To Find Oil, You Have to Drill
Under current policies, global primary energy demand is forecast to grow by more than 40% over the next
25 years. To meet this demand, a wide range of energy resources is required, with oil and natural gas
providing the majority. Yet about half of the conventional oil needed by the end of the next decade has
still to be developed—or even found—and it is possible that conventional non-OPEC oil production
levels may already be reaching a plateau. New oil supplies to fill the deficit will have to come from
more unconventional and difficult-to-reach sources that require new technology for their safe and
economic development.
The situation is similar for natural gas—much of the production needed by 2035 will come from fields
placed on production since 2008. And while considerable conventional sources exist, the vast majority
of the world’s gas resources are unconventional—trapped in shale formations, low-permeability
reservoirs, and coalbed methane formations. Although producing from these unconventional reservoirs
is technologically intensive, the growth in their contribution to today’s energy production has been
dramatic, particularly in the United States.
With costs rising for new supplies of both oil and natural gas, the challenges of matching supply and
demand can only increase. New geographies characterize some of these challenges, including offshore
Greenland and central Sub-Saharan Africa, while extraordinary concentrations of activity can be found
in Brazil, the North Sea, North Africa, Southeast Asia, Eastern and Western Siberia, and the Caspian.
Across these and other areas, the industry is challenged by deeper water, more difficult logistics,
increasingly complex geological settings, and higher degrees of temperature and pressure. The result
is greater difficulty in transforming resources into reserves, and reserves into production.
Given this context, an old industry adage holds truer than ever: If you want to find oil, you have to drill.
But not only do you have to drill, you also have to increase the intensity at which you drill—in terms of
technological sophistication, well and reservoir complexity, and operational efficiency and effectiveness.
Increasing Drilling Intensity—The Role of Technology
Over the last 30 years, one succinct measure of drilling intensity has been the technology that makes
it possible to construct deviated wells that reach 12 km in length and vertical wells that reach a similar
number of kilometers in depth. Another is the technology that positions wells to remain within meters
of a given target or to follow thin reservoir beds closely over considerable lateral distances.
But the need for drilling technology can also be measured by the market for drilling services—a market
that has trebled in only 10 years. With neither the global rig count nor the worldwide production of oil
and gas experiencing similar growth, this increase reflects the increased drilling intensity and technology
needed to sustain and grow oil and gas production. Given the task that lies ahead, even further advances
in drilling technology are required to improve operational performance, reliability, and cost-effectiveness
to in turn reduce overall finding and development costs. These technology advances fall into three areas.
First, new technology must lower technical risk and increase performance in the exploration and
development of conventional hydrocarbons from the world’s remaining underexplored or undeveloped
areas. In the last 10 years, more than half of all new oil and gas fields discovered have been offshore—
a trend that is likely to continue, particularly in deepwater areas.
Second is the technology required to recover the unconventional hydrocarbons that make up an
increasing part of the supply. The need is for better extraction, lower cost, and a smaller environmental
footprint. The doubling of North American land rigs with horizontal drilling capability between 2007
and 2010 demonstrates the extent to which this change is occurring.
The third area for technology development concerns reserves already in production. Prolonging their
exploitation and increasing their ultimate recovery represent a major opportunity. It is here that
increased drilling intensity will have the biggest impact in the short to medium term, with new concepts
such as the Factory Drilling* approach—pioneered by Schlumberger—already proving their worth.
7
