy

SPE 101

What the Best YP Committees Are Doing Now

E ach year, dozens of SPE members and a handful of SPE sections are

recognized for their efforts to help the society fulfill its mission, which can be briefly summed up in two parts:

• Effective collection and sharing of technical knowledge

• Promotion of technical and professional competence among the membership

Everything else we do in SPE (conferences, fundraisers, socials, outreach, etc.) is secondary to these two primary goals.

What makes award winners stand out from the crowd? This year I was fortunate to be a member of the judging committee for the Outstanding YP Committee Awards. Two dozen committees submitted applications, which contained many examples of creative solutions (and plenty of hard work) YPs employed to achieve remarkable outcomes. Even though one section can’t take on every ambitious initiative, it’s worth knowing of a few your section might wish to duplicate or modify to meet your local needs. Here are a few highlights:

Technical Knowledge—A number of YP committees hold a monthly YP meeting in addition to the monthly general section meeting. Some are special sessions. Some committees, for example, go on field trips, while others hold their own multi-day workshops for summer interns. Four European committees worked together to organize a major technical series led by YPs. The Italian Section broadcasts its events as webinars, complete with questions and answers from both the live and digital audience.

Staying Connected with YPs—Most sections use some combination of email, physical mail, posters, and flyers to contact YPs. A few others use bulk text messaging, Facebook, Twitter, and LinkedIn. Brazil has also kicked off a podcast program. Many sections have a “company champion” program with a

person (YP, established professional, or executive) promoting SPE events from within companies. For its social events, the Delta YP Committee encourages mixing YPs and the general membership to promote mentorship.

Soft Skills—The Calgary YP Committee held bimonthly soft skills lunch-and-learn sessions. The Vietnam YP Committee organized a “Soft Skill Day,” complete with office- and field-based speakers and oilfield-related games to teach the importance of teamwork and effective communication. To help its members gain a better understanding of the world of human resources (HR), the San Joaquin Valley YP Committee organized an HR dinner, with a panel of professionals available to answer members’ questions. The Gulf Coast YP Committee helped students develop skills in résumé writing and interviewing, including mock interviews and résumé critiquing.

YPs and the Section Board—The Netherlands Section ensures that at least one YP and one student serve on each of the section’s committees. In many sections, YPs serve on the general section board.

Membership Growth—The Mumbai YP Committee has been actively networking to help their section grow—and they added 50 new YPs in the last year. Giving away petroleum engineering books and presenting new members with an SPE polo shirt are ways the Brazil and Vietnam sections have generated enthusiasm.

New and Unique Events—The Gulf Coast YP Committee awarded prizes to members who attended the most events, held an SPE women’s event, and a first-ever painting class as a social event. A game of “Networking Bingo” was a creative way the Calgary Section used to encourage people to meet and learn about other members in their group (e.g., “Find someone born in December,” “Find someone who has been to Paris”). The London YP Committee organized

an event with YPs and members of the Houses of Parliament to discuss careers in the petroleum industry. For interns new to the city, the Oklahoma City Section held a “Passport to OKC” event to help them get to know the town better and participate in the local community. The Permian Basin YP Committee had an end-of-year event to which all the past year’s speakers were invited, giving an extra opportunity for questions and networking with experts.

Overcoming Challenges—By offering an incentive to members who refer a speaker or suggest a topic to their committee, the Dallas Section ensures ideas are kept fresh. The Gulf Coast YP Committee created a formal YP governance document to describe roles and responsibilities, and ensure continuity from year to year. The Netherlands have organized an “Umbrella Committee” with representatives from all the local student chapters. Having university representatives gather together has fostered more efficient communication and better exchange of best practices. The Permian Basin YP Committee gained support for YP participation in SPE events by inviting local company executives to present leadership and career talks. Having demonstrated value to the executives, these leaders now “officially” encourage YPs to participate in SPE events.

There are literally dozens more great practices that could be shared if we had the space. For a complete listing, visit the YP Network (www.spe.org/go/ypn) and look in the Shared Documents folder for “Best Practices.”

Remember, we aren’t listing these in TWA just for information’s sake—the idea is for you to get inspired and help your own section achieve SPE’s mission using these ideas or others you dream up. If you aren’t serving on a committee but want to see something done, then volunteer and make it happen! The sky’s the limit, and SPE has resources available to help you. If you want more details about any of the items mentioned, need contact information for the various sections, or have other queries, you can contact SPE’s young member programs manager James Roberts at [email protected]. TWA

19Vol. 8 // No. 1 // 2012

HR Discussion

Unconventional Job Hiring for Unconventional Resources DevelopmentMike Maneffa and George Alameda, Chevron

Unconventional resources are those that were bypassed by conventional oil and gas recovery technologies for decades because they were not considered economically feasible to produce. Improvements since the early 1990s in geophysical and geochemical exploration and in drilling and completion technologies have opened up vast new resources both onshore and offshore.

Some unconventional resources are in hostile or challenging environments such as the Arctic tundra or deep water. Others are in regions that have not previously experienced extensive oil and gas development and thus lack infrastructure and community and political support. Unconventional resources encompass tight oil and gas formations, shale gas, coalbed methane, heavy oil, oil shale, deep and ultradeepwater plays, and gas hydrates. Each of these types of play requires unique strategies and expertise to develop them. Hiring geoscientists and engineers for unconventional projects has never been more daunting.

TWA’s Human Resources (HR) Discussion Team had a roundtable discussion on unconventional resources, HR requirements, and career development strategy with two experts in unconventional resources development and resourcing—Mike Maneffa and George Alameda of Chevron. The following are excerpts from the discussion:

Tell us about yourself. What were some of your early career experiences and major decisions that influenced your career?

MM: I received my BS degree from Texas A&M University in 1985 and an MS degree from Stanford University in 1987—both in petroleum engineering. I

joined Chevron in 1987 as a production engineer in Bakersfield, California, and held numerous engineering, operations, planning, and supervisory positions in Bakersfield, New Orleans, and Houston. Before my current position, I was the shale gas team leader for Chevron’s Midcontinent/Alaska business unit where I led a team on subsurface evaluation of the successful acquisition of Chief and Atlas Energy acreage in the Marcellus Shale. I am currently the shale gas asset class manager for Chevron’s Energy Technology Company.

Some of my best career experiences were in the small field offices of Bakersfield, working closely with operations on rod pump optimization and steamflood management. Early in my career I decided to expand my horizons and try different assignments that were sometimes outside my comfort zone. These included gas coordination, upstream recruiting, business planning, and facilities engineering.

GA: My early career included a variety of different assignments. I started out as a research chemist with a degree in math and physics. Although I didn’t have an engineering degree, Chevron allowed me to cross-train in petroleum engineering. This strongly influenced my decision to leave the lab and pursue a career in reservoir engineering that led to management positions in reservoir management as well as information systems.

Unconventional resources such as coalbed methane, shale gas, oil shale, and heavy oil are new areas for big oil majors. How do you think the unconventional industry will shape out in the future? What will be

the key drivers? Do you expect new unconventional majors will rise or will current oil majors also come to dominate the sector?

MM: I believe shale gas will become a major energy source globally. The independents defined shale gas in North America, but the majors are taking the lead globally. Many current major integrated oil and gas companies are exploring for shale gas around the world, and I see them continuing to have a big presence in this space in the future. The successful shale gas players of the future will be able to do the following:

• Quickly assess large acreage holdings and focus on the better parts of the resource.

• Develop the resource in an environmentally and socially responsible manner.

• Apply the right technologies to improve production and cost performance.

