So, if I grow a crack under my neighbors fence, is it still my oil?

For those unfamiliar with the site, this is a weekend techie talk session, where I try and explain some of the things that happen with oil production, in a simplified form. At the end of the post there will be a list of earlier topics that I have covered, and questions can be asked through comments.

Speaking of comments, there was one, from Murray earlier in the week about someone who had drilled a series of dry holes, in an area where earlier drilling had been successful. When he tried to find out why, he discovered that his holes had been drilled with mud, while the earlier holes had been drilled without mud. As I mentioned in the mud piece, one of the objects of having mud in the fluid that is circulated through the well during drilling, is to coat the walls of the hole, so that fluid doesn't escape into the surrounding rock. The down-side to that, of course, is that the mud coats the walls of the rock that has the oil in it, so that the oil can't get out.

One of the ways this can be removed, is basically the same as if your house, or car was covered in mud. On the surface you would just take a pressure washer, and wash off the mud. This works better than a scrubbing brush would, down-hole, since the rock has also been crushed a little at the edges by the action of the drilling bit as it passed. The combination of crushed rock and mud gets into the thin cracks that provide the rock permeability, and a simple mechanical scrubbing can't easily reach into those narrow passages. A high pressure jet of water, however, can and will wash all the debris from the walls of the hole, opening the rock up to its original permeability.

However, (aren't you beginning to hate that word) there is a snag.

. (You can try this if you have access to a pool). While a jet in air can soak your neighbor's cat 20 ft away, when the jet is underwater its range is less than a foot. (It is harder to push through denser fluid). As the back pressure in the well increases with depth, so the jet finds it harder and harder to penetrate, so by the time that you get down a couple of thousand feet or so the range of that jet can be less than an inch. And this can come up a little short, if the tool that is being used is not designed properly, or if the completion has, for example, a metal screen in it that holds the bit away from the rock surface.

One way that this can be solved is to add a polymer to the water. There are various different chemicals that can be used, though these are often called long-chain or high molecular weight polymers since it is this feature that helps them to give added viscocity or cohesion to the water to which it has been added. This means, for example, that such a polymer might double the distance that the jet is effective deep in the well, so that it can now reach and clean the well.

It is for another reason, however, that I brought up he subject of polymers. Here we have our well, and the production isn't quite what we had hoped. So one of the common practices is to frac the well. This means sealing off the layer of rock that the oil lies in, and then applying enough pressure to the well section so that eventually the wall of the borehole cracks, and this crack grows out into the surrounding rock. The section is sealed off by lowering packers into the well, and setting them on either side of the zone to be cracked. They are then inflated, to seal off the zone, and fluid is pumped, under pressure, into this isolated zone at higher and higher pressure, until the rock breaks. (The example cited below has a pressure record in the source paper).

Having the crack extend out into the rock, alone, doesn't do much good, since as soon as the pressure is taken off, the crack closes. (Think of partially splitting a log, after you remove the ax, the split in the wood closes back up, and can hardly be seen). What we want to do is to open the crack, and then prop it open so that it stays that way, and the oil along the path can now find a way out to the well. To prop the crack open we mix a special, relatively large grained sand into the water that we are going to pump up to pressure. However, if we just had the sand by itself in the water, it would settle out in the pump, the lines and the bottom of the well, and that would not be good. So we use one of the polymers, mixed with the water, to increase it's viscocity so that it will also hold the sand in suspension.

The choice of polymer for the job can be fairly complicated since what you want is to firstly get the sand into the fracture, to as great a depth as possible, which means a high viscocity, but then you also want the fluid to flow back out easily, leaving the sand in place, so that the oil can get out through the crack. One way of solving the problem is to pump the sand in with the polymer, (perhaps a guar gum) and then to add a second chemical that breaks down the gum so that if will flow more easily back out.

There is one other problem, the pressures that are used to break the rock are quite high, and so the suspension of water sand and polymer ,must be fed through special pumps in order to get a high enough pressure. But the sand is aggressive, and so it will very rapidly wear out the valves of the pump. And in the past this often meant that the pump parts had to be replaced after every frac job - which made the operation quite expensive.

