YoungPetro - 15th Issue - Spring 2015 by Young Petro

SPRING / 2015

Editor's Letter

Dear Friends, Our world changes rapidly. Not more than 60 years ago we did not use computers, the Internet or smartphones. Today we cannot even imagine our lives without these things. The same situation is in relation to the energy industry. The petroleum industry was born in the 19th century and from the very beginning it started to develop quickly. Nowadays, it belongs to one of the most dynamic branches. E&P companies implement new technologies, starting from the exploration, through production, ending up with distribution and methods of fuels’ usage. We are now able to exploit petroleum from wells which not that long ago were considered as non-extractable. It is more and more possible that soon we will drill even out of our planet. You can take a closer look at the past and the future of the petroleum industry going through this issue of YoungPetro, especially by reading the two following articles. The first one, The Beginning by our new Editors – Natalia Krygier and Karolina Zahuta, brings you closer to the history of Ignacy Łukasiewicz – the man who built the first oil refinery – and the very beginning of the petroleum industry in Central Europe. The second one, Drilling in the Space by Alina Malinowska and Edyta Stopyra, will take you to the

future, describing research on possibilities of drilling in the Space. One of the most important points in the development of the petroleum industry is exploitation of hydrocarbons from shale formations. It is a method which has a lot of both advantages and disadvantages and approach to which varies from a great enthusiasm to a violent objection. The main problem is that many people still do not have any idea about the technology which is used during exploration and exploitation of petroleum from shale. Agata Gruszczak in the article How to Clean up Fracking’s Bad Reputation? explains how the process of hydraulic fracturing works, describes people’s fears and tries to find the best solution to reconcile both sides. Apart from that, in this issue our Ambassador, Viorica Sîrghii brings us closer to a difficult situation of the Black Sea, big business and complicated systems, which are connected with this small but very important sea area. I hope you will like the topics which we addressed in the issue. Although they may sometimes seem pretty difficult, we have to get used to rough matters and it is essential to know what problems we will have to face in our professional careers. Have a nice reading!

SPRING / 2015

Editor-in-Chief Joanna Wilaszek j.wilaszek@youngpetro.org

Logistics Radosław Budzowski Patryk Szarek

Deputy Editor-in-Chief Maciej Wawrzkowicz m.wawrzkowicz@youngpetro.org

Marketing Barbara Pach Aneta Maruszak

Art Marek Nogieć www.nogiec.org

Ambassadors Alexander Scherff – Germany Tarun Agarwal – India Mostafa Ahmed – Egypt Manjesh Banawara – Canada Rakip Belishaku – Albania Camilo Andres Guerrero – Colombia Moshin Khan – Turkey Ahmed Bilal Choudhry – Pakistan Muhammad Taimur Ashfaq – Pakistan Viorica Sîrghii – Romania Michail Niarchos – Greece Rohit Pal – UPES, India Usman Syed Aslam – India

Editors Agata Gruszczak Natalia Krygier Alina Malinowska Jakub Pitera Edyta Stopyra Karolina Zahuta Science Advisor Tomasz Włodek Proof-readers Paweł Gąsiorowski Aleksandra Piotrowska Aleksandra Woźniak IT Michał Solarz

ISSN

2300-1259

Published by An Official Publication of

The Society of Petroleum Engineers Student Chapter P o l a n d • www.spe.net.pl

Publisher Fundacja Wiertnictwo - Nafta - Gaz, Nauka i Tradycje Al. Adama Mickiewicza 30/A4 30 - 059 Kraków, Poland www.nafta.agh.edu.pl

On Stream 7 Radosław Budzowski

Drilling in Space 10 Alina Malinowska, Edyta Stopyra

The Beggining 17 Natalia Krygier, Karolina Zahuta

How to Clean up Fracking’s Bad Reputation? 20 Agata Gruszczak

The Black Sea – the Next North Sea? 28 Sîrghii Viorica

Economic Development of Pakistan 34 through Shale Gas Production Taimur Ashfaq

Young Professionals Rally for the Youth Event 44 World Gas Conference , Paris

How it works? 46 Maciej Wawrzkowicz

SPRING / 2013

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On Stream – Latest News Radosław Budzowski

The King of Saudi Arabia died – what next for oil prices? Saudi Arabia's King is dead. Abdullah Allah ibn Abd alAziz as-Saud died in January at the age of 90. Oil prices have risen sharply after this information – increased uncertainty is expected on the markets. Reaction to the death of the king can be seen on the stock market in New York. Oil prices are rising rapidly – report stock-brokers. However, we should not expect changes of fuel policy in Saudi Arabia in the near future. "I don't anticipate the Kingdom to make any dramatic changes in its oil policy in the short term," said Fahad Nazer, a former political analyst at the Embassy of Saudi Arabia in Washington, DC. According to Phillip Futures Investment analyst Daniel Ang, the price increase is a result of market uncertainty. However, it's only temporary. Oil prices once again will return to the downward trend, when the new king confirms that the policy of his predecessor will be continued – believes Daniel Ang. Egypt begins shale gas exploration The Egyptian government decided to start the search for shale gas and signed the first agreement regarding the performance of hydraulic fracturing with Shell and Apache companies. The Egyptian Ministry of Petroleum announced that the agreement with Apache and the Egyptian branch of Shell, regarding the implementation of hydraulic fracturing, involves investment of $30M–$40M. It assumes completing 3 wells and fracturing in shale gas exploration in the area of Abu al-Ghardeeq, about 200 km west of Cairo. Yamal pipeline sent 400 billion cubic meters of gas In less than 16 years of its operation, 400 billion cubic meters of natural gas were transported by the Polish sec-

tion of the Yamal pipeline. Such a large amount of gas has been successfully sent despite the fact that only one of the two planned strands has been built. Transmission of natural gas in the Polish section of the Yamal pipeline began after the completion of the linear part of the pipeline with a length of 684 km in November 1999. It is worth recalling that the establishment of the pipeline is the effect of a treaty signed by the presidents Lech Walesa and Boris Yeltsin in May 1992 "between the Republic of Poland and the Russian Federation on the friendly and neighborly cooperation." China believes in the success of shale gas Within five years, the share of shale gas in the total gas production in China is expected to reach as much as 15 percent. Over the last year only, the Chinese have drilled over 200 wells in the rocks that may contain shale gas. In years to come, the number of wells will be increasing at a rate of several hundred per year. Beijing hopes that within five years the total number of wells will exceed 3,000. And that should allow to achieve success. According to geological institutes, China may have the world's largest shale gas resources. They may be even more than 30 trillion cubic meters. This is indicated by the geology of the region. The issue is that exploration works in China started relatively late. Another problem is technology – effective solutions are mostly in the possession of American companies. The Chinese tried to buy the necessary equipment, but American companies have not agreed to this. Hence, Beijing is implementing its own solutions. It is not known, however, if they are effective. Growing energy needs were met by the supply of coal energy. Nevertheless, this led to enormous air pollution, especially in the east of the country. Also keep in mind that last year China agreed to reduce greenhouse gas emissions by almost one-third over the next 20 years. 

SPRING / 2015

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SPRING / 2015

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ææ

Drilling in the Space

Drilling in the Space Alina Malinowska, Edyta Stopyra

For over 50 years, scientists are constantly trying to explore the space in order to better understanding of the Universe and facilities of living on Earth. Accelerating progress of technology is also seen in astronautics, so information about the plans of private flights into space and human habitation off planet Earth is no longer surprising to us. In addition to tourist destinations can also be heard about the space mining to extract raw minerals, which is related to a necessity of more accurate celestial bodies' researches. To know the structure and abundance of planets or asteroids, one of the crucial processes is drilling and coring, which allows sampling of rocks and their transport on Earth.

The Wealth of Space Resources It is well known that space hides many precious and rare elements. Earth's resources relentlessly strive to exhaustion and their value often dramatically increases with the following extraction, as it happens, e.g. with gold or platinum. Therefore, scientific and technological progress tends to bring the technology to the conditions in space to be able to obtain future extraterrestrial natural resources. The asteroids are the most interesting, because they are like a bonanza, as they have in their composition the massive amount of metals such as nickel, iron, platinum, cobalt, etc., as well as gases, e.g. methane useful as a fuel for satellites, or water that can be used as drinking water for astronauts on orbit. Consequently, researchers are constantly working for the possibility of building space mines. Although cosmic operations face many financial, logistical and legal challenges, the number of projects aimed at acquiring these valuable resources is increasing.