• Maintain discipline in driving costs out of the system.

GA: I believe the current field of smaller independents will eventually yield their assets to the major players. In my view, the cost of development and the organizational capability required to bring unconventional resources to market are beyond the scope, scale, and capability of the leading independents. Their investors will be handsomely rewarded for their efforts, but in the end I believe the majors will bring the resources to production. I think the key drivers will be access to capital, the skills to manage major capital projects, and the presence of technical talent to staff the big projects. Technology development will be shared between the service companies and the majors. Our contribution will likely be in asset identification, simulation/prediction, and project management.

The unconventional sector is pretty new. Expertise is limited and training new staff requires current experts to spend the necessary time. Do you feel this hampers growth/expansion in this sector? How are companies approaching the issue? Do you think talent creation, attraction, and retention are issues in this new sector? What is your plan for

20

tackling these issues?

MM: Limited talent and expertise will slow growth somewhat, but this may not be a bad thing. This will give the industry time to understand the fundamentals of shale gas and determine the best way to access and develop this resource while addressing environmental and community concerns. Without this current limitation on talent, greater damage could be realized through improper exploitation of the resource along with potentially irreparable damage to the industry’s image. Most companies are working to develop a talent base through retraining personnel, hiring external people, and leveraging business partners.

GA: I believe it is too soon to tell whether or not the limited expertise to which you refer is hampering the growth of the shale gas sector. As far as Chevron’s petroleum engineering population goes, I don’t think this group will have issues of hiring and retention in the shale gas area any different from what we experience in other areas of the upstream business.

Most of the shale gas initiatives in Europe are coming from American, Australian, and British companies. Europe’s old, mighty “utilities”—the likes of Eon, RWE, EDF, Enel, and Vattenfall—remain largely skeptical of the opportunities shale gas offers, while it is becoming an increasingly important resource in the United States. Limited exploration is being done in South America, Africa, Asia, and elsewhere. Do you feel unconventional resources will follow the same pattern of development as conventional whereby technology/exploitation moved from developed economies to undeveloped? Or will we see a surge in exploration across the world? How do you envisage talent creation in these new frontiers? Does this offer opportunities for young professionals (YPs)?

MM: We will probably see both. Technology will continue to transfer from developed to undeveloped economies, and exploration will occur quickly around the globe. The talent creation in the new frontiers will be very similar to that for conventional methods. The goal of the host nations and the oil and gas companies will be to develop a local workforce capable of developing and

managing the gas resource from within the country.

GA: I think the majors will discover quickly what makes a good shale gas project and move rapidly to f i l l their portfolios to a risk balanced level. Then there will be a longer term development curve whereby the more diff icult plays will be exploited. Resource opportunity will drive the need to develop our organizational capability and leverage local talent wherever the best plays are located.

Technology related to unconventional resources is quite different from conventional oil and gas technology taught at universities. YPs not only have to learn completely new stuff, but also are expected to help develop new technology. This is quite a change from conventional projects from which YPs learn by applying concepts learned at universities. Learning is also slow as few experts have only a limited amount of time for mentoring. What is your advice to YPs who are working on unconventional projects? Should they concentrate more on learning new stuff or should they look for opportunities in conventional projects at the same time?

MM: Although you can have a meaningful and long-lived future with unconventional projects, you shouldn’t dismiss the opportunities associated with conventional projects. Most of the major capital projects around the world are conventional projects, and this will continue for the foreseeable future. Professionals should continue to keep their skills sharp because change can happen quickly, due to either business or personal needs that require you to shift your career plans.

GA: I would encourage YPs to get a balanced background in conventional and unconventional development. Focusing entirely on geothermal is a good example of what can happen to petroleum engineers and Earth scientists who can find themselves limited in work locations and opportunities due to the geographically limited resource base.

On the same note, do you feel universities should alter their course structure to include additional courses on unconventional resources? What are some current research and development

efforts from the industry to improve its technology through industry/university collaboration?

MM: I do believe universities should provide additional courses on unconventional reservoirs. With the majority of land-based rigs in North America drilling for unconventional hydrocarbons (such as shale gas, tight gas, and tight oil), most petrotechnical professionals will be exposed to unconventional resources at some point in their career. Receiving a foundational understanding of these types of reservoirs should be treated similarly to getting a foundational understanding of conventional reservoirs.

GA: I believe unconventional resources should be taught as a junior or senior level course like courses on heavy oil or enhanced oil recovery.

As an industry luminary, what lessons can you share about leadership? What advice do you have for YPs planning to make a career in unconventional resource development? How do you think SPE can help?

MM: Leadership can come in different shapes, sizes, and colors. However, one common theme of leadership is doing the right thing—always—even when you are 100% certain you won’t get caught taking a shortcut. My advice to YPs is to stay true to your values and keep an open mind about your career path. Some of my most memorable job assignments had little to do with the career path I originally perceived when I started full-time work.

SPE can be a portal to the rest of the industry. It can provide training, knowledge transfer, networking opportunities, and friendships that can last a lifetime. Take advantage of everything SPE has to offer and you will be rewarded.

GA: The best advice is to follow your passion. Better to get up every day motivated and excited about what you do. For me, lifelong learning keeps me interested and motivated. I recommend that YPs consider lifelong learning a key element for success. I suggest that SPE continue to consolidate the best papers about methods, offer forums to discuss unconventional resources, and encourage the sharing of ideas. TWA

HR Discussion

21Vol. 8 // No. 1 // 2012

Soft Skills

Engage in Networking and Realize Your Dream JobDavid Vaucher, IHS CERA

For some, “networking” has a negative connotation, conjuring up images of people ingratiating themselves with everyone with whom they come into contact to climb the corporate ladder. This perception is untrue, and one can make the case that failing to network effectively—especially at the Young Professional stage—can hamper your career. Readers of TWA may already have read articles about “effective networking,” which can come across as procedural (i.e., behave this way, attend these events). In reality, networking is normal to human nature and is an innate ability we all possess.

What Is Networking?Networking is really about making friends. So much has been written about the topic that this may seem simplistic, but when it comes right down to it, adding people to your network only means making new friends. A great example applies to our college affiliation. A university’s reputation is largely based on the future success of its alumni. In turn, the schools will heavily push their “alumni network” to get you to attend in the first place. It sounds so official, but then you graduate, and all of a sudden, you are an alumnus yourself, attending various activities, meeting new people, and making new friends, who become part of your network. Later, when you need independent advice, or are looking for a referral or a new venture, you contact someone in your network. Easy.

As a matter of fact, your network is already huge—you just don’t realize it. It is not something you build after you start working. Anyone you know personally is in your network and could potentially help you by being a source of information.

What Networking Is NotNetworking does not involve patronizing

people, nor does it need to involve cold calling your brother’s wife’s friend’s aunt because you heard through the grapevine that she has an opening to fill at her company.

Furthermore, networking is not about showing up at an event and trying to distribute and collect as many business cards as possible, without remembering afterward the person who handed you the card. This will usually end up being fruitless, and you will not be able to recall the genuine and meaningful conversations you had.

Again, the process is much more natural and fluid than that, and there is no mystery to it.

Why Network?Even though the answer to this question appears obvious, its importance should be reiterated. With effective networking, one can perhaps:

• Find employment more successfully than traditional channels, such as Internet applications or job fairs

• Be promoted from among equally talented peers

• Build your employer’s client base, or engage new clients if you are looking to strike out on your own as a consultant

• Build your personal brand. For instance, just as Apple stands for high quality, you want the brand of YOU to reflect your image and capabilities to your peers and the industry

How Do I Grow My Network?Networking is about building meaningful relationships with the people in your industry or one that you would like to be a part of. There are several places where you can meet people and expand your network.

