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Chemron’s New Strategy for Enhanced Oil Production
HOUSTON – Chevron, a major player in the U.S. oil industry, has announced plans to adopt a new method that facilitates the fracturing of subterranean rock in three different wells simultaneously in the Permian Basin. This initiative aims to reduce both the time and cost associated with oil production.
The deployment of this technique, famously known as triple-frac, coincides with Chevron’s intent to boost oil output in the Permian Basin, which is recognized as the largest oilfield in the United States. Despite a forecasted reduction in spending within the region, the company remains optimistic about maintaining growth.
The rapid transformation of the shale oil sector in the U.S. can be largely attributed to advanced technologies. The introduction of hydraulic fracturing, which extensively utilizes the practice of drilling wells and injecting a mixture of sand and water to break rock formations, has successfully made previously inaccessible fossil fuel resources in shale profitable since the late 2000s.
Chevron implemented the triple-frac technique in the Permian for the first time in March of last year. The company is now set to apply this approach to approximately 50% to 60% of its wells in the area, a significant increase from 20% registered last year, as detailed by Jeff Newhook, a completions operations manager at Chevron.
This planned expansion of triple-fracking marks a notable development that had not been disclosed previously.
By utilizing this method, Chevron reported that the time required to complete each well and bring it into production is reduced by 25%, resulting in a 12% decrease in per-well costs. “The primary benefit for us lies in achieving a more efficient use of our capital, which in turn enhances our investment returns,” remarked Newhook.
While fracking two wells concurrently has gained traction among oil producers striving for efficiency, the practice of simultaneously fracking three or even four wells remains relatively uncommon. This perspective was echoed by Thomas Parambil Jacob, senior vice president at Rystad Energy.
Speed in well completion offers a competitive edge, particularly in shale formations where oil output tends to taper off rapidly over time, according to Hugh Daigle, an associate professor in the department of petroleum and geosystems engineering at the University of Texas at Austin.
Over the years, shale producers have consistently sought innovative methods, including enhancements in horizontal drilling and extending drill lengths. Recent advancements have integrated artificial intelligence to analyze drilling data in real-time, leading to improved outcomes.
Implementing the triple-frac technique requires similar volumes of sand and water as traditional fracking; however, this new approach consumes these resources at a quicker pace. Newhook noted that Chevron would require 60% more water and sand per day, presenting logistical hurdles in sourcing these materials, necessitating over ten trucks to supply sand for the well pad each hour.
In addition to the Permian Basin, Chevron has also initiated triple-fracking in the Denver-Julesberg Basin in Colorado.
The company primarily utilizes electric-powered tools for this method, a practice which demands 50% more energy compared to the conventional fracking of a single well, according to Newhook.
Additionally, the triple-frac strategy involves higher initial capital expenditure to ensure that an adequate number of wells are drilled in advance, as highlighted by Daigle.
As of December, Chevron successfully achieved a production rate of 1 million barrels of oil equivalent per day from the Permian Basin, with a goal to increase this output by roughly 10% in the current year, as previously stated by CEO Mike Wirth. Following this year, estimates suggest that growth in Permian production may begin to decelerate as the company shifts its focus toward generating free cash flow.
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finance.yahoo.com