From Science Fiction to Reality Do you remember the movie “Armageddon” in 1998, in which Bruce Willis as a driller bravely defended Earth from a huge asteroid heading for our direction? Despite the amount of scientific and technical absurdities visible in the film, part of the scenario became a reality. Namely, first landings on asteroids are already behind us; the last of them took place on November 12th, 2014 at the surface of 67P/Churyumov-Gerasimenko comet, on which Philae lander was embedded by Rosetta spacecraft belonging to the European Space Agency – ESA. True, it was not as impressive as in the movie, because it was an unmanned landing and on a much smaller scale, but the common element was drilling. In this case, the SD2 scientific instrument (Sampler, Drill and Distribution System) was used. SD2 is a drilling device capable of downloading a soil samples of 10– 40 mm³ from a depth up to 23 cm and delivering them to the analyzing instruments. SD2 mechanical unit consists of a set of tools made from carbon fiber, a drill and a rotating carousel. Average power consumption during drilling by SD2 is about 10 W, which corresponds to one hundredth of the power consumed by a standard household drill. Although these figures in comparison to the Earth coring are microscopic, in a cosmic scale it is sufficient to analyze basic properties of the comet's nucleus on the basis of collected material. The samples obtained by SD2 are firstly heated for later properties’ measurement such as density, texture, strength, and thermal properties. Philae lander mission is planned to complete in December of 2015.

Fig. 1 – Philae replica (currently at DLR, Cologne). The red arrow points to SD2 [3]

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Drilling in the Space

Fig. 2 – The first test drilling Curiosity rover's rock “John Klein” [5] In the world there are a few private companies that want to acquire raw materials from the near-Earth asteroids. The company of famous director, James Cameron, intends to make holes on the asteroid in search of platinum. Planetary Resources’ plan envisages the construction of orbital telescopes that would detect asteroids and allow to analysis of their composition well in advance.

Exploring Mars In 2011, NASA launched Mars Science Laboratory (MSL) – an unmanned mission – which objective is to examine the past and present environment of Mars through a series of tests made with Curiosity rover inside Gale Crater. In fact, Curiosity is an automated and autonomous research laboratory communicated with the Earth system that continuously receives data transmitted from the Red Planet. Curiosity is equipped with a hammer drill Powder Acquisition Drill System (PADS) that is responsible for obtaining the samples of powdered rock from its interior, 5 cm below rock’s surface. The drill do both: penetrates the rock and crushes

samples to the appropriate particle size for analytical instruments. Rock powder moves in the sleeve surrounding the rotating drill auger to the input of the CHIMRA. The diameter of the hole in the rock after drilling is 1.6 cm and the depth of the hole – up to 5 cm, depending on the topography of the rock’s surface. The first experimental drilling took place in February, 2013 in the rock named John Klein (in honor of deceased engineer cooperating in the design of the device). Although a small hole had a diameter of only 16 mm and a depth of only 2 cm, it was the first time in history when holes in the rocks on another planet were made. The main drilling took place in “Confidence Hills” rock on September 24th, 2014. Rover hammer drill extracted the sample from a depth of 6.7 cm of Mount Sharp basal layer and preserved the obtained sample of rock dust. The rock powder collected by drilling is meanwhile stored within the sample collecting device and arranged at the end of an articulated boom of rover (CHIMRA). Subjected to drilling rock is on the lowest part of the base layer top, where the implementation of plan’s investigation of higher younger layers exposed on

Alina Malinowska, Edyta Stopyra

Fig. 3 – Grain fractions of lunar soil analog [1] the nearby hills begins. The second sample drilling took place on January 29th, 2015 in the “Mojave 2” rock in the “Pahrump Hills” to a depth of 6.5 cm and a width of 1.6 cm. The results of powder supplied to the CheMin instrument indicate, that the “Mojave 2” has been created in a more acidic waters than “Confidence Hills” rock. Another aim of drilling and testing will be an area definitely chemically differ from the previous substrates.

Moon Exploration The beginnings of the race in the Moon conquest date back to the Cold War. Then the rivalry of two contemporary powers, the United States of America and the Soviet Union, was started. The highlight of so-called “space age” was the mission of Apollo 11, by which time the first man landed on the Moon. This event proved to be a breakthrough, which resulted in further, more or less successful, expeditions aimed at the cosmos discovery. During a man’s stay on the Moon, a lot of research stations and measuring instruments on its surface

was installed. They constantly send down data about its surface, and all processes taking place there. So far, these studies have provided information on the chemical composition most of the lunar surface, and have established the presence of water and resources that can be placed on the cold dark south pole (below 100 K). However, to fully understand the nature of the Moon and its environment, we need to supplement information, which even the current orbital missions (these taking place at a large distance from the Moon surface) cannot provide us. This knowledge is essential in order to prepare future missions involving people, who could stay safely on the Moon for a long time and conduct astronomical observations and geological studies there, so that they could prepare for further study space or even extract lunar mineral wealth. Scientists are working on effective ways to obtain such information. One of them is to create the lowest cost device, that would be able to quickly and efficiently take samples for analysis. The solution may be the use of robots that will land on the

spring / 2015

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lunar surface and obtain a core. To make it possible, it is necessary to test them on Earth while ensuring lunar conditions. This task was taken by Polish researchers.

Moon Dust Regolith – a layer of weathered rock; is formed when solid rock on the surface of the planet and natural satellites is exposed to long physical and chemical processes, changing its structure and chemical composition. Lunar surface is covered with a few meters thick layer of fine regolith. His sources are fragments of rocks formed during meteorite impacts and relentless falling of micrometeorites’ dust on the

Drilling in the Space

surface. The thickness of this layer increases with time, so the largest is on the geologically oldest plateaus, where it reaches 20 meters. Below this true regolith is a region of blocky and fractured bedrock created by larger impacts, which is often referred to as the “megaregolith” (up to few kilometers deep). Based on samples brought from the Moon, Americans have produced first analogs of this land. Because of its extremely high price, researchers from Drilling, Oil and Gas Faculty (AGH UST in Cracow, Poland) recreated in their laboratories a lunar dust, which was named AGK-2010. It mechanically corresponds to this at surface of the Moon. That is a huge success of Cracovian researchers. It is also worth emphasizing that the unit cost of producing of Polish substitute is several times smaller than

Fig. 4 – Automatic core drill visualization [1]

Alina Malinowska, Edyta Stopyra

the purchase of model soil. A creation of lunar dust structure was the first stage of cooperation on the bigger project between AGH UST represented by Drilling, Oil and Gas Faculty and the Space Research Centre – an interdisciplinary research institute of the Polish Academy of Sciences. The search for proper materials lasted over a year. Where they were sought? Among the waste from power plants, foundries, in open-pit mines, quarries. Proportions and names of the materials used to product the lunar soil is a great mystery of creators. The collected sand, dust and other fractions (manufactured only from Polish products) have been treated, then scientists checked their properties including particle size, shear strength, and coefficient of friction and cohesion. To conduct tests in conditions similar to lunar, more than 6 tons of regolith was made. Then Polish researchers built 5-meter layer; it was used for testing a special geological penetrator dedicated to work on the Moon, constructed in the Space Research Centre. This project was completed successfully – who knows, maybe in the future this device will fly to the Moon and take samples for further research?

Another Step – a Drilling Rig The project “Development of automatic core drill model for work in extreme conditions, especially in the space environment” is a continuation of the cooperation between scientists from Cracow and Warsaw. It is financed by the National Centre for Research and Development within the Applied Research Programme. The purpose of this device is sample collecting from the several meters of depth. The designed device should operate on both types of environments: extreme, hardly accessible places on Earth as well as planetary surfaces. Work on machine is split between the three units. Department of Drilling and Geoengineering is responsible for the construction of coring system, which could drill a borehole and collect soil samples under extreme conditions, without human intervention.

"It has, among the others, an ability to collect several small length cores, all with low energy requirements. They can be tested on the board of lander, or can be moved to the tray, which will return to Earth. Then sample will be transported to the laboratory.” – A. Gonet, Professor, Dean of Drilling, Oil and Gas Faculty.

Department of Robotics and Mechatronics develops mobile robot, which task will be autonomously system delivery to the desired location where the hole will be drilled, while the Space Research Centre, PAS – a system to ensure providing of coring drill to the proper depth and storage system for the samples.