• Local SPE lunches are great. They are an inexpensive way to mingle with many oil and gas professionals. The

topics are interesting and the crowd is more or less the same. In time, you will see familiar faces, making it easier for you to strike up conversations. If the speaker was good, or the person sitting next to you was working on an exciting project, send an email letting them know (be sure to get their business card) and invite them to lunch at a later date. Most businesses encourage intercompany networking, so you could expense the meal (first get your manager’s approval).

• If you plan on going back to school, use every opportunity to get to know your classmates. It can sometimes be surprising just how small the oil and gas industry and the business world can be, and there is a high probability that you and a former classmate will cross paths sooner or later.

• Your co-workers are the most visible part of your network because you see them every day. Never burn a bridge. You could move on to other ventures and use those connections in the future.

It is worth remembering that networking is a two-way street. It should not be forced or insincere, so you should be willing to return the favor to the person who has helped you in the past.

Proof That It WorksNetworking can open opportunities for exciting new career pathways. Let me share a personal story. Last year, I was halfway through my part-time MBA program and was unhappy with my job situation and (lack of) future at my place of employment. I had been looking for some time to make a career change that would allow me to grow and use my newly acquired business skills. Every Friday evening after class, many students would go to a nearby bar to unwind. One evening, a classmate approached some of us and asked if we were looking for new employment because his managers wanted him to help fill a job opening.

He said to me, “David, your previous experience matches that of the people already working for us, and I think you’d be a great fit.” He got me an interview, coached me through the process, and I landed the job. I am now happier than

Soft Skills... Continued on next page

22

Previously, he was a technical adviser for global operations at TAM International. He began his oil and gas career as an engineer

at Schlumberger in Texas. He is the author of several SPE papers. Vaucher holds a BS degree from Rice University and an MBA from the University of Texas at Austin. He is working toward a master’s degree in petroleum engineering at Texas A&M University.

ever. Of course, I am appreciative of my friend’s effort, and I would return the favor in a heartbeat.

In the end, it is just as it was at school: Making friends as a professional can still be awkward at first. But, the more at ease you become with yourself and your abilities, the more relaxed you will be. Push yourself a bit; you will be glad you made the effort. Now, go out into the world and network! TWA

David Vaucher is associate director, overseeing the Upstream Operating Costs Analysis Forum at IHS CERA.

YP Newsflash

British University in Egypt’s SPE student chapter leaders Moustafa Ezzat and Amr Taha give a presentation in China.

“One Petroleum World Without Borders” Campaign

The SPE student chapter at the British University in Egypt (BUE) successfully started their campaign, “One Petroleum World Without Borders,” aimed at fostering international publicity as well as understanding among petroleum students worldwide. Organized in coordination with SPE’s Chengdu study group, the first trip—to China—was a great experience for BUE students, who had the opportunity to share their knowledge and experience while organizing professional and fun activities.

The BUE student chapter held successful SPE awareness sessions at three Chinese universities: Southwest Petroleum University, Chengdu

University of Technology, and Yangtze University. The student chapter leaders distributed SPE brochures and talked about the benefits of student membership while encouraging fellow Chinese students to start their own student chapter.

– Moustaffa Ezzat, British University in Egypt

SPE Oklahoma Chapter Raises Funds for CharityThis past summer, a group of YP volunteers donated a weekend to the Willow Springs Boys Ranch in rural Oklahoma. The team assisted with the construction of two new cabins that will be used to house overnight campers at the ranch’s campgrounds. YPs from all over central Oklahoma showed up

to build the two structures’ outside frameworks. Revenue from the cabins generates funds for the Boys Ranch, a long-term residential facility in which orphaned and abandoned boys as young as 7 are cared for. The children can live on the ranch until they graduate from high school, obtain their GED (high school equivalency diploma), or participate in an independent living program after graduation.

The Oklahoma City (OKC) SPE YP Chapter also raised more than USD 10,000 for the ranch with its fifth annual OKC YP Oilfield Mardi Gras Gala and Silent Auction. This event has grown each year since its inception, with 2011 attendance reaching 110 and 28 companies donating. The gala serves a dual purpose: It is a great opportunity for YPs to network and get to know the industry’s more seasoned professionals, and, more importantly, to serve the local community that does so much to support the oil and gas industry. SPE members, friends, and participating companies have contributed several play days and volunteer work at the ranch and raised more than USD 30,000 for the ranch in the last 3 years.

–Toby Deen, Devon Energy

Gulf Coordination Council YP Paper Contest Held in OmanThe second Gulf Coordination Council (GCC) YP Paper Contest was held in June 2011 in Oman. The paper contest began as an initiative of Saudi Arabia Section YPs in 2010 to increase interaction among YP members in the Middle East. The 2011 paper contest was as great a success as the first. More than 50 papers were received, from which nine were selected for final presentation to the team of judges and Oman SPE members. Members of the SPE Oman YP Section put painstaking effort into planning and organizing the event, with the support and guidance of the Saudi Arabia Section. Contest winners were Mohammed Al-Khald, (first place, Saudi Aramco), Nabil Al-Kindi (second place, Petroleum Development Oman [PDO]), and Aisha Al-Shukaili (PDO). 

SPE Oklahoma City YP Chapter volunteers helping at the Willow Springs Boys Ranch in Chandler, Oklahoma.

Soft Skills... Continued from previous page

The poster competition was won by Azza Al-Maskari (PDO). Congratulations to the finalists and good luck to next year’s GCC paper contestants.

–Maan Al Asfoor, Occidental of Oman

YPs Go on a Field TripIn April 2011, 45 engineers and colleagues from the oil and gas industry in the South China Sea eastern area traveled to Qingyuan, Guangdong Province, to visit the Danxiashan area of China for the second YP field trip. The 2-day trip was organized by members of the SPE Shekou Section YP Chapter team with the co-sponsorship of Schlumberger and Baker Hughes.

The trip started with an excursion to a Nanhua temple—a prominent Buddhist temple—followed by a presentation-cum-discussion on the clastic reservoir environment and the Danxia formation. Participants enjoyed interacting with geologists and geophysicists, while the presentation offered nonpetroleum technology people the opportunity to understand geological terminology encountered daily. The following day, YPs climbed the mountain in teams while observing depositional sequences and

recording these observations. Overall, the field trip was a great chance to learn about the area’s depositional geology. All the attendees enjoyed the trip and felt it was a good opportunity to share knowledge, and are looking forward to further activities in the future.

–Belinda Wu, Woodside

Annual YP Workshop Held at Port Harcourt SectionThe SPE Port Harcourt, Nigeria, Section (Section 103) held its annual YP workshop in May 2011. The workshop’s theme was “Social Responsibility and Ethical Decision Making”—carefully chosen to highlight the ethical challenges faced by YPs while carrying out their duties. Shell’s Chima Emelle gave the opening speech, stressing the petroleum industry’s ethical challenges. The workshop included ice-breaker events, guest lectures, and syndicate discussion sessions. Shell’s Vincent Nwabueze described ethics as a “product of our behavior that forms the character of an individual” and stressed that YPs should not think of self first, but instead think

about the responsibility they have to the environment and to their work. Other speakers included Francesco Verre, Agip; Goke Akinrinmade, Shell; and Remmy Ijoma, BJ Services.

