[copious.abundance]

Almost 6 years after I started this thread it is starting to come true.

Abundance aplenty.

[peakoilwhen]

hi copious. are u a bio or abio? Where is this vast , seemingly inexhaustible supply of hydrocarbon coming from? Why does Titan have seas of LPGs?

[AdamB]

$this->bbcode_second_pass_quote('peakoilwhen', 'h')i copious. are u a bio or abio? Where is this vast , seemingly inexhaustible supply of hydrocarbon coming from? Why does Titan have seas of LPGs?

[dissident]

https://in.reuters.com/article/us-russi ... NKBN1XV1LB

Bazhenov "shale" oil recovery cost is under $19 dollars per barrel. That is like a conventional reservoir play. By contrast the Canadian tar sands require about $35 dollars per barrel.

[sparky]

.
Some issue with Bazhenov ,
while Russia is under embargo for advanced technology this is not really a problem ,
they have put a man in space
have an oil industry for more than 100 years and are well capable of working out the how and don't

the sites are remote ,
part of the success of the US fracking is the ease getting contractors ,machinery , contractors and supplies quickly on site
Siberia is a wholly different environment cost wise

the government and Gazprom Neft , the oil branch of the conglomerate ,are not rushing things at all
so far they put their capital both financial and human into recovery and squeezing oil from old fields
it's cheaper with little risk
their efforts on Bazhenov are more like playing with the technology and getting a better grasp of the geology

bringing the field into play would collapse the oil price , which is the last thing they want
eventually it will be developed but seems to be kept for later in time

[asg70]

$this->bbcode_second_pass_quote('sparky', '
')bringing the field into play would collapse the oil price , which is the last thing they want
eventually it will be developed but seems to be kept for later in time

[rockdoc123]

There seems to be some uncertainty with respect to what the actual breakeven cost full cycle for the Bazenhov resources would be. I remember seeing a comment from one of the major Russian gas producers that the "lifting" cost for oil from the Bazenhov was the equivalent of $18/boe (they quoted the cost per tonne and the conversion is never very accurate). But what some call lifting cost is what others call production cost when in reality lifting cost just refers to getting the oil out of the ground. In the case of tight shales that does not take into account fracking, propping or other completion costs, it simply is a calculation of what it costs to pump the oil out of the ground. With regards to Canadas unconventional oil (heavy oil) all the treatment is done after lifting and it is more confusing given in the mining part of the oil sands you can't calculate a lifting cost. What would make more sense is to look at the full cycle breakeven cost for Bazhenov resources and compare that to say the full cycle breakeven cost for Permian. This would take into account transportation as well and my suspicion is that is where there will be a significant difference between the two given there is a whole network in place in the Permian that is somewhat absent in the Bazenhov (at least to the extent that would be necessary).
There is also a difficulty in comparing the two areas in that in the US there is a highly competitive service industry where prices are dictated by the market. In Russia this isn't necessarily the case given the central ownership in much of industry meaning prices can be more artificial.

[sparky]

.
actually there is the same problem with assessing a gold mine
do the tracking of roads , clearing of the topsoil , local taxes and building of a base count as cost ?
some do and some don't , often the cost is touted as the net extraction of the ore but doesn't mention many necessary charges

[dissident]

$this->bbcode_second_pass_quote('sparky', '.')
Some issue with Bazhenov ,
while Russia is under embargo for advanced technology this is not really a problem ,
they have put a man in space
have an oil industry for more than 100 years and are well capable of working out the how and don't

the sites are remote ,
part of the success of the US fracking is the ease getting contractors ,machinery , contractors and supplies quickly on site
Siberia is a wholly different environment cost wise

the government and Gazprom Neft , the oil branch of the conglomerate ,are not rushing things at all
so far they put their capital both financial and human into recovery and squeezing oil from old fields
it's cheaper with little risk
their efforts on Bazhenov are more like playing with the technology and getting a better grasp of the geology

bringing the field into play would collapse the oil price , which is the last thing they want
eventually it will be developed but seems to be kept for later in time

[rockdoc123]

$this->bbcode_second_pass_quote('', 'I') don't see why you think the location is an issue. The Bazhenov formation is found in the same region:

[sparky]

.
It seems like we all tend to agree that Bazhenov is an exploitable resource
is it judicious to spend a lot of money on it now ?
probably not , there is neither the need not the return for it in fact it would be financially counterproductive
better to keep it under study , perfect the technical options and wait until the market rise to meet it

that's what any sensible manager would do ,

[coffeeguyzz]

Rocdoc
In a quick followup to your Vaca Muerte/Bazhenov comments, the adoption of American and Canadian cutting edge technology may play a significant role in the pace of future development.

Helmrich and Payne was to send its second Super Spec rig to Argentina, but recent political events have caused a hold.
These ultra efficient rigs can drill way faster, more efficiently than standard rigs.