„A subject of our research seems to be abstract, but despite this, an interest in the world of this type of equipment is still growing, because the plans of using near-Earth planets require a recognition of soil composition at shallow depths (…). We want to drill up to several meters, because these several meters in the Martian conditions are very important. Why? In the Martian soil in some areas at this depth may be present a frozen water, and its detection shows us the potential territory for base placement." – A. Zwierzyński, Ph.D., Drilling, Oil and Gas Faculty.

So far the results instil optimism, the first tests have undergone successfully. We highly believe that this solution will find application in both: space missions and extreme situations and conditions on Earth. We keep our fingers crossed!

Summary Drilling, mechatronics and space technologies seem not to be connected with themselves in science and technology. However, the scientists still try to discover more extreme places on Earth as well as in the Solar System. To fulfill these objec-

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Drilling in the Space

tives it is necessary to design and develop the appropriate devices.

creation of artificial, so that human could function there.

There are plans for robotic lunar missions that will describe an environment of the Moon, identify resources, and provide a faster and cheaper way to keep our permanent presence on the nearest neighborhood of Earth. Additionally, a man begins the search for alternative planets, which in the future could replace Earth, and their preparation of course requires the right amount of time to create on them natural conditions or to enable the

It is really possible that in the far future through landing on Mars and setting up a base there will be the starting point for exploration and further expansion of the planets, because with the current technology flight time on Mars is very long and this planet is in a relatively short distance from the Earth. There is no doubt that it will take a plenty of time before that happens, but these robotic missions are crucial for the approach of this day. 

References 1. AGH University of Science and Technology. (2014, October). Biuletyn AGH. Magazyn Informacyjny Akademii Górniczo-Hutniczej w Krakowie, 82. 2. Bednarz, S., Rzyczniak, M., Gonet, A., & Seweryn, K. (2013, August). Research of Formed Lunar Regholit Analog AGK-2010. Archives of Mining Sciences, 58(2), 551–556. 3. Di Lizia, P. (2014, April 9). Rosetta Blog. Introducing SD2: Philae’s Sampling, Drilling and Distribution Instrument. Retrieved January 15, 2015 from http://blogs.esa.int/rosetta/2014/04/09/introducing-sd2-philaes-sampling-drilling-and-distribution-instrument/ 4. Heiken, G.H., Vaniman, D.T., & French, B.M. (1991). Lunar Sourcebook. A User's Guide to the Moon. New York, NY: Cambridge University Press. 5. Webster, G., & Brown, D. (2013, February 9). Mars Science Laboratory. Curiosity Rover. NASA Curiosity Rover Collects First Martian Bedrock Sample. Retrieved January 15, 2015 from http://mars.nasa.gov/ msl/news/whatsnew/index.cfm?FuseAction=ShowNews&NewsID=1423

Natalia Krygier, Karolina Zahuta

The Beginning Natalia Krygier, Karolina Zahuta

The Ignacy Łukasiewicz Open-Air Museum of Oil and Gas Industry is situated amidst the forest. You may not know, but that is the place where the petroleum story began in 19th century, the most important industry nowadays. Petroleum which along with natural gas emerged from underground into the surface, filled the locals with awe and inspired their interests at the same time. There were some attempts to examine this resource. It was Łukasiewicz who first began some serious researches on petroleum. Ignacy Łukasiewicz was born in 1822 in Zaduszniki, in the Austrian Empire (after the partition of Poland). He graduated from the pharmacy department at the University of Vienna in 1852. Then he returned to Lvov and worked in a pharmacy called “Pod gwiazdą,” which belonged to Piotr Mikolasch. There he and Jan Zeh were experimenting with samples of petroleum supplied by Jews from Boryslaw. His main goal was to obtain Oleum Petrae album – a very expensive medicine imported from Italy. Crude oil can be separated with physical methods, in this case by fractional distillation, as they

have different boiling and condensation points. Łukasiewicz wanted his invention to be useful for people, so further researches were focused on isolating the fraction from oil which could be used in kerosene lamps. By fractional distillation within the temperature range of 200–250°C he received a preparation with no contain of lighter and other heavy fractions. Isolating the kerosene fraction was a great success. Having obtained kerosene Łukasiewicz was about to construct the paraffin lamp and commissioned the project to a Lvov smith, Adam Bratkowski. First test for this lamps had place during the night of 31 July 1853, when doctors at the local hospital needed to perform an emergency operation, virtually impossible by candlelight. They sent a messenger for Łukasiewicz and his new lamps. The lamp burned so brightly and cleanly that it became obvious that the future of this invention is very promising. Soon afterwards Łukasiewicz moved from Lvov to Gorlice. 1854 was decisive, as Łukasiewicz met Tytus Trzecieski, a landowner who initiated the oil production, and his friend, the owner of Bóbrka – Karol Klobassa. They set up a company and

SPRING / 2015

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The Beginning

then the world’s first oil mine started operations digging the first well in the Bóbrka forest. In 1856, there was such a rich outflow of crude oil that Łukasiewicz had to construct first in a polish land distillery in Ulaszowice. This oil mine was modernized by him through the years, refinery products were distributed in the shops in Cracow, Tarnow and Warsaw.

smoke and soot than other lamp oils, most of which were rendered from animal fat.

Galicia was one of the biggest center of oil and gas industry in the world over a hundred years ago. At the peak of its development (about 1908) Carpathian region became the third largest petroleum producer in the world, after USA and Russia.

Despite difficulties connected with unfamiliarity of geological conditions and, in consequence, problems with setting wells, mines became typical of Galicia’s landscape. In the first decade of 20th century, the area of the Carpathian Mountains was giving 2 mln tons of crude oil a year, which is an unimaginable result as for the times of Łukasiewicz’s and his partners first experiments.

The Carpathian Mountains in Poland abound in oil seeps and Carpathian oil, hand dipped from pits dug in front of the seeps, was burned in street lamps, as early as the 1500s, to provide light in the Polish town of Krosno. Unfortunately, the seep oil was a dark, viscous liquid that stuck to everything. It also burned with a foul smell and gave off more

Attention of first miners was paid mostly to the places where they have observed natural oil leakage. Crude oil have been collected to buckets and used in medical purposes, as a preservative or a basic heating in houses.

Hydrocarbons deposits in this region are locked in anticlines or folds of another type built of rocks from Cretaceous or Paleocene. The oldest well in Poland, Bóbrka, also represents that type of built. Anticline of Bóbrka (also called as the structure

Natalia Krygier, Karolina Zahuta

Bóbrka-Rogi) was the first exploited oil field in the world. Bedrocks in the Carpathian Mountains are mostly slates of Cretaceous or Paleocene. They belong to a number of lithostratigraphic units, mainly menilite shale, speckled shale and dark Lower Cretaceous slate. Reservoir rock are sandstones of the same age as mentioned shale. Many of these early wells were laboriously dug by hand. Others were drilled with spring poles, in which a springy wooden pole was stuck in the ground at an angle and a heavy metal drill bit attached by a cable to the head of the pole. Operators would bounce up and down on stirrups attached to the pole, causing the bit to literally chop a hole into the hard ground. The hole was cleaned by lowering into the hole a specially designed bucket, called a bailer, which was similarly bounced up and down until it filled dirt and cuttings to be hauled to the surface.

Petroleum exploited in Poland is different according to a place of production, or even depends on particular well. Density varies from 0.75 g/cm3–0.943 g/cm3, content of paraffin wax is 2.32 to 9.37%, while sulfur does not exceed one percent. In the forest surrounding Bóbrka since time immemorial the black gunk has been flowing from the ground. Local people have been collecting this and as the time passed – discovered its properties and used to cure animals, preserve wood and iron, protect wheels or lighting. Geological built of this region was not known, neither was known that the mysterious leakage of oil, gas and water came from petroleum sandstones laying thousands of meters under the trees. This state of ignorance lasted almost until the end of 19th century and only later researches explained this phenomenon. So thanks to a happy historical coincident three man – whose stubbornness, patriotism and commitment resulted in the first organized crude oil mine – met and started the development of the world oil industry. 

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How to Clean up Fracking’s Bad Reputation?