This was followed by a movie-cum-syndicate discussion session. The movie depicted ethical dilemmas faced by workers, engineers, and managers as well as by a consulting firm. Workshop participants were asked to discuss the movie’s characters in groups and adapt some ethical and social responsibility issues raised in the movie to their particular workplace. The discussion stimulated by the movie was very enthusiastic. The workshop ended with closing remarks from Agip’s Iwo George, who commended the participation of YPs and reminded them about the importance of social responsibility to members of the petroleum industry. The workshop was also attended by student delegates from the University of Port Harcourt and Rivers State University of Technology. With the success of this event, SPE Section 103 hopes to build upon this experience and coordinate many more events at which YPs can network and further their careers in the industry.

–Etta Agbor, Shell

YP Newsflash

SPE Bookstorewww.spe.org/store

The SPE Bookstore now features books in digital format. Many titles are available

for quick download, saving you time and shipping fees.

Browse available titles at www.spe.org/store.

Digital Books Now Available Online

Society of Petroleum EngineersSPE’s digital books use Adobe® Digital Editions and can operate on up to six devices.

24

If you ask 10 specialists, “What is flow assurance?”, you are likely to receive 10 different answers. Some may provide broad, generic statements about hydrocarbon transportability. Others may confine themselves to a more limited scope, emphasizing the use of chemicals to prevent deposits or of simulators to predict fluid dynamics or thermal issues. I was never quite satisfied with such answers, so let me offer an 11th definition: “Flow assurance is the technical discipline that guarantees achievement of a lifting and transport system’s lifetime production targets—from the near-wellbore to offloading tanks—by predicting, preventing, and solving problems originated by the behavior of the transported substances (i.e., gases, liquids, and solids either separated or in multiphase conditions).” This long definition emerged as an attempt to encompass each different facet of my everyday activities, which I will try to clarify one by one.

First, a focus on flow assurance has some physical boundaries. Qualitatively, whenever flow from the reservoir is confined within a very limited space, flow assurance starts becoming an issue. This may happen in pipes of any sort (e.g., well tubings, flowlines, and pipelines), but also in plant facilities (e.g., valves, manifolds, separators, and slug catchers) and in that rather fuzzy region called the near-wellbore, where the fluids must accelerate and squeeze close together to enter the well. The property common to all these places is that even tiny transformations produced by the fluids traversing them may have drastic effects on the capability to produce the desired hydrocarbon flow.

This leads to the real heart of flow assurance: the behavior of what moves in those restricted spaces. Hydrocarbons will be there—either in vapor or liquid form (or both)—but so

will reservoir water, reinjection water, sand, corrosion products, formation debris, asphaltenes, particles, and other components. Combinations of immiscible substances, such as emulsions (liquid/liquid) and foams (vapor/liquid), have properties of their own, quite different from those of the composing fluids, and deserve special descriptions. In this complex context, the first objective of flow assurance is making sure we deeply understand the behavior of such substances so a reservoir’s production targets can be achieved.

During the design phase, the main focus is on prediction and prevention of the issues that may adversely affect the expected production profile. Some phenomena may reduce the rate while others may become “show-stoppers,” leading to months of production stoppages and expensive interventions. During the operation phase, the main focus is instead on control, early detection, and problem solving.

The following is a summary of typical flow assurance problems:

•Lack of reservoir energy to push hydrocarbons to the receiving facilities

•Buildup of deposits of asphaltenes, wax, inorganic scale, or sand (or a mixture of these)

•Formation of hydrate plugs•Occurrence of unacceptable flow

regimes, such as severe slugging or erosional velocities

•Emulsions, fluids with high yield-stress, sludges, naphtenates

•Liquid loading of pipelines and wells•Corrosion phenomena induced by

water settling and low velocitiesThe following are typical solutions in

the flow assurance toolbox:•Optimal diameter, route, and

number of pipes• Artificial lift technologies, such as

pumping/compression technologies, multiphase pumps, and gas lift

• Thermal insulation or active heating, to prevent hydrates and wax deposition during steady production and delay the formation of hydrates during shutdowns

• Use of internal pipe coatings• Active flow control (by valves or

chemical products)• Regular use of inhibitors, pour point

depressants, or solvents• Injection of hydrate inhibitors

(thermodynamic, kinetic, or colloidal)• Use of emulsion breakers or

foamers/defoamers in wells and pipelines

• Pigging, for liquids or deposits removal

Of course, if our list does not contain the right solution, we can always invent it! Flow assurance is a discipline in which innovations are often relatively easy to prototype and transfer to the field and can provide a competitive advantage.

So, how do we do all the above in practice? We first have to make sure we deeply understand the behavior of the several relevant substances. The optimum places for dissecting and understanding fluid behavior are laboratories and flow loops. A flow assurance specialist can greatly benefit from repeated and direct observation and manipulation of substances moving in pipes or subjected to pressure and temperature changes, or mixed together or separated.

In flow assurance studies, fluid behavior is predicted by mathematical models. But any model is only a representation of the real situation. Personal observation of intricate phenomena, such as emulsion formation and breaking, solids dispersion, and slug movement, leads to understanding what is captured and what is omitted by a given model. Our most important (and difficult) decision is to select the right tool to predict the behavior of

Discover a Career: Flow AssuranceAlberto Di Lullo, Eni E&P

Discover a Career

25Vol. 8 // No. 1 // 2012

interest. Familiarity with both firsthand observation and the outcome of models is a great success factor!

Another key success factor is feeling at home in plants and in discussions with operators and technicians. Experience in real plants is superb for acquiring a deep knowledge about the behavior of substances, but with one caveat: Most plants are not instrumented or operated to expose specific phenomena. If you learn how to develop and connect your measurement tools and, of course, win the confidence of some operators, each plant can become a unique laboratory to work with. For example, as I write this, I am on a boat returning from a platform in West Africa. I was there to contribute to the solution of a production problem, but I also installed temporary sensors and performed specific observations. Beyond getting clues about the diagnosis, it has been a lot of fun and extremely instructive.

Whatever the origin of the data (laboratory, plant, databases, and so forth), their effective processing for flow assurance purposes calls for the use of software, either for modeling physical/chemical effect or for statistical and presentation purposes. Several commercial tools are recognized as industry “standards” (e.g., for thermodynamics or fluid dynamics modeling), thereby ensuring a general consensus exists about the validity of their outcomes. Moreover, individual companies often make a choice as to which tool to use for the simulation of specific phenomena (e.g., hydrates formation or slugging). A hands-on and critical understanding of the above codes (even those used by other disciplines) is important for achieving significant results. Flow assurance objectives call for a broad vision and a cooperative mind-set: Lack of understanding of neighboring workflows and tools only results in misleading judgments.

Also, the capability to develop additional pieces of ad hoc code can make a decisive difference in development projects or field assistance. The use of many languages contributes to faster, better outcomes, especially under severe “workload pressure.” Luckily, most of my colleagues happen to be quite good at programming, or have become so after realizing the benefits.

The following are a couple of final ingredients for the flow assurance recipe: a good understanding of intrusive/mechanical intervention (e.g., pigging, hot tapping, and coiled tubing) and recognition of the “value of context.” The former is easy to understand: Whatever prevention efforts we apply, both the continuous thrust toward cost optimization and the lack of information during the design phase lead to the potential for problems during any field’s life. If these happen, physical actions (as opposed to soft, chemical intervention) may re-establish control. Operators are often reluctant to apply intrusive actions (such as pigging), since mistakes during their execution may worsen the situation. Here, though, is where new technologies may be of great help. Flow assurance specialists should always consider the generation and development of new concepts and tools as an integral part of their job. In fact, this is a discipline in which every day presents opportunities for the application of new ideas in

cooperation with operators.The latter ingredient—the “value

of context”—is not easy to explain: It must be “breathed.” However, we can achieve unbelievable results when general-purpose reasoning gives way to specific, context-driven reasoning. Some say that “the devil is in the details,” but masterpieces are also in the details: Good cooks adapt the recipe to the ingredients. Challenging generic “engineering margins” is an example of this. When we apply the flow assurance toolbox to a producing field with strong reference to its actual constraints, degrees of freedom, and history, impressive optimizations can be achieved (e.g., in the consumption of chemicals, in downtimes, and in environmental impact).