It is often also used to increase the flow in waterwells and can be more simply used, without the sand, as a way of measuring the pressure in the rock. A more detailed description of an example can be found here

IN2U was a steam injection well drilled to a depth of 1620 ft. and perforated between 1120 and 1450 ft. The hydrofracturing of IN2U lasted 2 days and consisted of a small-volume hydrofracture the minifrac on the first day, followed by a larger volume hydrofracture, the main frac, on the second day. . . . A solution of 2% KCl brine was used as the injection fluid for the early stages of the minifrac. For stage 4, 40 lb cross-linked gel was used. Although no operator notes of the hydrofracture were available, we believe that stages 1 - 3 were performed to initiate the fracture near the wellbore, while stage 4 was performed with higher-viscosity gel in order to find the fracture-reopening pressure and the minimum in-situ stress magnitude. The total volume of injected fluids during the minifrac was 940 bbl. After the minifrac, the well was shut-in for 24 h to allow the injected KCl to percolate into the microfractures created during the minifrac.

The main hydrofracture was created in seven stages over a 4-h period on the second day of pumping. . . . . . During stages 1 and 2, KCl followed by 40 lb cross-linked gel was used to reopen the fracture. During stages 3 - 7, a fluid proppant mixture of cross-linked gel and 20 - 40 Ottawa sand was pumped into the hydrofracture. The total volume of injected fluids and proppant during the main hydrofracture was 2727 bbl.

(20 - 40 is a mesh size and means that the particles are 0.015 to 0.034 inches in diameter).

Hydrofracing can also be used to create fractures in coal seams to get methane out or to inject carbon dioxide for sequestration.

(Grin and I almost made it through the whole story without mentioning that another use for polymers in water is to make it slippery enough that, when sprayed on the road in front of a group of protesters, it makes the street like ice, so that they can't charge the police line - hence the nickname Banana water).

This is part of an ongoing weekend series on technical aspects of oilwell (and natural gas) drilling. Previous posts can be found at::
the drill

using mud

the derrick

the casing

pressure control

completing the well

flow to the well

working with carbonates

spacing your well

directional drilling 1

directional drilling 2

types of offshore drilling rigs

coalbed methane

workover rigs

As ever, if this is not clear, or if there is disagreement then please feel free to post, and I will try and respond.


Have we had a post explainig what "reserves" are (as a legal term in the SEC context) as opposed to potentially producible resources?

the definition of "proven reserves". It is the amount of oil which has actually been located, and which can be extracted from the ground economically. This is a very useful definition for an oil company -- it tells them how much oil they know they have available to sell. Of course there is oil which has not yet been discovered, but no one knows how much or whether your company will be the ones to find it or when. Also note the key word "economically". Much oil has been discovered which is in very small pockets, or very deep underground, or under the oceans, or in remote places. Such oil is sometimes not practical to extract from the ground because it would cost more to get it out than one could get by selling it. What can be extracted economically depends on technology and market conditions.


More definitions of "proven reserves":

There are, Mark Twain famously said, three types of lies: "lies, damned lies, and ... [proven reserves]

Most journalists wouldn't know a proven reserve from Shinola.

By definition, a proven reserve is one that can be developed economically. But many oil reserves fall somewhat below a standard index of affordability


[OPEC defintion of] Proven Reserves:

    an estimated quantity of all hydrocarbons statistically defined as crude oil or natural gas, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Reservoirs are considered proven if economic producibility is supported by either actual production or conclusive formation testing. The area of an oil reservoir considered proven includes those portions delineated by drilling and defined by gas-oil or oil-water contacts, if any, and the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proven limit of the reservoir.
    Crude oil: estimates include oil that can be produced economically through application of improved recovery techniques following successful completion of pilot testing. Estimates do not include:

          oil that may become available from known reservoirs but is reported separately as "indicated additional reserves";
          oil, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics or economic factors;
          oil that may occur in untested prospects; and
          oil that may be recovered from oil shales, coal, gilsonite and other such sources.


When speaking of oil reserves, your readers may not have recognized the flexibility inherent in the reserve definition itself. Typically, oil-producing countries and oil companies report "proven reserves" which are estimated amounts thought reasonably certain to be recoverable from known reservoirs under current economic and operating conditions (my emphasis).