How to Clean up Fracking’s Bad Reputation? Agata Gruszczak

Hydraulic fracturing is used as a stimulation method for oil and gas production from lower permeability reservoirs. This process has been successfully used to increase production in many formations which otherwise could not have been produced economically. Hydraulic fracturing system of well stimulation is one of the most important developments in petroleum engineering in recent years. Both drilling horizontal wells and hydraulic fracturing constitute separate technologies that had significant impact on our ability to develop hydrocarbon resources. The combination of these two technologies have resulted in an industry revolution: by employing them not only low permeability reservoirs can be produced, but also all the costs associated with drilling as well as completing horizontal and extended reach wellbores become more competitive when compared to conventional ones. The evolution of this technology incites discussion in our contemporary society and a need for defining some terms concerning the method of shale gas production. I have questioned a group of random people in Poland in order to check what they know about hydraulic fracturing technique.

Results as the Words of Introduction What is surprising most of the respondents support shale gas production on commercial scale, only 2% marked a “no” answer. 60% do not have opinion about fracking’s negative impact on the environment and 20% consider it as meaningful, considerable. The reason for this may be found in the next question: 20% chose the depth of shale gas deposits as 200–500 m and 44% as 500–1000 m. Furthermore, 68% think that shale gas has different properties than natural gas, some of them even noticed lower calorific value, and, what is more, most of them think that drilling the vertical part of the well differs from drilling in conventional formations and is more complicated. For the question concerning the barriers against the commercial shale gas production in Poland most frequently selected answers were: lack of knowledge and equipment, political barriers, public concern about the negative impact of the operation on the environment. This experiment shows that if we want to drill, we need to get the society involved and informed about every action and its

Age 80

Education 80

64%

40 20

16%

20%

26–40

40+

36%

40 20 0

18–25

Secondary Education

University degree

Fig. 1 – Profile of the surveyed

Agata Gruszczak

Type

Component

Purpose

Other uses

acid

hydrochloric acid

helps in dissolving of rock and generating fractures

cleaning swimming poles

biocide

glutaraldehyde

bacteria elimination

disinfectant (used for medical and dental equipment and disinfectant sterilization)

aggregate

ammonium persulfate

reduces viscosity of the slickwater

hair dyes

buffer

pH-adjusting agent

Controls pH to maintain the effectiveness of other components

detergents, soaps

gelling agent

guar gum

increases fluid’s density for proppant suspending

toothpaste, cosmetics

surfactant

isopropanol

reduces the surface tension

glass cleaner, deodorant and hair dyes

Table 1 – Components of the slickwater, purpose of their use and other uses

advantages and disadvantages. That is the purpose of this article.

Back to Basics: What Exactly is Fracking? Fracking or hydraulic fracturing is a mining technique, in which liquid is injected at very high pressure into a wellbore to create small fractures, along which gas can migrate into the well. Many low permeability gas reservoirs are historically considered to be noneconomic due to low production rates. For instance, most vertical wells drilled in tight gas (low permeability) reservoirs are stimulated by using hydraulic fracturing to attain high flow rates. However, in order to de-

plete such reservoir, vertical wells must be drilled at close spacing to efficiently drain the reservoir. Because of that, a large number of vertical wells would be required. In such reservoirs, horizontal wells provide an attractive alternative to effectively deplete tight gas reservoirs and attain high flow rates. Horizontal wells were originally created as a means of enhancing the production by increasing the reservoir contact area. In the case of vertical wells it is the communication of a wellbore with high conductivity fractures. This is how it works. First, once the necessary infrastructure is in place a drilling rig is assembled. Then drilling begins. When the well is drilled, multiple layers of cement and steel casing create an impermeable barrier between groundwater and the well. The well is drilled vertically until it reaches the shale layer. Then horizontal drilling begins. After another cement

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How to Clean up Fracking’s Bad Reputation?

As the resources triangle shows (Fig. 3), permeability increases, while technological requirements and production risk decreases. In order to make unconventional resources viable and profitable hydraulic fracturing is essential.

50 40 30 20 10 0 Yes

Not certain

Fig. 2 – Do you think that shale gas production is safe for environment? casing is put into the horizontal section, the perforating device is inserted to create small holes in the rock. Afterwards fluid is pumped into the wellbore creating tiny fractures, so that gas can migrate into the well. As the resistance to flow in the formation increases, the pressure in the wellbore increases to the value that exceeds the breakdown pressure of the formation that is open to the wellbore. Once the formation breaks, a fracture is formed and the injected fluid begins moving down the fracture. A vertical fracture that propagates in two directions from the wellbore is being created, but it is possible that multiple fractures can be propagated during hydraulic fracturing treatment. In conclusion, hydraulic fracturing techniques are used to increase the productivity index that defines the volumes of oil or gas that can be produced in the well.

Fracking Itself: a Reason to be Afraid? As it’s already been said, without modern methods of hydraulic fracturing natural gas production from shale would not be possible. However, it doesn’t mean that recent American technology has revolutionized the market. Even before the World War II it was observed that increasing contact between the rock and the well causes an increase in gas production. It has been attempted in many various ways. One of the most spectacular was called torpedoing drilling. It was based on putting an explosive device into the well and detonating it close to the production layer. Unfortunately, it rarely brought the desired effect and that is why nowadays it isn’t used. Much better results were obtained by injecting water into the well which resulted in the opening of the natural fractures. In order to avoid gaps closing under pressure of formation, sand was added in the last phase. Moreover, liquid was enriched with the chemicals that increased its ability to penetrate. Now slickwater, as the fracking liquid

Fig. 3 – Resources triangle

Agata Gruszczak

is called, contains 99.5% of water and sand, and 0.5% of chemicals (Fig. 4). Sand used in slickwater is called proppant and is designed especially for fracking process. Proppant or propping agent is used for filling fractures generated during the hydraulic fracturing process. Fractures generated during fracturing are of small width and therefore the material used for filling them needs to have smaller grain diameter than grains used in fracturing fluid for conventional reservoirs. The purpose of using proppant is to keep the fracture opened, because once the pumping operation stops, the pressure in the fracture decreases and the fracture closes. Apart from water and proppant, 0.5% of slickwater ingredients are chemicals. Chemicals perform many functions in a hydraulic fracturing treatment. Although, there are dozens to hundreds of chemicals which could be used as additives, there are a few routinely used in hydraulic fracturing. In the following chart components and their function are listed. What does name ammonium persulfate or guar gum tell you? Unless you are a chemist – rather nothing, but in Table 1 I listed some of the ingredients, purpose of their use and other uses.

Myth Buster Petroleum industry has come a long way in improving its environmental performance. As shale gas extraction has become more complex and its reach expands further into more sensitive environments, the need to equalize between energy development and environmental security is becoming more valid. Through public reach coalitions such as the MSC (Marcellus Shale Coalition), the industry is actively involving communities and promoting fact-based communication. The coalition has published recommended practices relevant to every region, starting from site planning to development and reconstruction. One of the criticisms of shale gas extraction opponents is that companies hide the chemical composition of fracturing fluids. This would protect industry against accusations that those chemicals poisoned water and soil. Popular myth says that the composition of fracking fluids is kept secret so that no one knows what is injected into the formation and thus the environment cannot be monitored for possible contamination. In response, I

Fig. 4 – Components and their functions

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How to Clean up Fracking’s Bad Reputation?

Fig. 5 – FracFocus maps view.

Agata Gruszczak

Fig. 6 – FracFocus, fracking report. Well name: Lippert Unit 1H

found a FracFocus application. In 2011, FracFocus (http://www.fracfocus.org/) initiative has been established. This is a place, where Americans can search information about slickwater components in fracking treatment next to their houses. After choosing a state and operator (you can also type a well number and a well name if you possess such information), list with all the wells appears. Unfortunately, there are so many wells that you may find this way of searching difficult. However, there is a possibility of choosing a map search. Maps used in FracFocus are based on Google Maps technology. I chose Pennsylvania state and clicked in 38 area (Fig. 5). After choosing a single well, you can download a PDF document containing fracturing report (Fig. 6).

Currently, we can find information about more than 15,000 fracturing treatments in this database.

Prevention – the Key to Success Companies engaged in drilling and production have to remember to solve society’s concerns about possible impact on the environment. Compliance with strongly established rules results in winning support for shale development. Below there are some examples of treatments that can be used to minimalize the risk of operations’ impact on the environment in order to achieve public trust.

