Alexander Khurshudov: sadly, there aren’t any billions of tons of recoverable reserves in the Bazhenov formation
Moscow. The top priority for the RF mineral reserves development project till 2030 is “putting into operation the previously discovered, explored, but not currently developed deposits of the hard-to-recover reserves associated with the Bazhenov formation, the Domanic horizon and similar formations”.
Alexander Khurshudov, the Oil and Gas Information Agency expert, comments on the problems of developing the Bazhenov formation in West Siberia.
Here is a little foreword. In my recent works I dwelt more than once on the problems of the so-called “shale” oil in the US, including a large oilfield Bakken. In the course of discussions I often felt that my opponents have a reasonable thought: how come, mister, you are only wondering abroad? Is it because a speck in somebody’s eye bothers you much more than a log in your own? Isn’t it time to focus on the problems here in Russia?
And it is time indeed. So today we are going to discuss the largest oilfield in the world in terms of the area and the oil in place. It is quite similar to the second oilfield of this kind, the American Bakken. By analogy with the Bakken I shall sometimes call our formation the Bazhen. Finally, I would like to make this article understandable for a wide audience of Russian readers as usual, so I am asking specialists not to blame me for going into the details, well-known to them.
1. A LITTLE HISTORY AND GEOGRAPHY
The Bazhenov formation is such a large reservoir that there isn’t even a name for it. It could be called the “West-Siberian formation” for it covers the territory of three regions and two districts in Siberia. Its total area (1.2 mln square km) covers half of the large West-Siberian depression. Thousands of oil and gas fields are being operated in this territory, including such giant ones as Samotlor, Urengoy, Priobskoe. They are giants not in terms of their area, but in terms of RECOVERABLE reserves amount.
The cross-section of West Siberia is shown in pic.1. It can be seen that the Bazhenov deposits are traced throughout the whole area. They include very different rock types: limestones, dolomites, sandstones, shales; all of them having significant inclusions of clay. Almost pure clay can sometimes be encountered. The net thickness of the Bazhen is not big, 10-36 m, while the thickness of layers does not exceed 5-6 m. The core samples recovered from the wells, showed very small permeability (from 10-5 to 1 mD), but on the other hand, they contained up to 15% organic matter (kerogen). According to the organic theory of oil origin, the Bazhen is a source rock. It was here that ancient remains gradually turned into hydrocarbons, a part of which then migrated upwards, while the other remained in place with the original organic matter. This process still continues.
The first oil from the Bazhen was received in 1968 with lots of adventures. An exploratory well 12R in Salymskoe oilfield in KhMAD showed a kick of gas-cut oil with the rate of 700 t/d from the depth of 2,840 m. The blowout caused a fire on the rig, which was quickly extinguished. Natural flows of oil from the Bazhenov formation followed in three other oilfields.
However, the formation turned out to be complicated. During the further drilling of the same Salymskoe oilfield , half of the 72 wells drilled there showed very poor flows (15% turned out to be non-productive at all) and only a quarter of them paid quite well. At that very time Samotlor, Fedorovskoe and other richest oilfields in West Siberia were being developed, so the poorly studied Bazhen was postponed till later. It was remembered only in the mid-80s.
2. WHAT DO WE KNOW ABOUT THE BAZHEN
92 oil deposits have been identified in the Bazhenov formation, about 500 mln tons of recoverable reserves are listed in the State Register of Reserves. Rosneft, Gazrom neft, Lukoil are developing the Bazhen, but most of all Surgutneftegaz, which has drilled over 600 wells there. The geologists from Surgut did a huge job studying the Bazhen; seven years ago they summed it up in the form of a wonderful report, which I am using for refence now. The general conclusion is as follows: there is oil in the formation, but producing it under the current tax legislation is non-economic.
Oil creation was accompanied by liberation of energy, so the Bazhenov formation is described by abnormally high temperatures (90-130î Ñ) and pressures (350-460 bar). The oil is very light, but its density varies a lot, from 720 to 840 kg/cubic m. A quarter of the samples turned out to be even lighter than gas condensate; note this fact, we’ll come back to it. If the American Bakken resembles a mince pie, the Bazhen looks more like a layered cake with different fillings (pic.2). Surgut geologists identified 7 types of rock, all of them containing oil, but not all of them capable of yielding it.