I sincerely hope young engineers, physicists, and chemists have the opportunity to delve into the intricacies of the discipline of flow assurance. I believe it is a beautiful subject that can give multidisciplinary insight into mechanisms at work in the field in this industry. The prospect of becoming a bridge between people speaking different languages is a key characteristic of flow assurance specialists—in one instance discussing scanning tunneling microscopy, and switching to hot tapping the very next meeting. It is no wonder I have never been bored in the last 20 years! TWA

Discover a Career

Alberto Di Lullo has worked for Eni E&P since 1991. He is currently flow assurance senior advisor and manages the flow assurance engineering technologies group. He has more than 40 publications and several patents related to upstream technologies to his name. Di Lullo was appointed SPE Distinguished Lecturer (2007–08), received the Best Quality Paper Award at the 2005 Offshore Mediterranean Conference, and was awarded the Eni E&P Technology Prize in 2002. He

just finished serving as program chairman of SPE’s Italian Section and currently serves on SPE international committees.

26

How important are unconventional resources to the future of our industry?JL: Unconventional resources (tight/shale gas, tight oil, and oil sands) play an ever-increasing role in our energy supply and I only see that role increasing. The bottom line is this: The world will need more energy under all scenarios. Even if renewables play a larger role and conservation is taken seriously (and I hope it is), the world’s emerging economies will require sustained use of oil and gas for the foreseeable future. Because oil and gas from conventional reservoirs is declining (the “easy oil” is gone), the role of unconventionals in the future energy mix will be major.GL: Our planet’s endowment of unconventional oil and gas is orders of magnitude larger than the conventional deposits that were the primary targets of exploration and production for the past 150 years. Unconventional deposits can be grouped into three general categories: 1) unconventional reservoirs, which comprise source rocks and ultratight sandstones and carbonates; 2) unconventional fluids, including heavy oil, bitumen, and sour/acid gases; and 3) hydrocarbons “locked

in rocks,” such as methane hydrates and oil shale (an immature source rock). Today, the primary targets of exploration and development investment in North America are within categories 1 and 2, and these types of targets are also becoming increasingly important around the world.

How significant is the unconventional reservoirs revolution under way in North America? JL: In my view, it is historic; Few people, if any, predicted 10 years ago that the United States would regain its position as the number one producer of natural gas in the world. Yet that is what happened because of advances in drilling and completion technology in tight/shale gas reservoirs with easy access to the largest natural gas market in the world.GL: The extraction of oil and gas from source rocks and ultratight sandstones and carbonates represents a breakthrough on the scale of that achieved when our industry first went offshore shortly after World War II. Our newfound ability to extract hydrocarbons from source rocks has opened a vast new suite of opportunities that contains

technically recoverable resources of thousands of billions of barrels of oil equivalent. While some still wonder about the commercial viability of unconventional reservoirs, it is worth noting that the Bakken formation in North Dakota and Montana today produces more oil on a daily basis than the Prudhoe Bay field in Alaska, which had been North America’s top oil producer for almost three decades. Also, the Eagle Ford Shale in south Texas may surpass the Bakken in the not-too-distant future to claim the top spot.

How will the unconventional reservoirs revolution change the outlook for the natural gas industry? JL: Natural gas in North America is now abundant—we have about a 100-year supply; affordable—costing about USD 4 per Mcf; environmentally friendly—it is the cleanest burning fossil fuel and a swing-use fuel for supporting renewables (wind, solar, and hydro); available—98% of North American supplies are produced in North America; and economically advantaged—providing 3.5 million North American jobs (2008) and USD 1 billion in economic activity for every Bcf produced. With numbers like these, driven largely by the unconventional gas plays, natural gas will be a dominant player in North America’s future energy strategy.GL: There has been much talk over the past decade about natural gas being a “bridge fuel” to an alternative energy future. This designation resulted from widespread perception that natural gas resources were insufficient to play a significant role in supplying mankind’s energy needs much past midcentury. However, we now know that this is not the case, given the enormous volumes of natural gas the industry will be able to recover from unconventional reservoirs. These volumes are sufficient to power the planet well into the 22nd century and perhaps for many centuries beyond.

Unconventional ResourcesJoe Leimkuhler, Shell, and Greg Leveille, ConocoPhillips

Technical Leaders

Joe Leimkuhler is offshore well delivery manager for international exploration and production (E&P) at Shell. Previously, he held a similar position in the company’s Americas E&P unit. Earlier, Leimkuhler served as project drilling engineer for the Mars development and as an instructor at Shell’s Bellaire Technology Center in Houston, where he taught drilling engineering. Before joining Shell, Leimkuhler worked for M-I Drilling Fluids in the Wyoming Overthrust Belt and for Arco in drilling and reservoir

engineering in Bakersfield, California. He serves on the American Association of Drilling Engineers (AADE) National Board of Directors and was AADE president from 2007 to 2009. Leimkuhler is a 25-year member of SPE and serves on the American Petroleum Institute committees addressing post-Macondo deepwater drilling issues. He graduated from the University of Montana with BS degrees in geology and forestry in 1981, and earned an MS degree in petroleum engineering from the University of Wyoming in 1987.

27Vol. 8 // No. 1 // 2012

This new knowledge about resource size and the fact that use of natural gas emits significantly less greenhouse gas than coal means that our industry is well positioned to continue playing a major long-term role in meeting the world’s energy needs.

What excites you from a technology perspective about unconventional resources?JL: It is how we are progressing with technology to address the concerns with unconventional resources. In tight/shale gas, the greatest concern is around hydraulic fracturing operations. The key to addressing this concern is well integrity, and at Shell, we design, construct, and operate wells and facilities in a safe and responsible way. In that regard, we have introduced global onshore tight/shale oil and gas operating principles available to the public, with examples of how we are committed to responsible and safe production of this resource. Shell has a rigorous set of five global operating principles that provide a tested framework for protecting water, air, biodiversity, and the communities in which Shell operates.

On the oil sands front, I am excited about an agreement Shell recently announced with the governments of Alberta and Canada to secure CAD 865 million in funding for the Quest carbon capture and storage project, which would permanently store underground more than 1 million tonnes of CO

2 per year from the

Shell Athabasca oil sands projects. This is an important milestone in our ongoing commitment to reduce the carbon footprint of our oil sands operations. Going forward, I am convinced that continued development of unconventional resources can only be accomplished if governments and the public are convinced it can be done in a safe and responsible manner. Sound operating practices and technology application are essential to meet this objective.GL: The technologies to exploit unconventional resources are in many ways relatively immature and, therefore, can likely be enhanced with additional research and experimentation. For example, steam-assisted gravity drainage (SAGD), which is used to produce bitumen from Canada’s oil sands, was first commercially applied only about a decade ago and clearly can be improved. At ConocoPhillips, we are pursuing numerous technologies to reduce costs, enhance recovery, and/or minimize

environmental impacts, compared with the current SAGD approach. Likewise, our industry’s understanding of shale and carbonate source rock reservoirs still has some fundamental gaps. Technology can and will play a major role in optimizing the development of these prolific, but complex reservoirs.