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Water Management As a source of water for fracturing, surface water or artificially created tanks may be used. Waste water is produced in shale gas operations during the flowback phase, when part of the slickwater returns to the surface after hydraulic fracturing. Water management for hydraulic fracturing requires preparation of the appropriate infrastructure such as pumping stations, pipeline systems and a set of equipment for the purification of waste water. Filtering and reusing waste water not only results in reducing environmental impact, but also reduce total production costs.

Groundwater Monitoring and Gas Emissions Reduction Greenhouse gases are emitted into the atmosphere during venting hydrocarbons at the last stage of the well preparation. Flaring the natural gas results in the transformation of methane into carbon dioxide, which is also a greenhouse

How to Clean up Fracking’s Bad Reputation?

gas. This initiated the need of creating technology that would eliminate the problem. Reduced Emission Completions (REC) technologies can capture gas at the wellhead. RECs are increasingly used by shale gas operators for various reasons, one of them is profit from selling the captured natural gas. RECs help to reduce methane and VOC (Volatile Organic Compounds) emissions during well clearance and can remove the need for flaring. Groundwater monitoring executed before and during drilling provides identification of the potential hazards. It allows us to immediately identify well casing or cementing loss that result in gas or slickwater escaping into soil or groundwater.

Land Development During production operations it is essential to optimally arrange all technological processes on the smallest possible area in order to reduce anthropogenic impact on the environment. In the case of carrying out works by two or more operators they should prepare infrastructure such as roads and pipeline system together. 

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The Black Sea – the Next North Sea?

The Black Sea – the Next North Sea? Sîrghii Viorica

The Black Sea continues to draw interest of international oil companies, including giants such as ExxonMobil, Total, Shell and Repsol. Fewer than 100 offshore wells have been drilled in the Black Sea and, until recently, its deeper waters remained mostly unexamined by seismic surveys. In efforts to counter a drop in onshore production while reducing their reliance on imports from Russia, countries that border the Black Sea have launched bid rounds and entered production-sharing agreements with operators.

**Petroleum-Gas University of Ploiesti

The Black Sea has long been considered very prospective for the petroleum industry, even if the drilling in this area is limited and the success was quite discreet. The industry was further alerted to this potential by a major study undertaken by Purvin and Gertz in 2011, which predicted the development of a Romanian offshore industry on the basis of the potential existence of a 600 billion cubic meters offshore resource.

In late June 2013, OMV Petrom and partner ExxonMobil and Production Romania Ltd. (EMEPRL) announced the completion of a 3D seismic survey over the Neptun Deep block. At more than 6,000 km2 (2,316 square miles), the survey was the largest recorded in the Black Sea.

The exploration in the Black Sea was limited, because the countries that surround its borders have always had a good energy supply from countries as Russia or Turkey, the offshore technology wasn’t up to date and the local politics set up poor terms and conditions for the upstream industry.

Romania – a New Discovery Following the Kaliakra completion, Petroceltic mobilized the GSP Prometeu rig to Romania to drill two exploration wells on the Est Cobalcescu and Muridava concessions, in blocks 28 and 27, respectively. The Cobalcescu South-1 well, spudded at the end of August, is targeting two Miocene intervals that contain a combined 404 Bcf of gas. The second well, Muridava-1, has multiple targets

ÞÞRomania viorica.sarghii@yahoo.com  University  Country  E-mail

in the Eocene, Paleocene and Creataceous formations with combined resources of 169 Bcf. The Muridava concession includes the undeveloped Olimpiskaya discovery.

ExxonMobil operates the drilling program for the deepwater section of the Neptun block, after February 2012 when ExxonMobil and Romania’s OMV Petrom announced the results of Domino-1, Romania’s first deepwater wildcat, in the Neptun East block. At that time, Gerhard Roiss (OMV chief executive) declares that it is the biggest gas find in the company’s history. Just a few months after the Romanian find, elevated levels of activity have become apparent throughout the Black Sea region, particularly in deepwater. The deepwater Domino discovery was the real opportunity for Romania, most exploration since then has been in shallow water. Recent developments include Sterling Resource’s drilling in October 2012 of the Ioana gas prospect in Block XV Midia. Located on the western edge of a large 150 km2 structure, the well targeted the Mid Pontian sandstone formation and gas saturation in both this and in a shallower secondary objective

Sîrghii Viorica

Fig. 1 – The Black Sea region were encountered, but reservoir development was poorer than expected, so further investigation will be required. The second well tested the Eugenia oil prospect in the more northerly Block XIII Pelican permit and preliminary analysis indicates hydrocarbons in Late Cretaceous sandstones, with further interest evident within an Eocene limestone section. The third, shallower but high-risk objective was a large Oligocene slump or fan structure as outlined by seismic. Although drilled downdip to enable exploration of the deeper main objectives, 100m of good quality sandstones with some minor gas shows were encountered, so the Oligocene remains an interesting prospect. Sterling Resources has also mapped prospects in the shallow water part of the Midia block while a new oil structure, Irina, has also been mapped in the Pelican block on trend with Eugenia. Sterling has also evaluated the Anca, Maria and Nadia prospects in water depths of 100–120 m that are believed to be in similar formations to the deepwater Domino discovery.

The general level of interest in the Romanian offshore has been demonstrated by the relatively high number of deals. Sterling Resources, through its Midia Resources SRL subsidiary, operates the Midia and Pelican blocks with 65% interest. Petro Ventures Europe holds 20% interest, while Gas Plus International has the remaining 15% stake. In late 2012, the company announced plans to sell its interest in a deepwater section of the Midia block to ExxonMobil and OMV Petrom for about $29 million; at the end of 2013, the company was awaiting government approval for the farm-down. Petroceltic plans to drill four more exploration wells on the two blocks in 2014.

Bulgaria – a Brighter Future? Since March 2012, Bulgaria has been presenting a high level of interest, when the industry was invited to tender for the deepwater (up to 2,000 m) 14,220 km2 Block 1-21 Khan Asparuh permit, which

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The Black Sea – the Next North Sea?

Fig. 2 – Licensed acreage offshore Romania was eventually offered in July 2012 to a consortium led by Total. During the initial five-year exploration phase for testing a structure proved to have between 700 and 1,400 Bcf potential, two wells are to be drilled. A 3D seismic data acquired over the central area of the offshore shelf Galata permit in 2011 had confirmed the presence of seven structures in the area with a total combined unrisked P50 prospective resource estimate of 125 Bcf, Kamchia, has an estimated P50 of 27 Bcf and a 40% chance of success. At present, production from the Melrose Resources fields off north-eastern Bulgaria accounts for 10–15% of the domestic needs and the Bulgarians hope that the result of this increase in drilling will be gas supply independence in a few years.

recovering gas from Middle Miocene sandstones and proving, as TPAO noted, "the existence of hydrocarbons in the Turkish Black Sea outside the 12-mile territorial waters."

Turkey - a New Partnership

In February 2013, the Turkish government announced that TPAO and Shell had signed a farmin and joint operating agreement to explore the deepwater areas of license 3920, site of the shallow-water Istransca discovery. The agreement gives Shell a 50% interest and operatorship of early stage exploration activities, including acquisition of 1,500 km2 (579 square miles) of 3D seismic and

In September 2012, Turkish Petroleum Corp., or TPAO, announced a gas discovery at the Istransca-1 well in the Western Black Sea license AR/ TPO/3920. The well was drilled in 85-m (279-ft) water depths to a total depth of 3,650 m (11,975 ft),

TPAO has reached agreements with international oil companies over the past few years to explore the Black Sea's greater depths. In 2010, Petrobras, TPAO and ExxonMobil signed a partnership agreement to explore block 3922 (Sinop), where water average depth is 2,200 m (7,218 ft). The partners drilled the Sinop-1 well that year with the Leiv Eiriksson semisub. Also in 2010, Chevron entered a partnership with TPAO to explore the deepwater block 3921. The initial exploratory well, Yassıhöyük-1, was unsuccessful.

Sîrghii Viorica

one exploration well over a three-year period, Shell said in a statement. In June, Reuters reported that TPAO and ExxonMobil were discussing a partnership to explore deepwater in the western Black Sea.