Lenses of sandstones with the permeability of up to 10 mD are sometimes encountered here, which gave good, but short-lasting flows. However, the geologists finally agreed that the oil flows usually come from the system of fractures available in the limestones, dolomites and other relatively tight rocks. The initial production rates sometimes boggled the imagination: oil flow rates reached 1200-1700 tpd. There were unique wells, which produced 300-500 and even 700 thousand tons of oil. At the same time 30-40% of the wells did not flow at all, and most importantly, it was impossible to understand the laws which distributed the highly productive zones in the formation. At the time there were no methods that would allow to locate fractures; nowadays seismic surveys attempt to evaluate fractures, but in my point of view their precision is not yet good enough for the Bazhen.
Surgutneftegaz used horizontal and multilateral wells, as well as all the enhanced oil recovery techniques available. The best results and 1.5 mln tons of oil were received in the Ai-Pimskoe oilfield. The average permeability of the wells amounted to 3.6 mD, with the initial production rate of 270 tpd. But even the best wells depleted in 4-5 years, and over 80% of the drilled wells had weak or insignificant flow rates.
The much-lauded multistage hydraulic fracturing (frac) in the horizontal wellbore was also tested in the Bazhen. Five years ago it got established quite well in West Siberia, take Gazprom neft for instance, which successfully performed frac jobs with up to 10 stages in 78 wells. And it’s only the Bazhenov formation that had poor results. In Verkhe-Salymskoe oilfield a well produced 33 tpd after a five stage frac, but in two months’ time the production halved. In Priobskoe oilfield 6 years ago Rosneft conducted seven frac jobs in the horizontal wellbore. The initial production rate (246 tpd) was excellent, but there is no further information on this well due to, I think, a quick depletion of the flow.
As a result, during the past years about 9 mln tons of oil were produced from the Bazhen, which correspond to approximately 10.6 thousand tons per an average well. This is quite a modest value for Siberia, so people lost interest in the Bazhen almost entirely. But then “the shale revolution” began.
3. HOW REVOLUTIONS ARE PROMOTED
I should say that Russia treated shale gas without the due respect. No matter how highly it was spoken of, how praised… The front pages featured enthusiastic “experts” blaming the country for ignoring the latest technology: unlike Poland, which rushed in full sail with Halliburton rigs to harvest the plentiful gas resources, the ignorant Russia was snoring on its Siberian reserves…
We should keep in mind that it’s not altruism that moves such campaigns, but the desire to make piles of money. Western service companies such as Schlumberger, Halliburton, Baker Hughes settled in Russia a long time ago, but have never had a big profit here. Which is no wonder, since their cost of drilling a horizontal well 1,500 m long could be as high as $15 mln, while the price of a large (not even multistage) frac reached a fantastic figure of $600-700 thousand. That is 3-5 times more expensive than the price in our companies and 10 times more expensive than in the US. Of course, the foreigners design the operations using their own software, they control fluid injection with recorders, though an experienced specialist understands that all these features are just for a show and fooling the customer, but they have a very small effect on the result.
We shouldn’t get offended though, for it’s a common practice corporations use in developing countries. Some 60-80 years ago a company would give an aboriginal king, a headman or a sheikh a bunch of glass beads, a nice gun or a fast horse and get their oil dirt-cheap. The sheikhs have advanced a lot since then, have formed OPEC and are now striving to use 70-80% of the oil money in their country. So, all it takes is to foist some expensive equipment and technology, so that the lion’s share of the income could be spent on foreign services. Offshore production facilities, LNG plants suit the purpose perfectly. As for Russia, the “shale technologies” praised by the western and Russian mass media were in store for it. “It was beautiful and simple, as truly great swindles are” – I can’t put it better than O’Henry did.
This way or another, Gazprom did not fall for the shale gas, struggled with the annoying solicitors for a while and then finally decided to content itself with the conventional gas reserves. It has enough of them to last for 70 years, more than anyone in the world. Meanwhile Poland has reached the dead-end driven by the shales.
