Squeezing the Last Drop of Oil

Companies used to leave plenty of oil within wells and move on. Now technology is allowing adventurous outfits to get at what was once inaccessible

Until a few years ago, few oil companies bothered to extract every last drop from their fields. That might seem surprising, given the ever-rising price of what the theme song from TV’s Beverly Hillbillies so eloquently described as “Texas tea.”

Yet most oil wells still have a fair amount of life in them. That’s because it’s relatively easy to extract the first 20% or 30% of a field’s capacity. After that it becomes progressively more difficult and expensive to tap the remaining reserves. “That’s why for every barrel we produce, there are two more in the ground,” says Jeff Johnson, founder and CEO of Fort Worth (Tex.)-based Cano Petroleum.

Johnson, 41, a former finance executive, is betting that he can make a fortune extracting those stubborn reserves buried beneath the plains of Texas and Oklahoma. Oil is traditionally pumped by flooding wells with water. When the pressure reaches a certain point, the oil comes rushing to the surface and pours out of the well. As the field becomes depleted, the pressure created isn’t sufficient to force the oil from the ground. So Johnson is using a form of high-tech detergent that loosens the oil, much as soap loosens oil from a cooking pan.

DRAWING NOTICE. Johnson is one of many entrepreneurs who have started small businesses in the oil industry, which is dominated by giants such as Chevron, ExxonMobil, and BP. Another, John Fitzgibbons, went to Russia after studying international relations at Harvard and then started Integra Group. This $200 million-a-year company is focused on the oil field-services market in Russia. Fitzgibbons says that “better technology and services can help extract oil that was inaccessible just a few years ago.”

Business Week