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Could oil production from the US rival Saudi Arabia?

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John Kemp asks whether the oil production from the Bakken formation in North Dakota and Montana rival output from Saudi Arabia's supergiant Ghawar oilfield, the greatest oil-bearing structure the world has ever known?

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November 12, 2012 6:52 by



THREE FORKS FORMATION

Bakken is proving to be one of the most prolific oil-producing patches in the world. It continues to outstrip even the most optimistic forecasts.

At the moment the industry has completed just 5,000 wells in the Bakken at an average spacing of less than 1 well per 1,280-acre unit. But Continental estimates the core could support up to 52,000 wells with four to eight wells per 1,280-acre unit for full development.

Bakken contains about 577 billion barrels of oil and gas, of which about 24 billion barrels should be technically recoverable, according to Continental. But underneath Bakken in the same area is the Three Forks formation, which Continental believes could contain an even greater 900 billion barrels, of which perhaps 32 billion barrels might be technically recoverable.

Continental’s estimates are probably coloured by a developer’s natural optimism. But the company has been the leading innovator in what has become North America’s hottest oil play, and it has been proven consistently right.

More conservative estimates still show that the combined resources of the Bakken and Three Forks are enormous.

CONVENTIONAL VS CONTINUOUS

In a conventional oil or gas system, hydrocarbons are produced in a source rock and migrate through tiny pores or along fault lines before accumulating in a reservoir rock, from which they are produced.

The source rock must have a high proportion of organic material (typically at least 1-3 percent) to generate petroleum. It must be buried to the correct depth and temperature for the organic material to mature into oil (2000-5500 metres, 60-150 degrees centigrade) or gas (anything deeper than 5500 metres, and hotter than 150 degrees).

There must be sufficient cracks or porosity to allow the produced oil and gas to migrate from the source and accumulate in a reservoir rock. And the reservoir must be sealed by a cap to prevent the oil and gas migrating any further, allowing it to accumulate in sufficient concentrations to be extracted profitably.

Source, maturation, migration, reservoir and trap must all come together in exactly the right sequence. If any one of these elements is missing or occurs in the wrong sequence, oil and gas will not accumulate in a discrete pool.

Bakken, Three Forks and other shale plays are what the United States Geological Survey calls “continuous-type” resources.

In these deposits, the oil and gas is extracted direct from a source rock or a much more extensive reservoir rock nearby.

The Bakken, for example, consists of three layers, known as “members”: the upper and lower shales (which are the source of the oil) and a middle sandstone layer (which is the reservoir). Drilling into the shales has been relatively unsuccessful. Most oil is being produced from wells drilled into the middle sandstone member.

BAKKEN CHANGES EVERYTHING

The conditions are less demanding for continuous-type resources than for conventional deposits, which is why shale deposits are distributed much more widely around the world.

The problem, until recently, was that oil and gas could not be extracted profitably from continuous-type resources. Horizontal drilling and hydraulic fracturing have changed the situation, unlocking oil and gas from previously inaccessible tight rock formations with low porosity and poor flow rates.

Conventional super-giants such as Ghawar may never be discovered again, although exploration is pushing into new areas offshore and in the Arctic. But that may not matter if oil and gas can be wrung from more commonly occurring continuous deposits.

Bakken has a long way to go before production overtakes Ghawar. But the play has already defied most expectations that it will slow. At the very least, Bakken will join the world’s largest oil-producing zones next year. In the process, it has changed the oil industry forever.



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