The shale oil did not make Russia too enthusiastic either. Even when thousands of new wells were drilled in the US, even when the oil production grew by 20%, the Russians did not show much interest and did not rush to buy the technology. Only TNK-BP, being on friendly terms, ordered a hundred 2-3 stage frac jobs in Samotlor, but the fluid production often increased more due to water, than oil, so there was nothing much to be proud of. In the interests of the mighty western service the situation had to be changed. And so it was.
Almost 4 years ago the American Energy Information Administration EIA published their assessment of the world’s shale reserves, and Russia happened to be the main champion. 22% (10.3 bln tons) out of 345 billion barrels were referred to our Bazhenov formation. Though the reserves were called “technically recoverable”, the wide audience doesn’t go into such details. Are they recoverable? That’s great! It doesn’t really matter when to recover them: on Wednesday or on Friday, in 20 years’ or 100 years’ time. Progress will help us.
In my point of view the lure was wonderful. What kind of official would reject such a present? Doubling oil resources, enhancing the country’s global stature, attracting keen investors… And most importantly, it doesn’t take any effort other than punching a hole for a medal… However, some sceptics turned up. Our Ministry of Natural Reserves reacted cautiously to the American figures and modestly admitted that there were no reliable methods to assess these reserves. On the other hand, the rest participants involved were unanimous:
Minister of energy A.Novak, 16.10.2013: “…recoverable reserves in the Bazhenov formation are currently estimated at 11-22 billion tons… Using enhanced recovery methods applied to hard-to-recover reserves Russian companies will have produced about 326 mln tons of additional oil by 2032”.
Academician A. Kontarovich, 23.04.2014: “The main asset of Western Siberia at the new stage of its oil and gas complex development is the oil from the Bazhenov formation”
KhMAD governor N.Komarova, 17.06.2014: “Oil production in the oilfields referred to the Bazhenov formation will bring about 1 billion rubles to the consolidated budget of the Russian Federation”.
To be fair I shall also quote other opinions here:
The director of Energy Center Skolkovo, G. Vygon, 25.06.2013: “The Bazhenov formation…in terms of its geological structure is very different from American tight rocks. Today there is no technology to discover and develop productive deposits. The main perspectives to increase oil production are associated with the low-permeable reservoirs of the Achimov and Tyumen formations, but not with the Bazhen”.
ANGI expert A.Khurshudov, 20.01.2014: In the wells drilled in the Bazenov formation the conditions for hydraulic fracturing are unfavorable… For the operation to be successful the thickness of the permeable layer should be over 10 m, but such are extremely rare in the Bazhenov.
It goes without saying that nobody paid attention to the technical reasoning. The energy center Skolkovo is now closed. What a thankless task it is to oppose the revolution. Three years passed in anticipation of the great perspectives. We may now draw some conclusions.
4. VERY MODEST RESULTS
Gazprom neft experimented with the Bazhen more than others, implementing two projects. In Palyanovskaya area of Krasnoleninskoe oilfields it drilled horizontal wells, increasing the number of frac stages. Last year a 1000 m long horizontal well treated with a 9-stage frac produced 45 t/d of oil. This is too little to cover the expenses. At the moment 9 wells operate from the Bazhen with the average production rate of 37 t/d. Not too bad. The only question is how quickly the production rate will decrease.
More complex wells were drilled in the Yuzhno-Priobskoe field. The length of the horizontal wellbore was 1,500 m, with the number of frac stages increased from 15 to 30. While doing this they used a Russian technology, which is wonderful in itself. The last well was supposed to produce 130 tons of oil per day. There is no data on the wells’ completion and operation.
Surgutnftegaz continued operating their part of the Bazhenov formation. Other companies confined themselves to intentions.
Three years ago Lukoil and the French Total signed an agreement on joint exploration and development of the hard-to-recover reserves of oil from the Bazhenov formation. However, after the sanctions were introduced the French company exited the agreement with apologies. Nevertheless, Lukiol’s subsidiary RITEK is doing an experiment on the thermal gas treatment of the Bazhen in Sredne-Nazymskoe oilfield. During the first experiment five old wells produced 20 thousand tons of oil.