What are the next breakthroughs you foresee our industry making once the current unconventional reservoirs revolution begins to mature? JL: I see continued breakthroughs offshore in both the deepwater and Arctic operating areas. While these reservoirs may not be “unconventional,” the operating environments and required technology are just as impressive. Shell probably has the largest number of deepwater fields under multiple rounds of development drilling campaigns, and we are pushing forward with plans to drill in the offshore Beaufort and Chukchi seas in the US Arctic. Thus, we face the challenge of drilling deep, high-angle wells through depleted zones in deep water as well as new wells in the shallow waters of the Arctic. In the planning phase, 4D as well as ocean bottom seismic are enabling us to fully understand the subsurface and properly plan these wells.

Drilling the wells is enabled by the use of full rotary drilling systems with full measurement-while-drilling evaluation and pressure sampling capability; expandable casing systems to maintain hole size; and managed pressure drilling systems, coupled with low rheology, synthetic-based mud systems, to minimize, if not eliminate, costly loss of drilling fluid. On the completion side of the business, efficient frac-and-pack and

high-rate water pack completions are keys to achieving low skin completions that can hold up and deliver the needed production rates and volumes.GL: There are still enormous quantities of unconventional resources for which there are no viable commercial development options. For example, methane hydrate deposits, which are believed to contain hundreds of thousands to millions of trillion cubic feet of natural gas, are not today commercial, but could someday be developed if a technology breakthrough occurred. While commercialization is likely decades away, ConocoPhillips, in partnership with the US Department of Energy, will soon test an experimental technique on the North Slope of Alaska that pumps CO

2 into a hydrate reservoir—

liberating the methane and sequestering the CO

2—which physically replaces

methane molecules within the hydrate’s ice lattice. If this technology, or another method for extracting natural gas from hydrates, can be commercialized, then the age of hydrocarbons could be extended not just into the 22nd century, but perhaps to the year 3000 or beyond. We also expect considerable advances in converting organic matter in immature source rocks into oil, which would greatly expand the options available for producing liquid fuels.

What is your advice for young professionals (YPs) regarding unconventional resources?JL: My advice is the same to any YP entering this business, onshore, offshore, or in the unconventional plays. Learn as much as possible from all the sources available. Many of the young staff entering the business have learned the bulk of their

Gregory P. Leveille is general manager of nonconventional resources at ConocoPhillips. He began his career with Conoco in 1984 in Lafayette, Louisiana, and has lived and worked in New Orleans; London; Aberdeen; Houston; Anchorage; Farmington, New Mexico; and Singapore. During the first decade of his career, he held various exploration, development, and operations geology assignments in the United States and northwest Europe. Beginning in 1995, he held leadership

positions in exploration, planning and portfolio management, asset management, project management, upstream technology, business management, operations, and commercial. Before taking his current assignment in May 2011, Leveille was president of Global LNG and Asia-Pacific Commercial at ConocoPhillips. He is a member of the Dean’s Advisory Board at the University of Houston’s College of Natural Sciences and Mathematics. Leveille earned bachelor’s and master’s degrees in geology from San Diego State University.

Technical Leaders

28

knowledge through the classroom, with a few internships over their summers. Going forward, this will change, and you will develop the majority of your skills and competence on the job and through broadening assignments. The most successful individuals will quickly determine the learning and development opportunities that exist within the senior staff of their organization. Personally, I learn better and develop faster if someone “shows me” vs. “tells me” a technology, technique, or procedure. Seek out the “mature staff” and leverage their knowledge and experience.GL: I wish I could once again be a young scientist or engineer, because the future of our industry is brighter today than it has been for many decades. Not long ago, conventional wisdom was that natural gas and oil production in North America were in irreversible decline, which would have gradually diminished domestic employment as the continent’s energy needs would require increasing levels of imports. Today, we can see that yesterday’s conventional wisdom was pessimistic, as North American natural gas production is at an all-time high—thanks to the unconventional reservoir revolution—

and liquids production has rebounded by almost 1 million B/D since 2008. So for YPs, I encourage you to find a way to secure an assignment related to unconventional resources. And then invest your time and energy in thoroughly learning the crafts needed to excel in this area.

What are your final thoughts about unconventional resources?JL: When the topic of “unconventional resources” comes up, onshore oil and gas tends to dominate the conversation. However, an analogous “unconventional offshore” play is in the deepwater basins and sub-salt play along with the offshore Arctic. I feel that development of these areas will continue to pay dividends well into the future and throughout the careers of the next generation of oil and gas professionals.GL: When I was in university some 27 years ago, source rocks, as their name implies, were considered important only because they were where oil and gas were generated. Nobody saw them as being viable reservoirs on a large scale. In 2000, while I was managing an asset team responsible for developing tight gas sands in south Texas, I remember

participating in debates about whether to drill vertical fracture-stimulated wells or horizontal unstimulated wells. There was no option of drilling horizontal fracture-stimulated wells, because the downhole tools required were not reliable or readily available. Today, the majority of wells drilled in the US are horizontal fracture-stimulated wellbores in source rock reservoirs. This is an amazing result. However, it does not by any means represent the culmination of innovation in our industry. In the years ahead, I am convinced that many paradigms strongly held today will be found wrong or incomplete, and our industry will make further technological breakthroughs.

At ConocoPhillips, we are working hard to make the next big advancement. I challenge each of you to attempt to do the same. We, as an industry, have come a long way technologically since the Drake well was drilled in western Pennsylvania in 1859. However, the journey still has a long way to go. I therefore hope each of you finds a way to make your own contributions as a petroleum engineer or scientist and, in doing so, helps our industry continue to deliver the energy required to power our world. TWA

Technical Leaders

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29Vol. 8 // No. 1 // 2012

It’s been 8 years since the first SPE Young Professionals (YP) workshop took place at Stressa, Italy. Who would have imagined it would launch an SPE YP revolution!

SPE was one of the first professional organizations to recognize the role YPs play in the future of the oil and gas industry as its dynamics continue to evolve. SPE leaders fervently believed that channeling youthful energy and encouraging out-of-the-box thinking would result in unique ideas and innovation that benefit the industry. SPE provided YPs a rare platform on which to hone their technical and leadership skills in the earliest stages of their career.

The Young Professional Coordinating Committee (YPCC) was established by the SPE Board of Directors as a standing committee, and YP programs have since expanded, vertically as well as horizontally. The YPCC has been successful in moving forward with new initiatives each year since its inception.

While I am convinced the YPCC has taken substantial strides, there are points to ponder: Are we willing to keep up this momentum? And how long will it be before we are ready to shape the future and face our industry’s challenges? During the last few years we’ve experienced an era of peak oil debate. We have seen our industry going deeper and colder in search of hydrocarbons. Industry leaders, political figures, and social activists along with a global audience have been grappling in debates about global warming. We have also witnessed a rise in negative perception about our industry and its ethics due to one of the most disastrous oil spills ever.

YP statistics show that the number of YP SPE members has risen from 12,716 in 2007 to 17,436 in 2010. This makes me confident that we have an ever-growing population with the ability to continue our journey’s success story. We have the right elements with the large number of YPs spanning the globe and SPE as a perfect catalyst to expedite transformation of YPs into skilled industry professionals. We have the right environment and the ability to be the agents of change: This way of looking at things has given a directional focus to YPCC, and many of its suite of programs emanate from it.

