Decline Rates

At the cutting edge of EOR?

This data-file summarises 120 patents into Enhanced Oil Recovery, filed by the leading Oil Majors in 2018. Based on the data, we identify the “top five companies” and what they are doing at the cutting edge of EOR.

We find clear leaders for water-flooding both carbonate and sandstone reservoirs. At mature fields, we think these operators may be able to derive >10pp higher recovery factors; and by extension, lower decline rates, higher cash flows and higher margins.

As more of the world’s oilfields age, having an “edge” in EOR technology will make particular Oil Majors more desirable operators and partners, to avoid the higher costs and CO2 intensities of developing new fields to replace them.

Subsea Robots: the next generation?

This data-file tabulates over 20 next-generation subsea robots, being pioneered around the industry. Each one is described and categorized, including by technical readiness.

These electric solutions could be very material for offshore economics, improving oilfield decline rates and maintenance costs. Innovations include:

Residing subsea for c1-year at a time, by re-charging in subsea “docking” stations. This provides greater availability for lower cost.
Increasing autonomy means these robots can be free-swimming, as a communications tether is no longer necessary, improving ranges.
More intervention work will be conducted, rather than just inspections.

8 of the concepts in our database have all three of these capabilities above. They are at TRLs 5-6, and should be commercially ready in the early 2020s.

The leading companies are tabulated in the data-file, by Major and Service firm (chart below).

These solutions can save c$0.5-1/boe for a typical offshore oilfield, we estimate: performing inspection tasks 2-6x faster than incumbents, as well as halving costs and eliminating the weather-dependency associated with launching-recovering traditional ROVs. For full details, please download the data-file.

Decline Rates: the consensus?

This data-file tabulates market expectations for global decline rates, both their magnitude and their drivers, based on our ongoing survey, linked here.

Global decline rates are expected to average 5.2% in 2020-25, based on the results we have tabulated so far. However, the consensus is broad, with a standard deviation of 2%.

Future declines are expected to be lower than past decline rates, of 5.7%. Although the rise of shale is seen increasing global decline rates, this is apparently being outweighed by the rise of digital technologies and offshore innovations. Hence modestly more participants see 2020-25 oil markets as over-supplied than under-supplied.

Please feel free to disagree, and register your own views. We will then send you a discount code to download this data-file free of charge.

Can super-computers lower decline rates?

can computers lower oil production decline rate

Advanced reservoir modelling can stave off production declines at complex offshore assets. This data-file illustrates how, tabulating production estimates based on a technical paper published by Eni, an industry leader in applying high-speed computing power in its upstream operations.

Specifically, the paper simulates an offshore field-cluster in a single, Integrated Asset Model that covers 31 wells, drilled into 3 reservoirs (each is modelled in detail, with a total of 1.9M reservoir cells), 34 pipes, 4 oil platforms and 3 delivery points. Each iteration of this model takes an average of 3.5-hours to run.

Production can be uplifted by 60% according to the simulation, both in terms of EUR and in terms of year 5-7 production rate. 9pp of the uplift is achieved by simple reservoir optimisation. Another 21pp of uplift is achieved by identifying the key bottleneck, and building a new separation & boosting platform to alleviate it. A further 29pp of uplift comes from optimising the development plan for the new platform.

Emerging digital technologies appear to be keeping LT oil-markets better supplied than many expect, with production upside for the industry’s technology-leaders.

Johan Sverdrup: Don’t Decline

Equinor is deploying three world-class technologies to mitigate Johan Sverdrup’s decline rates, based on reviewing c115 of the company’s patents and dozens of technical papers. This 15-page note outlines how its efforts may unlock an incremental $3-5bn of value from the field, as production surprises to the upside.

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