August 26, 2011
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№ 6 (June 2011)

Editor's Letter

Earth to Mars! Come in Mars! Find Any Shale Gas Up There?

Pat Davis Szymczak

   Is there life on Mars? We’ll know for sure in 2020. That’s because the European Space Agency will be sending a research probe to The Red Planet, equipped with a chemical laboratory that can draw organic molecules out of rocks.

   The chemical that will find those “little green men” – tiny as they’re likely to be – is a surfactant called Polysorbate-80. It was developed at Imperial University in the UK. And like Velcro, home PCs and other spin offs of the 1969 moon landing – Polysorbate has useful earth-bound applications: it can clean water used in mining oil sands, and other oil and gas production applications that pollute water, such as fraking.

   So it seems that Polysorbate-80 will help us to produce natural gas to heat our homes. It will do that by helping us to clean the water used to produce hydrocarbons so we don’t pollute ourselves into extinction. And you thought it was only hunting Martians!
I heard about Polysorbate-80 at the 2nd European Shale Gas Summit in Warsaw in early June, from Dr. Fivos Spathopoulos, director of Praxxis Ltd., Petroleum Exploration Consultancy in France. He had presented a paper on it uses, particularly in cleaning produced water – a big issue for the oil and gas industry generally, but especially in Europe, given its population density. “Once you get the water out of the reservoir, it will clean quickly, and so there is no pollution,” he said, while a colleague seated near him added: “Green chemistry is the only way forward in Europe.” In other words, Europe is too small and crowded to dump its waste, so waste needs to be recycled.

   Europe is feeling the first hint of a light breeze of what in the U.S. has been dubbed, “The Shale Gale.” Asia is feeling it too, and in our MIOGE issue Oil&Gas Eurasia takes a look at how India, China and Indonesia are trying to forecast to what degree shale can contribute to the overall energy mix in years to come. We’ll talk more about Europe in July-August.

   Though shale produces oil as well, for purposes of our report this month, OGE is keeping the focus on shale gas. Currently, only the U.S. has shale gas in commercial production. That’s largely thanks to the fact that independent producers dominate the U.S. domestic market. Independent operators make decisions quickly; and they have more tolerance for risk in trying unconventional technologies. So while the industry has been able to produce oil and gas for years out of shales (and oil sands for that matter in Tatarstan), the processes needed are expensive and generate lots of pollution – especially polluted water.

   Now though, there is the right combination of market forces, and technological advances. Independent producers in the United States took the plunge first and made gas produced from shale a commercial reality. Global majors and national oil companies the world over, are now following the trend and seeking to farm into shale gas projects in the United States to learn the secrets. (Even Russian companies are looking for deals though the PR coming out of Gazprom continues to insist that shale is just a speculative bubble.) In effect, the unconventional is becoming conventional.

   And as demand for cleaner fuel, and more fuel grows worldwide, shale is being taken far more seriously now outside of the United States.

   Europe’s largest shale gas reserves are in Poland where exploration drilling has already started; France is No. 2, followed by Germany, Spain, Scandinavia and the UK (not necessarily in that order and forgive me if I left anyone out.) Ukraine has tremendous potential too, considering that Poland’s geology extends into Ukraine. But the biggest hurdle right now is a lack of seismic information on which to base exploration drilling, not to mention production itself.

   This is where ION Geophysical comes in. ION will begin a seismic acquisition program in Poland this autumn to provide a detailed subsurface view of the country’s hydrocarbon potential. Called the ION PolandSPANTM, the basin-scale 2-D regional study will, when completed, be added to ION’s inventory of basin-wide ultradeep, seismic data libraries. ION’s Integrated Seismic Solutions group (ISS) has completed similar surveys throughout the world including selected basins in Africa, the Caribbean, Brasil, India, and the Arctic.

   The ION project is a collaborative effort involving the Polish Geological Institute  – National Research Institute (PGI), Institute of Geophysics – Polish Academy of Sciences (IGF), and Institute of Geological Sciences – Polish Academy of Sciences (ING). The U.S. Energy Information Administration estimates Poland’s recoverable shale gas resources at 5.3 tcm, the equivalent of 300 years of Poland’s annual gas consumption.

   If Poland succeeds in developing its shale gas reserves it might even become a natural gas exporter. Yes, you heard right. This was a topic of conversation at the Warsaw conference I referred to earlier.

   But back to MIOGE. I do have to put in a bit of a plug for our Cover Story – my interview with John F. “Jay” Glick, President and Chief Executive Officer of Lufkin Industries. At 100 years old, Lufkin is a Texas icon of a company that is going through tremendous changes as it grows through acquisition to become a global artificial lift solutions company offering “fit to purpose” equipment and services, customized to suit the client. (Watch out Weatherford!)

   Moreover, Lufkin’s strategy is to leverage its global leadership position in production automation – well controllers and variable speed drives including an energy regenerating system that actually returns electricity created by the motion of the pumping unit to the local electricity grid. By integrating the automation into the “fit to purpose” artificial lift system and packing it together with Lufkin services, well operators can pump more crude or natural gas more cheaply and conserve (even produce) energy in the process.

   Oil&Gas Eurasia is proud to be assisting Lufkin during MIOGE to invite production specialists to a series of technology presentations. These presentations will take place in Russian language on Tuesday, Wednesday and Thursday during MIOGE week at 11 a.m., 2 p.m. and 4 p.m. on the Lufkin stand No. 2354 (Pav. 2). And if you’re reading this in advance, you can reserve a seat by visiting www.lufkin.ru/techtalks.

   Lufkin’s Mr. Glick told me that he sees Russia as potentially becoming his company’s most important market in so far as revenue growth for the future is concerned. I’ve been hearing that a lot from other companies as well. So, let’s see what we can do to make that happen! Have a great MIOGE!

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