Russia – the Core Region Rosneft, which is owned by the Russian government, has stated that the Black Sea is one of its core regions in its drive for increased resource potential. The company signed a strategic cooperation agreement with Eni in April 2012, whereby the two companies will form a joint venture for the development of the deepwater Zapadno-Chernomoskaya block. Rosneft says the tract hosts multiple prospects and estimates the three largest to have combined reserves of 3.5 Bbo. Drilling is expected in 2015–2016. In 2011, ExxonMobil reached an agreement with Rosneft to jointly develop oil and gas resources in the Russian sector of the Black Sea, with an initial focus on the Tuapse Trough, where Rosneft has identified around 70 prospective structures in water depths ranging from 1,000–2,000 m (3,281– 6,562 ft). A similar agreement with Chevron reportedly fell through. As recently as last June, ExxonMobil had agreed to bear the brunt of the estimated $3.2 billion in initial exploration costs for the company's joint ventures with Rosneft in the Black Sea and Kara Sea, in Russia's far north. Seismic acquisition is complete and interpretation of the data underway with the drilling of the first exploration well planned for 2014–2015.

Ukraine Ukraine was estimated to possess natural gas reserves of 1.1 trillion cubic meters in 2004 and was ranked 26th among countries with proved reserves of natural gas before Crimea was annexed by the

Russian Federation. Its total gas reserves have been estimated at 5.4 trillion cubic meters. Oil and gas production from Skifska, along with another Crimean offshore area known as Foros, could reach the energy equivalent of up to 7 million tons of oil annually. That’s less than 10% of the amount of oil and gas that Norway extracts annually from beneath the North Sea. Still, it totals about 20% of Ukraine’s current annual gas imports, which come mainly from Russia. In August 2012, a consortium of ExxonMobil, Shell, OMV Petrom and Nadra Ukrayny won the right to sign a PSA for the 16,698 km2 Skifska area, pledging to invest $400 million in the initial exploration phase together with a signature bonus of $325 million. Lying adjacent and geologically similar to the Domino discovery, there are high expectations that the Skifska field could produce up to 4 billion cubic meters of gas annually from the end of the decade. Analysts see the exploration projects as a game-changing shift for Ukraine, whose energy inefficient economy is being squeezed by high fuel import prices and whose price disputes with Moscow have twice since 2006 triggered supply disruptions to Europe. Exxon Mobil Corp (XOM) was so confident of prospects in the unexplored Black Sea it has planned to spend $735 million to drill just two deep-water wells off Ukraine’s coast. The outlay comprises a $335 million signing bonus for Ukraine’s government and a promise to spend a further $400 million on seismic surveys and drilling two wells, according to an energy ministry official. The Black Sea is almost untouched by the oil industry, with fewer than 100 wells drilled, compared with more than 7,000 in the North Sea. Improving drilling technologies and increasing regional energy demand is drawing explorers to its challenging waters deeper than 1,000 feet (300 meters), said Philipp Chladek, a Bloomberg Industries analyst. “If you think about where the unexplored areas in Europe are, you have the Black Sea and the Arctic,”

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The Black Sea – the Next North Sea?

said Iain Pyle, an analyst at Sanford C. Bernstein & Co. in London. “The Black Sea is obviously far more accessible.”

tun block. The country plans a new bidding round for eight offshore blocks by the end of the third quarter.

Ukraine planned to sign a completed exploration agreement with Exxon at the end on 2013. The Skifska area covered by the license is adjacent to Romania’s Neptun block where Exxon and partner OMV Petrom SA (SNP) made the Domino-1 gas find in 2012, which showed potential output at about 630 million cubic feet a day.

“Deep-water exploration requires a huge CAPEX, which none of the national companies could afford,” said Oleg Galbur, an oil and gas analyst at Raiffeisen Bank in Vienna. “Oil and gas prices 10 years ago wouldn’t justify it, but now it’s different.”

Experts’ Opinion

The region had until recently been ignored by companies like Exxon and Royal Dutch Shell Plc (RDSA) because Ukraine, Romania and Bulgaria have in the past satisfied their demand for oil and gas through a combination of domestic onshore drilling and imports from Russia. Now seeking to cut dependence on Russia, those countries need the international companies with their technology, cash and know-how for deep-sea drilling, Pyle said.

“In regard to the overall potential of the Black Sea, Domino-1 sets a good precedent,” Kevin Biddle, exploration director for Exxon in Europe, said in an e-mail: “We expect to see exploration programs undertaken in Romania, Bulgaria, Ukraine and Russia in the next few years.”

Analysts credit the surge of interest in the sea to deregulation of local gas markets, proximity to fuel-hungry western Europe and rising energy needs. Romania, where domestic gas prices are four times cheaper than imports, began to liberalize its gas market in 2012, Raiffeisen’s Galbur said.

Richard Scrase, a spokesman for Irving, Texas-based Exxon, said the Exxon plans to start drilling quickly after signing the Ukraine license which will include a bonus of more than $300 million.

Neighboring Ukraine is particularly eager to reduce its reliance on Russian export monopoly OAO Gazprom (GAZPROM). The two countries’ long-standing dispute over gas prices disrupted supplies to Europe in 2009 and left Ukraine vulnerable to decisions taken in Moscow.

“Domino-1 is so substantial that it may allow the country to become a gas exporter after 2018.” Romanian Prime Minister Victor Ponta said at a conference in Bucharest.

With oil above $100 a barrel and onshore supplies waning, former Soviet republics and their ex-communist satellites surrounding the Black Sea are throwing their doors open to Exxon and competitors to search beneath the brackish waters that run as deep as 1.4 miles (2.2 kilometers). The lack of exploration means the International Energy Agency and BP Plc (BP/) have no estimates for the sea’s reserves.

Expenses Exxon and partner OMV Petrom said they plan to invest several billion dollars in Romania’s Nep-

Black Sea exploration is also rapidly advancing in Turkey, where Exxon teamed up with Turkish state-owned energy company TPAO. Shell, Petroleo Brasileiro SA (PBR) and Chevron Corp. (CVX) are all present. The country, which has so far spent more than $2.5 billion on offshore exploration, will increase its exploration budget 13-fold, its energy minister said in April 2013. “The European Black Sea area now has a better chance to unfold its full potential,” Bloomberg Industries’ Chladek said. “The gradual liberalization of the local gas markets will enable companies to earn back justifiable returns.” 

Sîrghii Viorica

Fig. 3 – Eastern and Southern Black Sea

References 1. Bloomberg (2009). Turkish state firm to drill Black Sea in January. 5 October, 2009. 2. Center for the Study of Democracy (2009). Better Governance for Sustainable Energy Sector of Bulgaria: Diversification and Security. Brief No. 18. 8 October, 2009. 3. Deloitte Petroleum Services (2009). 10th Romanian Bidding Round. September 2009. 4. Economic Consulting Associates, Penspen, European Integrated Hydrogen Project (2007). SEE Regional Gasification Study – Draft Final Report. 5. International Court of Justice (2009). Case Concerning the Maritime Delimitation in the Black Sea (Romania vs. Ukraine) – Judgment. General List No. 132. 3 February, 2009. 6. Jewkes S., Yevgrashina L. (2009). Turkey says ready to pay more for Azeri gas transit, Reuters. 19 October, 2009. 7. Kovacevic A. (2007). The Potential Contribution of Natural Gas to Sustainable Development in South Eastern Europe. Oxford Institute for Energy Studies, NG 17. March 2007. 8. RIA Novosti (2009). Ukraine cannot guarantee Russian gas transit next year. 13 October, 2009. 9. Turkish Petroleum Corp. (2009). TPAO Annual Report. p. 11. 2009. 10. U.S. Energy Information Administration (2007). Ukraine Energy Data, Statistics and Analysis. August 2007. 11. U.S. Energy Information Administration (2009). Turkey Energy Data, Statistics and Analysis. April 2009.

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Economic Development of Pakistan through Shale Gas Production

Economic Development of Pakistan through Shale Gas Production Taimur Ashfaq

Shale gas is a mixture of hydrocarbon gases, mostly methane and ethane, tightly locked in the pore spaces of organic-rich, very finegrained rocks such as shale, mudstone or laminated siltstone. Shale is primarily composed of clay and fragments of other minerals such as quartz and calcite. It can be source, reservoir and the seal for natural gas. Shale formations have very low permeability and porosity; normally require stimulation techniques (such as fracturing) to economically produce gas. Economic development of a country depends mainly upon cheap motive power. Pakistan is facing an energy shortfall of 2.4 Bcf and there exist a declining curve between energy supply and demand and it is expected to increase further by 245% until 2022 and this fact is acting as barrier in economic growth of country. Given that survey estimation’s results indicates that Pakistan’s natural gas reserves are expected to fully deplete by 2025 so there is a dire need to pay attention towards development of unconventional energy resources on emergency basis. The aim of this paper is to clearly define the obstacles arising in economic growth of Pakistan and viability of shale gas production in Pakistan by correlating successful shale gas production in the world, as well as economic benefits of shale gas development in Pakistan.