SPE has defined three YP strategic objectives that will serve as guiding principles for all current and future YP initiatives and activities: 1. Enhance technical knowledge

and skills for young professionals. (Technical Development) In a knowledge-intensive industry like ours, technical skills are of paramount value. In a recent YP survey, when asked to “rank types of training SPE should offer to YPs in order of importance,” almost 75% of respondents ranked technical training at the top. Additionally, another survey conducted by SPE of YP managers revealed technical skills are one of the most important contributors to the success of young professionals. The YP paper contest held at the SPE Annual Technical Conference and Exhibition is already catering to this need. Furthermore, SPE is giving opportunities to YPs to serve on its various technical subcommittees.

2. Develop young professional leaders for the society and the industry.

(Leadership Development) YPCC’s current offerings and their structure provide substantial opportunity and exposure to develop YPs into future leaders within the industry as well as within SPE. The society has given a platform to YP members at the local level by suggesting sections develop YP committees. The YPCC recently launched the Industry Leaders Video Library to contribute to leadership development as industry VIPs share their experience and approach.

3. Integrate and engage young professionals in SPE. (Integrate & Engage) The YPs of today are the future of SPE. Hence it is important that as YPs advance in their careers, they are simultaneously steered to take on larger roles within SPE. Most SPE sections have succession plans in place for active YP volunteers to progress into section leadership roles. A host of existing initiatives, such as the Ambassador Lecture Program, Young Member Award Program, and e-mentoring, have been quite successful over the years in ensuring seamless transition.I am very excited about these

new strategies and the changes and additional initiatives that will come from them. I look forward to your participation. I invite every YP to join this revolution and get involved with SPE. The wealth of resources has never been as great, and I can only imagine what it would be like with each of us making a contribution. Together we can make a better industry and a brighter energy future for the world. TWA

YPCC Update

Be a Part of the YP Revolution!Abhijeet Kulkarni, YPCC Chairperson 2011–2012, Shell

30

In the land known for the midnight sun, beautiful snow-clad mountains, and the green sky lights, there is a

place where the “black gold” shines. The oil capital of Norway, the southwest coastal city of Stavanger has grown into one of the major international oil and gas hubs. As the importance of North Sea oil and gas production has increased for Europe, Stavanger has welcomed the world to its doorstep. The personality of Stavanger is not only oil and gas; in 2008, it was chosen as one of two European cultural capitals. A lively city, Stavanger embraces the diversity of the world’s professionals who call Norway home.

The City in PerspectiveDuring the 8th century, about 30 small kingdoms existed in Norway. The country’s first king, Harald Fairhair, fought and won a battle north of Stavanger that led to the unification of the country. The Viking era that followed further expanded and unified Norway, while coastal cities such as Stavanger thrived as Viking settlements. Civil war and territorial disputes shaped the country over the next thousand years.

Today, Norway is a constitutional monarchy with a parliamentary system. King Harald V is the head of state. The Prime Minister is the head of the

government. The Prime Minister appoints a Cabinet of ministers, which with the Prime Minister comprises the Council of State. The supreme legislature is the Storting, located in the capital of Oslo. The political parties represented in the Storting choose the Prime Minister.

Besides Harald Fairhair, another iconic historical figure of the Stavanger

region is chieftain Erling Skjalgsson. He is credited with freeing his slaves centuries before doing so became a broad social issue. Monuments to the first king and the chieftain are ubiquitous in the city.

Before the discovery of oil and gas in the North Sea, Stavanger’s economic pillars were the shipping, shipbuilding, and fishing industries. Today, the city has Norway’s second-largest international airport and a world-class harbor. Although the city’s population is only 126,000, its influence on the region and the North Sea make it a community

vital to the oil and gas industry. Further evidence of Stavanger’s growing diversity and influence on the world stage is the establishment of the NATO Joint Warfare Center in 2003.

A Vibrant Center The city’s oil history dates to the 1969 discovery of the Ekofisk field in the southern North Sea. More than 40 years of oil and gas production later, Stavanger has been transformed into Norway’s undisputed energy epicenter with a vibrant petroleum community comprising a who’s who of employers. Stavanger is home to Statoil’s headquarters and regional headquarters of operators such as ExxonMobil, BP, Total, and ConocoPhillips. In addition, more than 280 service companies and a collection of petroleum-related government bodies conduct business in the city.

Every 2 years, the city welcomes the global energy industry to one of the world’s leading energy meetings, the Offshore Northern Seas Conference. The event provides an opportunity for young professionals (YPs) to present innovative ideas. Over the years, the presentation of the “young professional company award,” given to the best idea presented at the conference, has become a popular part of the event.

Tony Fernandez, Shruti Jahagirdar, Marjan Jamshidi, Tyler Roberts, and Jim Stiernberg

YP Guide

Stavanger was chosen in 2008 as one

of two European cultural capitals.

Stavanger, NorwayGUIDE TOTHE YOUNG PROFESSIONAL’S

31Vol. 8 // No. 1 // 2012

Norway’s oil and gas activities are concentrated in the North Sea, the Norwegian Sea, and the Barents Sea. Production from these areas makes Norway one of the top hydrocarbon-producing countries in the world. Further, since all its electricity needs are met by hydroelectric power, Norway exports all but 5% of its hydrocarbon production, a volume that makes it the second-largest net exporter of gas and the third-largest oil exporter in the world.

Norway has produced only about 20% of its estimated 13 billion bbl of hydrocarbons, cementing its future as a substantial player in the industry. Revenues from oil and gas activity are invested in a government pension fund. As of the second quarter of 2011, the fund’s market value reached 3.11 trillion kroner (about USD 560 billion), making it the second-largest single-owner fund in the world and ensuring financial security for future Norwegian generations.

North Sea SuccessConventional North Sea oil production, a mainstay of Stavanger’s economy since the 1960s, has been in decline over the past decade, while the percentage of water produced with the oil has risen. The change has created a need for research and development of new technologies in the unconventional resources field and is the prime reason the University of Stavanger and the International Research Institute of Stavanger (IRIS) have focused on multiphase flow research for more than three decades. IRIS has also made concerted efforts with the University of Bergen to improve recovery through methods such as surfactant and polymer flooding, CO

2 flooding, and

the introduction of microorganisms. Additional efforts aimed at increasing production come from the Center for Oil Recovery, which was established in 2002 with industrial partners in the Ekofisk license: ConocoPhillips, Total, Petoro, Eni, and Statoil.

Upstream research conducted by IRIS has been aided by its virtual rig, which can simulate a well with an advanced model containing hydraulics, geomechanics, mechanical elements, and real-time scenario simulations for any decision the drill crew makes. The main target of the study is automated drilling. Unique to this type of laboratory is the section set aside for psychologists

who study the behavior of the crew during normal operations and adverse conditions.

The North Sea has been at the forefront of production technology and safety. Statoil has been a major influence on the cooperative development in the North Sea of new technology by oil operators. The Norwegian Continental Shelf poses unique challenges to completion and production, making it an ideal location for applying the latest technologies. In the North Sea, Norway’s Statoil natural gas platform, Sleipner, strips carbon dioxide out of the natural gas with amine solvents and disposes of it by geological sequestration. Sleipner reduces emissions of carbon dioxide by approximately 1 million tonnes per year. Regulations and standards for the region are authored by a collective body comprising oil companies, trade unions, and the Petroleum Safety Authority of Norway. The collaboration has led to an impeccable safety record driven by internal control.