The snubbing outfit Deep Well Services is sending one of their new, world class rigs to Argentina so as to enable 15,000+ foot laterals to be drilled.

The latest iterations of High Viscosity Friction Reducers is enabling a 50 to 100 use/re-use of flowback and produced water for frac'ing.

While legacy frac spreads are laying up, new, gas fueled spreads (the so called 'e fracs') are actually growing in number.
By simply lugging around a TM2500 turbine, hooking up to field gas, a TON of diesel deliveries are eliminated.

As for the Bazhenov, the relatively high clay content will pose challenges, as will the extensive faulting.
However, the former need for somewhat specialized proppant has been minimized with the latest HVFRs, so more optioality and lowered cost is to be expected.

Biggest issues going forward might be econmic (aka realized pricing) and political environment.
All in all, I donot forsee hydrocarbon scarcity - due to geologic reasons - in the near future.

[rockdoc123]

WRT to Vaca Muerta....these problems of getting the right services in place have been there for about 5 years. The oil and gas is there, the problem is the onerous import restrictions have stopped a lot of companies from finding a way in and the local companies are just not sufficient. Big Red and Big Blue have a hold on the services and it is difficult to get the number of companies you need in there to make things happen. Also, as predicted, the ranchers who own the estancias aren't too happy about their river water being used up for fracking. It is taking longer than anyone would have anticipated.

With high clay content fracking is difficult and you end up in a situation like Poland where the Ordovician shales are full of gas but will not take a frack because of an adverse Poissons ratio to the rock behavior. I don't know about the Bazenhov but if the clay content is high they will have problems. This is something that is not surmountable because you need brittle rock behavior to get a proper fracture network. Time will tell.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('asg70', '')$this->bbcode_second_pass_quote('sparky', '
')bringing the field into play would collapse the oil price , which is the last thing they want
eventually it will be developed but seems to be kept for later in time

[rockdoc123]

I think I've posted this previously, probably in some defense of the unconventional potential against attacks from Pstarr who didn't seem to want to learn anything.
I was involved in the early days of the shale E&P business back in 2006. We were looking for natural gas as the prices had spiked in the US recently due to a shortage of natural gas from conventional reservoirs. Back then costs were very high, the number of fracks in a given well were much lower than today and the length of horizontal was much reduced. As a consequence, if you managed costs you were still flirting with what was economic even at the higher gas prices. It only took a couple of years to drop those costs significantly and that started to open up new basins. But besides technology what some don't realize is one of the major impacts on costs in the US was the plethora of small service providers. These mom and pop companies provided water hauling, waste removal, chemical transport and all manner of services that normally might be part of a bigger contract with a major service company. They were able to operate at lower profit margins and in competition with each other the price for services came down substantially. As well even though Schlumberger and Halliburton controlled the market on the big frack fleet there were still a substantial number of smaller companies that could take up a portion of a contract or smaller frack jobs and hence drive the normal robber baron prices charged by Big Blue and Big Red. So that is an important part of the success story in North America....lots of service companies and competition dropping service costs.
To my mind, this is where the rubber hits the road in other shale basins around the world. At one point the company I was with did a global assessment of shale resources and the bottom line was that there are many places that have attractive plays the problem is invariably economics or access (eg: Algeria has lots of unconventional natural gas but they aren't going to let anyone but Sonatrach have access). Argentina is still the best example I can think of. Huge shale gas and liquid resources in the Vaca Muerta and Los Molles shales. The rocks have performed well under frack and the production achieved in wells so far is very impressive. One of the advantages of parts of the Vaca Muerta fairway was that the formation is extremely thick which means that vertical wells could be put to multi-stage fracs and achieve rates as high as horizontal wells of equal length although the URR comparison wasn't clear. In essence great rocks, full of gas. The problem is that Argentina has one of the most frigged up governments in the world. Its a beautiful country, the people are friendly and generally happy but the left of center (depends on the election as to how far left) government panders to the very powerful unions in the country by driving up wages and banning the import of technical equipment in attempts to foster homegrown technology development. As a consequence few companies besides SLB and HAL have been able to get much in the way of fracking equipment into the country. Companies have tried and failed to bring in equipment like coiled tubing units and specialized wireline logging equipment necessary for horizontal wells. In a discussion with the head of SLB Americas, I was told that the company would only attempt to bring in equipment that it felt OK about never re-exporting as they were sure that it would never be allowed to. So basically a real crap show. For a company trying to develop a shale resource where you need to manage costs lower and have access to lots of rigs and lots of fracking equipment, it is just a bridge too far in Argentina. Basically SLB and HAL control the price and availability of kit and the costs for manpower are generally outrageous. Add to this that oil companies are often subject to completely unrelated labor strikes such as the one by the teachers union in San Jorge a few years back where the teachers decided their best bet to get more money from the government was to blockade all the main roads to the oil infrastructure in the province. All this keeping the country from producing significant volumes of natural gas while at the same time they are importing it from Bolivia at $9/MMBtu and from Qatar at $14/MMbtu in LNG form.
That's just an example of a situation where there are great resources but challenges of the political nature that just make it very difficult at this time to imagine the production will get to a US basin level anytime soon.
The other problem mentioned by OS is a big one as well. Many politicians in various countries have zero understanding of the technical aspects of fracking but see their voting base in the enviro-kooks who have taken "ban fracking" up as their mantra of the day. Rather than take the time to put together an unconventional oriented regulatory environment along with the proper checks and balances imposed by inspections etc they just see the way to keeping their political appointment as banning the technology. In actual fact the process of fracking does not create earthquakes of any magnitude, it is basically impossible and a simple understanding of rock mechanics tells you that. What does have the potential to create earthquakes is indeterminant pumping of disposal water and a complete lack of attention to geomechanics and seismic identification of pre-existing fault zones, all of which are avoidable and can be regulated. So that challenge will be there in many places until such time as that country can't buy its natural gas or liquids at a reasonable price. I'm actually amazed that the UK still resists fracking given they are subject to natural gas prices that spike north of $10/MMBtu in the heating season and gas could be produced and sold internally for less than half of that price.
I guess that long tirade is just to say that the US had some specific conditions that all played together (I forgot to mention the number of idle rigs sitting around that could be put to use at a discount) to help lower costs of extraction whereas many countries have situations where regulations and politics have conspired to drive costs higher. Thats the challenge.