Introduction Natural energy resources are of two types: conventional and unconventional. Conventional resources exist in discrete, well-defined subsurface accumulations (reservoirs), with permeability values greater than a specified lower limit. Such con-

**Univ. of Engineering & Technology in Lahore ÞÞPakistan taimur.ashfaq@rocketmail.com  University  Country  E-mail

ventional gas resources can usually be developed using vertical wells, and generally yield the high recovery factors as mentioned below. By contrast, unconventional resources are found in accumulations where permeability is low. Such accumulations include “tight” sandstone formations, coal beds (coal bed methane or CBM) and shale formations. Unconventional resource accumulations tend to be distributed over a larger area than conventional accumulations and usually require advanced technology such as horizontal wells or well stimulation in order to be economically productive; recovery factors are much lower – typically of the order of 15% to 30% of GIIP. Irrespective of different hurdles these resources are mainly focus of industry due to tremendously growing demand of energy as shown in Fig. 1. In order to understand the complex behavior of shale reservoirs investors should be aware about following characteristics of these reservoirs: 1. they have low permeability ÈÈ show rapid decline rates ÈÈ store gas by sorption and compression ÈÈ complex and possess lateral heterogeneity ÈÈ thick reservoirs ÈÈ cover large area.

Taimur Ashfaq

Fig. 1 – The golden age of gas (World Gas Conference, 2003)

Fig. 2 – Comparison of conventional and unconventional resources (Holditch, 2006)

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Economic Development of Pakistan through Shale Gas Production

Two storage mechanisms exist there: adsorbed gas and free gas. Free gas exists within pores as well as in fractures whereas adsorbed gas may carry more than 50% of total GIP and to production of this gas is restricted due to tightness of the matrix rock. Other important reservoir parameters for shale gas deposits include: 1. 2. 3. 4.

Total Organic Carbon (TOC) Thermal maturity Reservoir thickness Reservoir characteristics (brittleness/mineralogy, porosity/permeability) 5. Free gas fraction within pores, fractures and adsorbed gas fraction within the organic matrix.

Shale Gas Production – a Technical Approach Hydraulic fracturing and horizontal drilling are two major technical procedures (Fig. 3) being used in oil and gas industry since 1940’s, producRegion

ing more than 600 Tcf of natural gas and 7 billion barrels of oil and now specially being utilized to unlock reserves of oil and natural gas present in shale and other tight-rock formations under health safety and environment conditions (HSE). Basic theme is that when shale gas is formed then it gets trapped in the source rock making production technically complicated, because natural gas cannot move within source rock so it becomes necessary to drill horizontally along the gas-containing rock, usually at a depth of 1,500–3,000 meters. After exposing more surface area of reservoir with the aid of horizontal drilling rock in which the gas is locked, is then fractured by injecting a mixture of water, sand and other chemicals including gelled fluids, foamed gels, KCl water, acids etc. at high pressure. This process is known as hydraulic fracturing or fracking. The purpose of sand is to keep cracks or fractures open in order to provide passage for the flow of gas towards surface. The basic benefit of fracking is to enable oil and gas to flow easily from the formation to the well by improving permeability from 0.0001 mD to about 1,000 mD. The type of fracking used depends upon number of factors which are as follows: Types of Gas

CBM

TOTAL

North America

3,017

3,840

1,371

8,228

Latin America

2,116

1,293

3,448

West Europe

157

509

353

1,019

Central and East Europe

118

235

Former Soviet Union

3,957

627

901

5,485

Middle East and North Africa

2,547

823

3,370

Sub-Saharan Africa

274

784

1,097

Asia (including China)

1,215

3,526

353

5,094

Pacific (OECD)

470

2,312

705

3,487

Other Asia Pacific

313

549

862

South Asia

196

235

World

9,051

16,103

7,406

32,560

Table 1 – Distribution of unconventional natural gas resources (Coal Bed Methane (CBM), Shale Gas (SG), and Tight Gas (TG) (Kawata and Fujita, 2001))

Taimur Ashfaq

Fig. 3 – Hydraulic fracturing (EIA, 2014)

Fig. 4 – Shale gas production (EIA/ARI)

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Economic Development of Pakistan through Shale Gas Production

type of well rock properties thickness, depth, temperature and pressure of reservoir choice of fracturing and material cost (the most important deciding factor) well construction.

Successful Shale Gas Production around the Globe Recent “Shale Revolution” in the U.S. and Canada has sparked a global race among different countries to pay attention towards their unconventional resources and many Asian countries, including China and India, having 1,275 and 63 Tcf of technically recoverable shale gas respectively – have started off with emergency basis plans to extract their shale reserves. Table 1 provides a brief statistical overview of unconventional resources around the world, which sparked a global race among different nations to use these reserves in order to use them for improving their economy by reducing energy imports. In this regard only the U.S. and Canada are commercially producing natural gas from shale formations even though other countries have drilled many exploratory tests well in order to seek the nature of these potential in their respective geological area. According to study released by U.S. Upper Indus Basin Formations

Energy Information Administration (EIA) and Advanced Resources International (ARI), China is the only nation outside of North America that has registered commercially viable production of shale gas, although the volumes contribute less than 1% of the total natural gas production in that country. In contrast, shale gas as a share of total natural gas production in 2012 was 39% in the United States and 15% in Canada as shown in Fig. 4. Shale gas dry production in the United States averaged 25.7 (Bcf/d) in 2012, while total dry production averaged 65.7 Bcf/d in Canada. Nobody can deny the importance of natural gas in many sectors of the economy, because it can be utilized for electricity generation, as an industrial heat source and chemical feedstock, and for water and space heating in residential and commercial buildings. It competes directly with other energy inputs in these sectors. But it is in the electric power sector – where natural gas competes with coal, nuclear, hydro, wind and solar – that inter-fuel competition is most intense. Large production of shale gas has benefited U.S. and Canada in lowering gas prices as compared to the other regions of world, because gas prices are set regionally rather globally due to high distribution cost of gas supply with respect to oil. With increasing production of shale gas helped these nations to reduce their dependence on energy imports as a result lower energy prices are safe and sound journey towards prosperity and high industrial production are the

Lower Indus Basin Formations

Middle Indus Basin Formations

Baluchistn Basin Formations

Offshore Formations

Patala

Turk Shale

Warchha

Shales of Rakhshani

Sembar

Chichali

Badin Shale

Sembar

Wakai

Ranikot

Datta

Jhole Shale

Shales of Lower Goru

Kharan

Kingriali

Upper Shale

Hosab

Mianwali

Shales of Middle Sands

Panjgur

Dandot/Sardhai

Lower Shale

Kussak

Shales of Basal Sand

Shales of Salt Range

Talhar Shale, Sembar and Ranikot Table 2 – Shale resources of Pakistan (EIA/ARI, 2013)

Taimur Ashfaq

Fig. 5 – Shale gas production in Canada (NEB) While studying some economic growth aspects through shale gas production in the U.S. and Canada, facts highlighted that about 7,000 U.S. companies are busy on onshore gas production platforms along with approximately 2,000 major drilling operators these companies has employed 2 million people from U.S. who are earning $175 billion in labor income. There are 1.1million active oil and gas wells in the U.S. while Canada has 170,000. Low energy prices have made U.S. an attractive location for investment on industrial scale in the disciplines petrochemicals, fuel, fertilizers etc. It will result in overall economic growth and reduction in energy imports improves which will improve trade balance of these nations.

outcomes. By utilizing shale gas for electricity generation has inactivated their thermal plants which reduce carbon dioxide emission into atmosphere. Now coal is exported to Europe which is helping in boosting their economic growth further. The use of natural gas in the U.S. electricity generation has risen from 19% in 2005 to 30% in 2012, while use of coal dropped from 50% to 39% in the same period due to record low gas prices in 2012. There also exist some constraints regarding environmental concerns about fresh water pollution and methane emission, but these aspects are being monitored by the environmental experts and possible solutions are expected to become public domain soon.