Endless AttractionsThe city of Stavanger and the surrounding region provide endless attractions to visitors, particularly those looking for outdoor activities and events. Locals will suggest the 4-day food festival known as “Gladmat festivalen” for a taste of native and foreign foods. The annual summer festival began in 1999 and has grown to encompass downtown. On one of the many sun-drenched days in southwest Norway, visitors to Stavanger take the short trip to Pulpit Rock (Preikestolen), a large rock platform from where the once-in-a-lifetime view from 2,000 ft above sea level impresses every person who dares to walk to its edge. If the rock’s height is not intimidating enough, then driving to the nearby Kjerag mountain will pique your interest. Kjeragbolten is a large rock wedged into the mountain at 3,280 ft above sea level. The breathtaking views of the surrounding mountains and river ways become memories for life.

During the beautiful summer months, Stavanger is an ideal place for outdoor events and activities. On any given day, Norwegians can be found riding their bikes through the city center, windsurfing along the coast, or driving to the mountains to enjoy skiing and snowboarding. Stavanger epitomizes Norwegian living and visitors can enjoy

its open and inclusive culture. While walking along the harbor, it is not unusual to come across a group of multinational professionals enjoying fresh seafood or listening to music from around the world in one of the many pubs.

The transformation of a small fishing community into a world center for oil and gas professionals is nothing short of amazing. YPs from around the world relocate to Stavanger for the North Sea way of life and leave enriched by the Norwegian experience. TWA

FACTSStavanger•  Home of Statoil headquarters•  Home of the Norwegian Petroleum Directorate

•  Half of the total Norwegian oil and gas industry is located in the Stavanger region

•  Stavanger means “the bay area near the steep cliffs”

•  1,077 SPE members, including 290 young professionals, in the Stavanger Section in 2011;  website: http://www.spe.no/stavanger/

Norway•  Oil and gas produced to date: 2.7 billion BOE

•  Norway plans to become the primary UK gas supplier using new and existing pipelines

•  In coming years, the country will supply approximately 25% of Europe’s gas requirements

•  Annual investment in the Norwegian Continental Shelf is estimated at USD 22 billion

•  2,767 SPE members, including 702 student members, in 2011;

•  Five SPE sections: Bergen, Oslo, Stavanger, Trondheim, and Northern Norway

•  Four SPE student chapters: Bergen, Oslo, Stavanger, and Trondheim

32

Your Best Shot

Hydraulic Fracturing Operation

Photo by Nick Fornicola, engineering intern and student, Pennsylvania State University, USA. A massive fracturing operation job in the Marcellus Shale play, eastern Pennsylvania. Notice the layer of containment lays on every pad. Photo taken with a Casio EX-Z600.

Sunrise Over Drilling Rig

Photo by Toby Deen, operation engineer Permian Basin, Devon Energy, Oklahoma, USA. Sunrise over a drilling rig in the Sand Hills field, Crane County, Texas. Horizontal drilling technologies have brought new life and record production to this 60-year-old oil field. Photo taken with a Canon 713 PowerShot.

THE WAY AHEAD

E DITOR I A L COMMIT TEE

EDITOR-IN-CHIEFMax Medina, Statoil

DEPUTY EDITOR-IN-CHIEFTodd Benton Willis, Chevron

COMMUNICATIONS EDITORPrakash Deore, Fujitsu Consulting India

TWA A DV ISERAnthony Onukwu, Industry

Technology Facilitator

LEAD EDITORS

Alicia L. Koval, ConocoPhillipsAnton Andreev, Sakhalin Energy

Carlos Chalbaud, Gaz de France-SuezChike Nwonodi, Nigerian

Petroleum Development CompanyChris Jenkins, Devon Energy

David Vaucher, IHS CERALisa Song, Schlumberger

Manish K. Choudhary, Stanford University (student)

Manish K. Lal, ChevronMichail Tzouvelekis, Maersk

Samuel C. Schon, Brown University (student)

Sanchit Rai, University of Tulsa (student)

ASSOCIATE EDITORS

Abhijeet S. Kulkarni, ShellAlex Schmitt, DeGolyer and

MacNaughtonAmarachukwu Okafor, Marathon

Oil Amir Soltani, StatoilArpan Pushp, Oil and Natural

Gas CorporationDilyara Iskakova, Hess

Henny Gunawan, SchlumbergerJim Stiernberg, Louisiana State

University (student)Madhavi Jadav, Reliance Industries

Marjan Jamshidi, Universityof Southern California (student)

Matthijs Verhoef, Shell Canada Energy

Melissa Nance, ShellPaulo Pires, Petrobras

Per Olav Eide Svendsen, StatoilShruti Ravindra Jahagirdar,

Shell Technology IndiaSiddhartha Gupta, Schlumberger

Siluni Wickramathilaka, ConocoPhillipsSubhash Ayirala, Shell

Tony Fernandez, Noble Energy

Submit your entry today to [email protected]. This contest is open to all SPE members. The two best photographs will be published in each TWA issue. Your image must be in JPEG format, with a file-size limit of 4 MB. Submit photograph information with camera specifications. Provide your full name with your position, company name, and company location.

C A L L F O R E N T R I E S

Job # Filename0000037326 0000035552_0000037326_M01.indd

Art Director

Artist

H. CHUN

Tk

User / PrevUser Last Modifi ed

CMYK

8-17-2010 5:22 PM

Bleed

Trim

Saftey

8.375” x 11.125”

8” x 10.5”

6.8125” x 9.5”

Path MacPro08L:Users:jho:Desktop:0000037326

Johnny Ho / James Liew

Client

Create

Proof

AERA ENERGY

8-17-2010 5:10 PM

Traffi c K. JENKINS2_RELEASE

Fonts Helvetica LT Std (Bold, Roman; OpenType), Avenir LT Std (45 Book, 65 Medium; OpenType), Helvetica Neue LT Std (77 Bold Condensed; OpenType), Knockout (HTF32 Junior-Cruiserwt; Type 1), Times (Regular; True Type)

Art L10AER00003.tif (Arts_Logos:Aera:Art:Artwork:2010:L10AER00003.tif), L10AER00002.tif (Arts_Logos:Aera:Art:Artwork:2010:L10AER00002.tif)

Euro RSCG Worldwide erw107413a Proof 1

Client Name: Aera Energy Job Number: 0000037326_M01

Caption: Rock Print AdMedia: TBD

B: 8.375” (w) x 11.125” (h)T: 8” x 10.5”

S: 6.8125” x 9.5”

P4CB Screen: 133

This advertisement prepared by:Euro RSCG Worldwide

350 Hudson Street

New York, New York 10014AD: H. Chun x4205 CW: S. Diamond x4271

AD: M. Abehsera x4441PM : K. Jenkins x8009, Prod: L. Pernick x3989

Billing Job Number: 0000035552

In the energy business today, the challenges are immense, complex, dynamic and multifaceted. Yet, when determination and innovation are applied in full, amazing things can happen. At Aera Energy, we specialize in the amazing. Our people work within a culture that thrives on challenge and lives for solutions. We employ leading-edge management techniques,

a unique manufacturing mind-set, advanced technology and real-time data to recover even the most diffi cult reserves. And we do all of this while keeping safety and respect for the environment as our top priorities. Why do we work so tirelessly and passionately? Well, the petroleum we seek will not produce itself.

aeraenergy.com

ProProProProProProducducducducducu inginginginging so so soso sosolutlutlutlutulutionionionionionons.s.s.s.s

S:6.8125”S

:9.5”T:8”

T:10.5”B:8.375”

B:11.125”

SEEMEwww.keyenergy.com/unlocked

COME

The Way Ahead Vol. 8 Issue 1 Year 2012

Documents

minor transition period

eagle ford shale

training cour ses

flow assurance toolbox

annual energy outlook

energy information administration

tight shale gas

petroleum engineering departments