by netfind » Sat 18 Feb 2006, 18:16:57
Steve - Stranded oil is a geologic fact of life that reservoir engineers wrestle with as part of their job description. In the life of an oil field, you basically have oil discovered sitting on top of water (oil is lighter than water), wells punched into the domes where the bouyancy of the water can push the oil out of the ground, and then a very, very slow, controlled advance of the oil/water contact "membrane" over the decades of the usefull life of the reservoir. As the waterflood advances all the way to the top of the reservoir, more and more of the water finds its way through cracks, soft spots, and other anomalies bypassing pockets of oil bearing rock. This produces water flow along with the oil flow out of the wells or "water cut", which is the % of the well flow that's water. By the time the water sweep has nearly run it's course, the water cut has gone from about 10% at the start to 40% or more. Once the field "waters out", oil companies normally move on to newer fields for their bread and butter and install tertiary recovery at these spent fields such as the artificial lift pumps, C02, etc. to coax the stranded oil out. The very big problem with this stranded oil is that it will never be recovered at the high flow rates of primary recovery from a highly pressurized reservoir (3000 psi or so). There's a lot of it, typically the primary recovery gets only about 40% to 65% of the URR (ultimate recoverable resource). But after the reservoir has fizzled, the rest has to be recovered at a trickle if it's recovered at all.
This oil bypassing problem doesn't get much consideration by energy planners and such, but it seems to me that it will produce some ugly surprises. Oil field techs control the water advance and thus the production rate by choking the wells. If you open the thottle too wide for too long, the water advances too fast and much more oil is bypassed. This was a big problem back in the 70s when a decade long demand surge caused OPEC, the swing producer, to overproduce their giant fields; and I think the other elephant producer we depend on heavily today, Russia, may have been seriously overproduced then too. It was so bad, there were secret Congressional hearings in '74 and '79 on Saudi reservoir overproduction and damage being done by the four American majors that were then running Aramco, Saudi Arabia's national oil company (see Simmons' documentation of this in Twilight in the Desert). This probably stranded a lot of oil that everyone seems to think is coming at the high flow rates we've been spoiled by. This is important as we get very close to major fields like the Saudi Ghawar watering out. When pitted against the climbing demand curve, what's important is the RATE of oil coming out of the ground, not how much eventually comes out.
Hope this helps your understanding of stranded oil even if it doesn't brighten your outlook for oil pricing.