[asg70]

$this->bbcode_second_pass_quote('sparky', '.')
It seems like we all tend to agree that Bazhenov is an exploitable resource

[AdamB]

$this->bbcode_second_pass_quote('asg70', '')$this->bbcode_second_pass_quote('sparky', '.')
It seems like we all tend to agree that Bazhenov is an exploitable resource

[Subjectivist]

$this->bbcode_second_pass_quote('', 'L')ook north

Gazprom Neft operates several fields in Russia’s far north that are expected to drive its growth over the next decade. While the oil price crash has led to numerous R&D investments being shelved, the company has not-so-quietly continued its study work at Bazhenov, one of the world’s largest shale oil formations.

Russia has long hoped to replicate the success of the US in developing shale oil, but a lack of technology, among other factors, has held development back. Its producers looked to partner with leading western oil companies to advance Bazhenov projects, only for these ventures to collapse after 2014 sanctions prevented IOCs from taking part in unconventional oil and gas projects in Russia.

Since then, Gazprom Neft has been working to develop the necessary technologies and expertise on its own. At the forefront, the company is honing its skills in the use of hydraulic fracturing and other unconventional extraction techniques.

“The main goal now is to reduce the unit cost of wells by means of a technology breakthrough and further development of the Russian market, which will enable commercial extraction of oil from Bazhenov” Vashkevich, Gazprom Neft

The firm’s efforts have yielded results. It managed to reduce estimated production costs at Bazhenov to RUB16,000/t (c.$30.40/bl) by the end of last year, Alexei Vashkevich, director for technology development, tells Petroleum Economist. This is almost half the projected cost when work on the project first began in 2017.

Under current market conditions, this is still a considerably high price once transport and other expenses are accounted for. A cost as low as RUB8,500/t will be needed to make the project viable, Vashkevich says, but this milestone is expected to be reached as early as next year.

“The main goal now is to reduce the unit cost of wells by means of a technology breakthrough and further development of the Russian market, which will enable commercial extraction of oil from Bazhenov,” says Vashkevich.

Gazprom Neft said in early June that commercial production of Bazhenov’s oil would start in 2025. It is targeting reservoirs at the Salymsky-3 and 5 blocks, in Russia’s oil heartland of Khanty-Mansiysk, in western Siberia. In-place unconventional reserves at the sites are estimated at 500mn t (3.7bn bl).

Plans to expand the scope of Bazhenov’s development, and the timeframe for exploiting the resource, will likely be reassessed depending on how quickly the global economy stabilises, Vashkevich cautions. But Gazprom Neft hopes to eventually produce up to 7mn t/yr (140,000bl/d) from the project. Unconventional reserves are expected to account for 10pc of the company’s total liquids output by 2030.

[dissident]

The usual racist hate propaganda about Russia's alleged lack of technological capacity. Get f*cked you chauvinist c*nts. The real issue with the Bazhenov formation is that it is fragmented and you do not have the sort of plays you get in Texas, Montana and North Dakota. So the costs to exploit the Bazhenov fragments has been too high to be competitive.

Chauvinist haters should stick to their participation trophy "education" knowhow.