Russneft started a pilot study of the Bazhen in the Sredne-Shapshinskoe oilfield. In 2017 the company intends to drill 16 new wells in three well pads.
The first pilot site for testing enhanced recovery methods on hard-to-recover hydrocarbon reserves was supposed to be created in the Archinskoe oilfeld in Tomsk region. Since then there has been no information on the project. Last year this site was shifted to a place near Khanty-Mansiisk.
And that’s it. Kind of weak for a revolution.
Opponents spitefully claim that the western sanctions don’t let Russia enjoy the shale happiness. This is not true. The sanctions forbid to transfer/sell the technologies, that is why western companies don’t participate in joint projects. The sanctions don’t prevent foreigners to perform the operations, it’s just nobody orders them. Too expensive? Yes, they are. But were they any cheaper before the sanctions?
The reason is that the oil specialists have realized that the Bazhen won’t yield much oil. And now is the time to provide a sufficient explanation.
5. INEXORABLE REASONS
Two major factor prevent producing oil from the Bazhen. The first one is the presence of clay and shale layers within it, which plug the fractures after hydraulic fracturing (pic.3).
In the American Bakken the thickness of permeable sandstones and limestones reaches 36 m. Above and below it there are softer shales, which prevent the fracture from developing outside the formation. In the places where the thickness of the middle Bakken reduces to 10 m, the flows are weak and don’t cover the expenses.
There are no thick permeable layers in the Bazhenov formation. At the best case there are limestones 5-6 m thick. Layers of clay and shale border them. After a frac job they enter the fractures and block them. There is a similar structure in the US as well, that is Monterrey formation in California. First the EIA estimated this layered cake as having 1.7 billion tons of proved reserves, but then cut the estimates by 25 times (!!!) at once. Multistage frac didn’t have results there either, and the oil production didn’t exceed 350 t/d.
The second obstacle is the too small size of the pores, which contain oil. Due to the presence of kerogen the Bazhen rocks are wetted by oil very well. Strong capillary forces need to be overcome to push the oil out of the fine pores.
In conventional formations oil is swept from the pores of 2 to 30 microns. In the Bazhen the pores are 2-3 powers less; according to different esteems, the gaps between the grains amount from 0.005 to 0.4 microns. While the size of large oil molecules, such as asphaltens, amount to 0.02-0.03 microns. These molecules can’t move through the small pores and stay behind. We only get very light hydrocarbons, as a result we recover oil with a very low density. When wetting fine pores with oil capillary pressures of dozens of atmospheres generate. It is a well-known fact: in a glass capillary of 0.1 microns in diameter water spontaneously rises to 300 m. In order to produce oil from such pores we have to create higher pressure gradients, which is impossible in reality.
So, it turns out that in the Bazhenov formation we can only count on the oil contained in fractures. However, they rarely take more than 0.3-0.5% of the rock volume, and these areas are already discovered and depleted. The fracture volume doesn’t usually exceed 0.1% and contains not more than 4-6 thousand tons of oil per a square kilometer. Producing this oil is absolutely unprofitable. Besides, there is no reliable method of producing this oil, for the fractures also get plugged and the flow dies out. It’s time to finish our discussion.
6. DISCOURAGING CONCLUSIONS
The sad conclusion is that there are no billions of tons of RECOVERABLE reserves of oil in the Bazhenov formation. The half-billion, which are listed in the State Register won’t be recovered either. If we manage to produce 20 mln tons of oil during the nearest 20 years, we should take it as blessing. So, what is there? There are dozens of billions of tons NONRECOVERABLE oil.
Nevertheless, the experience of performance complex multistage frac jobs won’t hurt us, we’ll find a better use of it. We should stop making so much fuss around the Bazhen and focus on the tight sandstones, which are plentiful both in the Jurassic and the Cretaceous deposits in Siberia. A strong one corrects one’s mistakes with dignity; let’s leave to for the weak and unwise to persist in their falsehood.