Shu Jiang | Geology Reports

USGS2020

Energy and minerals division tight oil and gas committee: Activities and commodity report for 2019-2020

In 2019, total daily tight oil and gas production increased in the United States month over month, with annualized growth of 14% for oil and 12% for gas. Those gains leveled off in the first quarter of 2020 due to aggressive price competition and increases in international production. Then came the pandemic with a substantially larger dose of economic turmoil, driving down demand due in part to shelter in place orders and safety concerns around travel. Between March and May, tight oil and gas production dropped by nearly 2 million bpd and almost 5 Bcf/day before beginning to recover. Production has continued to increase for the most part through the second half of 2020, but drilling remains subdued throughout most of the U.S. and uncertainty around long term demand along with the current price environment and general state of the economy has contributed to layoffs throughout the industry. Some shale-gas production has declined recently, but a few areas have seen expansion due to construction of LNG facilities along the East Coast of the U.S. (e.g., the Haynesville Formation). Current U.S. shale-gas production is still higher now than in 2019, with daily production of almost 71 Bcf as of October 2020 driven in large part by increased production from the Marcellus Shale in the Appalachian Basin and shales within the Permian Basin. Shale liquids production is down by around a million bpd to approximately 7.1 million (September 2020; U.S. EIA) from pre-pandemic production levels at the end of 2019 and beginning of 2020. Tight oil production remains dominated by plays in the Permian Basin as well as the Bakken and Eagle Ford Formations. On the development and production front, new enhanced oil recovery approaches for tight shale reservoirs are being more widely implemented. Natural gas or CO2 injection is currently being utilized in the Bakken Formation, Eagle Ford Formation, Anadarko Basin, and the Permian Basin to optimize injection sequences and boost recovery. Refracturing of existing wells to reduce drilling costs, improve production, and prolong well productive life has also begun to occur more widely in developed plays. International interest in exploiting hydrocarbons from unconventional reservoirs continues to develop, with active exploration projects on most continents. Europe remains relatively underexplored as compared to North America, although a total of 141 exploration and appraisal wells with a possible shale-gas exploration component have been spudded, including horizontal legs from vertical wells. Shale exploration has made a breakthrough in China with shale gas output in 2019 of 10 billion cubic meters (35.3 Bcf), 60% of which was produced from Sinopec’s Fuling Shale Gas field. Lacustrine shale oil exploration has also been successful in the Sichuan and Ordos Basins in central China, Junggar and Tarim Basins in northwest China, and Songliao Basin in north China, and Bohai Bay Basins in northeast China as of 2018. South America’s potential as an unconventional shale gas and oil province is mainly in Argentina and Brazil, where the production from Neuquen Basin’s tight shale of the Vaca Muerta Formation has been steadily increasing since 2016, but only 4% of the shale resource has been developed thus far. According to International Energy Agency’s report in 2013, Brazil holds the 9th largest unconventional gas reserves. Brazil has shale oil and gas potential in the Parana, Solimoes and Amazon Basins and is actively producing from the oil shale unit of the Irati Formation. In 2019, the Brazil energy ministry launched REATE 2020 to boost onshore investments that include the expectation of drilling an experimental unconventional well in the northeast region. For this inaugural report, the new AAPG EMD Tight Oil and Gas Committee (TO&G; formerly the Shale Gas & Liquids and Tight Gas Sands committees) has developed new commodity report requirements for contributors. This includes shorter annual reports focused on new developments, play concepts, along with the typical updates on production and new drilling in the play areas they cover. We are also asking contributors to collect background geologic and production related information into a document that summarizes important features of the plays they cover that will be stored on the TO&G webpage along with our commodity reports. TO&G is currently working to expand the number of contributors to cover more play areas and replace committee and advisory board members that have recently stepped down. Changes to committee leadership occurred in October as recent chairs transition to EMD elected positions.

Activities and Commodities Report↗

USGS2015

Unconventional energy resources: 2015 review. Shale gas and liquids

Introduction As the source rocks from which petroleum is generated, organic-rich shales have always been considered an important component of petroleum systems. Over the last few years, it has been realized that in some mudrocks, sufficient hydrocarbons remain in place to allow for commercial development, although advanced drilling and completion technology is typically required to access hydrocarbons from these reservoirs. Tight oil reservoirs (also referred to as continuous oil accumulations) contain hydrocarbons migrated from source rocks that are geologically/stratigraphically interbedded with or occur immediately overlying/underlying them. Migration is minimal in charging these tight oil accumulations (Gaswirth and Marra 2014 ). Companies around the world are now successfully exploiting organic-rich shales and tight rocks for contained hydrocarbons, and the search for these types of unconventional petroleum reservoirs is growing. Unconventional reservoirs range in geologic age from Ordovician to Tertiary (Silverman et al. 2005 ; EIA 2013a ).

Natural Resources Research↗

USGS2015

Introduction to special section: China shale gas and shale oil plays

In the last 10 years, the success of shale gas and shale oil productions as a result of technological advances in horizontal drilling, hydraulic fracturing and nanoscale reservoir characterization have revolutionized the energy landscape in the United States. Resource assessment by the China Ministry of Land and Resources in 2010 and 2012 and by the U.S. Energy Information Administration in 2011 and 2013 indicates China’s shale gas resource is the largest in the world and shale oil resource in China is also potentially significant. Inspired by the success in the United States, China looks forward to replicating the U.S. experience to produce shale gas to power its economy and reduce greenhouse gas emissions. By 2014, China had drilled 400 wells targeting marine, lacustrine, and coastal swamp transitional shales spanning in age from the Precambrian to Cenozoic in the last five years. So far, China is the leading country outside of North America in the viable production of shale gas, with very promising prospects for shale gas and shale oil development, from the Lower Silurian Longmaxi marine shale in Fuling in the southeastern Sichuan Basin. Geological investigations by government and academic institutions as well as exploration and production activities from industry indicate that the tectonic framework, depositional settings, and geomechanical properties of most of the Chinese shales are more complex than many of the producing marine shales in the United States. These differences limit the applicability of geologic analogues from North America for use in Chinese shale oil and gas resource assessments, exploration strategies, reservoir characterization, and determination of optimal hydraulic fracturing techniques. Understanding the unique features of the geology, shale oil and gas resource potential, and reservoir characteristics is crucial for sweet spot identification, hydraulic fracturing optimization, and reservoir performance prediction. Even though China shale gas and shale oil exploration is still in an early stage, limited data are already available. We are pleased to have selected eight high-quality papers from fifteen submitted manuscripts for this timely section on the topic of China shale gas and shale oil plays. These selected papers discuss various subject areas including regional geology, resource potentials, integrated and multidisciplinary characterization of China shale reservoirs (geology, geophysics, geochemistry, and petrophysics) China shale property measurement using new techniques, case studies for marine, lacustrine, and transitional shale deposits in China, and hydraulic fracturing. One paper summarizes the regional geology and different tectonic and depositional settings of the major prospective shale oil and gas plays in China. Four papers concentrate on the geology, geochemistry, reservoir characterization, lithologic heterogeneity, and sweet spot identification in the Silurian Longmaxi marine shale in the Sichuan Basin in southwest China, which is currently the primary focus of shale gas exploration in China. One paper discusses the Ordovician Salgan Shale in the Tarim Basin in northwest China, and two papers focus on the reservoir characterization and hydraulic fracturing of Triassic lacustrine shale in the Ordos Basin in northern China. Each paper discusses a specific area.

Interpretation↗