No, though it would be a good idea.  I believe an interpretive SEC page is
here .
Step back,

You are confusing the issue of what I was trying to address.  My question was whether anyone at the TOD had written a basic primer for non-experts as to the definitions of reserves.  What is considered proved from an SEC standpoint and hence publically traded companies must adhere to these guidelines for reporting purposes - vs. what the same companies actually "think" is in the ground vs what countries like Saudi Arabia are able to publish as their "proved" reserves.  Understanding the standards that different reporting entities are governed by helps people make sense of various comparisons.  

I guess in some sense, in a round about fashion, you are making my point.  There are reserves and "reserves".  However, we can characterize the information in its reporting context and make some sense of it.


Well, I think that getting at the truth of these reserves numbers revolves around what the National Oil Companies (NOCs) in various countries want to tell us, and what they know, versus reality. Aramco is the most egregious example but Russia as another. As far as I can see, there's no transparency in their numbers--all we can do is watch the production figures as time passes.

I use the BP 2005 numbers for proved reserves on a country by country basis. Here are their 2005 report production figures.

The problem is that I don't know what the relationship is between the SEC rules as in linked above to the BP reporting and I'm not sure if any of this bears any relationship with reality according to NOC reporting. Here are BP's guidelines for defining their terms with respect to "reserves" and "resources" As far as I can see, estimates of "undiscoverd resources" are akin to predictions made from a Ouija Board.

Then, occasionally I'll look at stuff like BP says global oil reserves growth stalled in 2004 and wonder what's going on.
  Those were not my definitions.
  I still have no clear idea what a "reserve" is,
  let alone what a "proven" reserve is.

Those definitions were plucked from the identified sites, ... obviously with a little spin added by meaux.

From an oil man's point of view, what is a "proven reserve" and how clearly does it tell us whether the unseen but alleged oil "down there" actually is there and actually is recoverable in an "economic" sense?

It seems to me that the plucked definitions are hardly definitions at all, just new mud water tossed on top of old mud water so as to make the situation crystal murky.

So that will be the focus of a future post of mine. What are reserves and when you see a number what should it tell you.
HO - thanks for another great techie post.  Please keep them coming.

As for reserves, and leaving abiotic reserves out of the picture (not too difficult to do with non-existing oil), the argument comes down to one of when peak oil will occur, not if.  Even if we were to accept the USGS blueskying, it only pushes the peak back a relatively short period.  The question of total proven reserves (or even OOIP for that matter) is important to response, but not to the underlying problem.

is important to response should've been is important to the timing of response - sorry, first of the day and I didn't hit preview
THIS is where a lot of wiggle room exists:

" estimated quantity of all hydrocarbons statistically defined as crude oil or natural gas, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions."

Estimated Quantity
Statistically Defined
Reasonable Certainty

The number of variables inherent in statements such as these are tremendous. Reservoirs can become compartmentalized during production. Oil masses can become separated during water floods. Over-production can strand large volumes of oil. What kind of oil is it? Sour? Sweet? How much crap has to be separated from it?

Who estimated the quantity using what methods?
What statistics model was used to define the reserves?
What data was used for input? What was inferred?
Certainty? What the hell is reasonable, and who is the judge? Recoverable? How soon? How much cost? At what volume?

This is NOT an exact science - it's not science at all. It is simply a WAG in clothed in incredible double-speak...

Corporations and governments whose financial futures are tied to their reserves will ALWAYS overstate their reserves simply because it increases the value of their assets. How many reservoir engineers have been told something like, "Joe, don't you think your estimates here are a little on the conservative side? Why don't you go and take another look at it?" When the CEO asks a question like that, what happens? What happens in the face of this type of not-so-subtle pressure?

The assets determine how much money they can borrow to grow their little company. ARAMCO asset values determine how much money the worlds banks will extend to them. Every step along this path is fraught with upwardly mobile numerical abuse. I do not say "potential abuse", as the very definitions invite it, and there is proof of it on the books of every oil company in the world.

Whatever the number that is bandied about publicly, the error will always be on the high side of the reserve picture...

Whatever the numbers people come up with here, I am confident we will never quite do as well in the field as we do on paper.

That assumes two subsuming things:

  1. Each oil or other company is using you definition of "proven reserves" as opposed to their own public or secret defintition, and

  2. They are giving you their true "estimate" numbers as opposed to padded ones.

By the way, where in his mind is NBC's Matt Lauer and why does he not alert the American herd animals about what happened at this exotic island of statutes that he visits today?