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Shale gas exploitation: Status, problems and prospect

Fig. 2. Annual production of major shale gas plays in the world. Note: The data abroad are sourced from Refs. [14], [15], and the domestic data from Ref. [1]. Except for the Monteney and Muskwa shale gas plays in Canada of which the production data are shale gas production from 2011 to 2012, those of other plays are the data in 2015.

Shale gas exploitation cost

Under the circumstances of tumbling oil prices in recent years, the stable growth of oil/gas production in the USA has mainly benefited from the low-cost and high-efficiency development of shale oil/gas, and the constant technical progress is the main way to achieve the goal. The effective improvement of hydraulic fracturing technique, optimization of well completion design and application of multi-well platform greatly improve the drilling efficiency and single well production and greatly reduce the shale oil/gas exploitation cost [13]. In recent years, through the progress of platform well producing, the tested production of gas wells in the Changning–Weiyuan demonstration zone has increased by nearly 35%, preliminarily realizing the profitable development of shale gas.

As was reported, the oil breakeven price of the major shale oil/gas plays in the USA, such as Bakken and Marcellus, can be lower to USD30–40/barrel and USD3–4/1000 ft3. At present, the shale gas producing cost of domestic oil companies in four blocks of Sichuan Basin is higher than that in the USA [5]. Besides the difficult development and high cost caused by complicated geology, the development is constrained by shale gas developing scale and service marketization insufficiency.

In terms of domestic shale gas development, scale means profit. From the view of shale gas development in the Sichuan Basin, only when production reaches the scale of Jiaoshiba and Changning shale gas blocks (shale gas buried at about 2500 m), shale gas can be developed profitably. Vigorous cultivation of the third-party service market and increase of multi-channel supply and service of drilling and facilities are also an effective way to reduce the shale gas development cost.

Conclusions

1)   Since many problems exist in shale gas development in the complex tectonic areas in South China, such as great risk and low scale merit, efforts should not be made blindly to “increase the investment in shale gas exploration and accelerate sale gas prospecting”.

2)   For the non-oil companies without petroleum exploration and development technology and experience, it is a real reluctance to regard the complex tectonic areas in South China as the first threshold into the oil/gas domain. All the shale gas blocks in such complex tectonic areas are basically characterized by presence of shale without gas, or no gas flow, or no commercial flowrate, and investment without return, so it is suggested to waive the economic penalty on the enterprises that fail to accomplish the bidding commitment and investment.

3)   It should be cautious to launch more shale gas blocks for bidding in the future, especially in the complex marine tectonic areas in South China, where there is no oil exploration base and facility or the shale gas resource endowment is low.

4)   Shale gas production in China will go up a few steps in the coming five years from less than 50 × 108 m3 in 2015 to 300 × 108 m3 in 2020. The goal can be achieved under two preconditions. First, the developed shale gas blocks can continue their high stable production or make up for the decline of old wells by drilling new wells, and the new wells are expected to copy the high production of old wells or new stimulation technology is adopted to further tap the potential of old wells. Second, and the most important, a new batch of shale gas replacing zones/blocks are discovered and put into scale development. These are also a resource basis to maintain the stable development of shale gas in the USA under the tumbling oil prices.

5)   The deep shale gas resources buried below 3500 account for more than 65% of the total in China. In the southern Sichuan Basin, where the Lower Paleozoic marine shale gas resources are the enrichment, the shale gas buried below 3500 m is dominant. The development of deep shale gas exploitation technology is the key and hope for the shale gas production growth in the “13th Five-Year Plan” period.

6)   In terms of the future and the prospect of shale gas industry in China, the issues of risk and scale profit in shale gas development should be envisaged prudently and scientifically, and the experience and lessens should be summarized from exploration failures in many blocks during the “12th Five-Year Plan” period. Moreover, more efforts should be exerted on the geological evaluation of shale gas and the developing engineering technologies, the basic procedures of shale gas exploration and development should be followed, and the realistic industry goal should be established rationally. In this way, a sustained and healthy development of domestic shale gas industry can be ultimately realized.

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E-mail address: [email protected]

Peer review under responsibility of Sichuan Petroleum Administration.

https://doi.org/10.1016/j.ngib.2017.12.004

2352-8540/© 2017 Sichuan Petroleum Administration. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 

Emanuel Martin
Emanuel Martin is a Petroleum Engineer graduate from the Faculty of Engineering and a musician educate in the Arts Faculty at National University of Cuyo. In an independent way he’s researching about shale gas & tight oil and building this website to spread the scientist knowledge of the shale industry.
http://www.allaboutshale.com

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