States

Gas TCF

Gas MTOE

Oil Million Barrels

Oil MTOE

Kazakhstan

1,700

30,000

4,200

Kyrgyzstan

0.2

5.6

Turkmenistan

280

5,600

600

Tajikistan

0.2

1.4

Uzbekistan

1,320

594

83.16

Total

431.4

8,628

31,224

4,374.16

Pakistan

586

11,720

227,000

31,780

Table 3 – Asian development Bank (2010). Energy Resources Enormous Development Potential

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Economic Development of Pakistan through Shale Gas Production

There is estimation that unconventional oil and gas production could raise GDP of these countries by 2–4% by 2020 and create up to 1.7 million workplaces. No doubt successful shale gas production around the globe have benefited countries in developing their economic condition by reducing their dependence on energy imports, especially America and Canada which has developed interest in other parts of the world, although the geological, regulatory and economic conditions may differ but fact is that more exploration is required outside these regions for unconventional fuel development.

Shale Resources of Pakistan Nature has blessed Pakistan with geographical area of 796,096 km2, including sedimentary basin area of 665,500 km2 of onshore and 134,600 km2 of offshore, having shale formations that possess potential of producing shale oil and gas.

U.S. Energy Information Administration (EIA) has estimated Shale gas resources of Pakistan 586 trillion cubic feet (Tcf) from which recoverable reserves ranges from 100–105 Tcf (EIA 2013 EIA/ARI World Shale Gas and Shale Oil Resource Assessment). Shale formations are segregated among Upper, Middle, Lower Indus, Baluchistan and offshore basins passing through mature state which predicts their good shale play behavior. According to Pakistan Basin Study, following useful data is obtained regarding shale formations; as shown below in the Table 2. All of above mentioned formations possess potential to produce shale gas which is enough to deal with energy needs of Pakistan for the next 45 years. These reserves are restricted to Southern and Central Indus Basin (Lower Indus Basin), which is located along the Western border with India and Afghanistan. Shale formations of Pakistan possess unique features which are as follows:

Fig. 6 – Highlighted the shale resources of Pakistan

Taimur Ashfaq

Fig. 7 – A brief overview of Power generation capacity of a country (NEPRA’s State of Industry Report, 2012) È

formations exists in those areas where agriculture productivity is negligible population density in those areas is minimum so displacement issues are also negligible pipeline infrastructures are feasible to overcome supply/demand issues reservoirs key parameters are better than other regions.

Recent estimates given by EIA/ARI (2013) and Asian Development Bank (2010) revealed that Pakistan has approximately 11,720 million tons of oil equivalent (Mtoe) of shale gas and if they are recovered then calculated amount will be greater than collected reserves of all Central Asian States as shown in the Table 3.

Energy Shortage – the Largest Barrier in Economic Growth of Pakistan Pakistan has been facing worst energy crises in recent years and with the passage of time this cri-

ses is becoming an important national issue with the potential to significantly affect the economic scenario of country. There exists a huge gap between supply and demand, which has resulted in downfall of industrial progress giving rise to unemployment within the state. Current energy crises have compelled many industries to either close their businesses or to move towards abroad, by leaving millions of people unemployed and retarding economic growth within the country. In addition, improper security measures have also made Pakistan insecure for foreign investment. The entire energy sector is collapsing and constantly putting huge amount of budget loss on economic progress of Pakistan. According to recent report published by the Institute of Public Policy at the Beaconhouse National University, stated that due to lack of electricity we are facing loss of 1.4 trillion rupees per year and this estimate is expected to increase if solid steps are not taken in order to overcome energy shortage. The report further summarizes that load shedding cuts 1–2% from the annual GDP growth rate. Moreover, recent labor force Survey for second quarter of 2012–2013 revealed that unemployment rate in

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Economic Development of Pakistan through Shale Gas Production

Pakistan had increased from 6–7%, which includes 2–10.1% in urban areas, while 4.3–5% in rural areas showing an overall increase of 17%. If we consider the condition of National Grid System, then there exist numbers of technical faults which are also accounting for economic loss. According to World Bank report 2013 titled, Global Tracking Framework 60% of Pakistan was connected to the National Grid in 1990, a figure that rose to 95% in 2012 but major problem is that technical updates were not introduced in accordance with this huge rise. Result is that we are facing now in the form of distribution losses while transmitting electricity from power station to consumers. According to an estimate, there are 20% distribution losses which are putting negative impact on power distribution system.

Role of Shale Gas Production – Concluding Remarks Energy security of country is defined as the capability of country to secure its energy supplies and to meet energy needs at reasonable price in a sustainable manner. Keeping in mind all above mentioned problems related to economy of Pakistan shale gas exploitation can address severe concerns of energy crises and related unemployment issues. According to report published by Sustainable Development Policy Institute of Pakistan (SDPI) development of shale gas will generate around

320,000 jobs against an annual production of 2.9 Tcf of gas and 98% of these jobs will be created during drilling phase and around 2% of these jobs will be created during the production phase, because development of unconventional reservoirs requires a large number of employees and greater investment as compared to development of conventional reservoirs. In contrast to some direct opportunities there are also some indirect jobs which can be generated in the form of progressive economic growth by production of inexpensive electricity. It will also give rise to establishment of those industries that were previously contributing in generation of huge amount of revenues, which can have a directly positive impact on the balance of imports and exports of country. It can be observed that U.S. has generated 600,000 jobs against the annual production of 5.7 Tcf and currently shale gas accounts for 34% of natural gas production which is expected to increase up to 60%. According to EIA estimation shale gas resources of Pakistan around about 586 Tcf with technically recoverable reserves of 100-105 Tcf. It is interesting to compare this fact with Sui gas field serving the energy needs of Pakistan for decades and having estimated original recoverable reserves of 12 Tcf. However, efforts to develop these potential resources have been lacking perhaps due to the economic and technological challenges but in broad sense if we became capable of developing these huge tapped deposits then they will allow for energy security, journey towards stability, economic development need by Pakistan to overcome its existing crises. 

References 1. Abbasi, A.H. (2014). Shale Oil and Gas: Lifeline for Pakistan, Draft Report. Pakistan: Sustainable Development Policy Institute. 2. Haider, B.A., Aizad, T., Ayaz, S.A., & Shoukry, A. (2012). A Comprehensive Shale Gas Exploitation Sequence for Pakistan and Other Emerging Shale Plays. SPE-163123-MS, SPE/PAPG Annual Technical Conference, Islamabad, Pakistan. 3–5 December, 2012. 3. National Energy Board. (2013). Canada’s Energy Future 2013. Energy supply and demand projections to 2035. 4. Oil and Gas Production Handbook. An introduction to Oil and Gas Production. (2006). Oslo, Norway: Havard Devold.

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5. Shale Revolution in North America. EIA Brief Report, 7, 11–15. 6. Spencer, T., Sartor, O., & Mathieu, M. (2014, February). Unconventional Wisdom: An Economic Analysis of US Shale Gas and Implications for the EU. IDDRI, 2(14). 7. The Future of Natural Gas: An Interdisciplinary MIT Study. 12–18. 8. The Herald Issue. (2014, December). Gridlocked, 72–74. 9. U.S. Department of Energy. (2013, April). Natural Gas from Shale: Questions and Answers. 10. U.S. Energy Information Administration. (2011, July). Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays.

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Young Professionals Rally for the Youth Event

conference | World Gas Conference 2015, Paris

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Young Professionals Rally for the Youth Event

Studies with industry leaders show that an ageing oil and gas workforce and the need to attract the brightest and best young talent have become key issues for the sector. In an industry that has always placed great emphasis on innovation and new technological advances, this is creating significant challenges for the future. This June, the World Gas Conference 2015 will host a dedicated Youth Event. Running alongside the main conference, this important event is dedicated to talented students and young professionals in the gas industry between the ages of 20 to 35. At the conference, participants will be encouraged to attend sessions, contribute to workshops and network with their peers. Marc Mopty, 27, Gas Transmission Engineer for a subsidiary of GDF SUEZ and current Project Manager for the Youth event at WGCPARIS2015, is excited about the Event. “It’s a wonderful chance

to meet your peers, who come from many different countries and companies.” he says. “This is something really unique. I don’t know of any other event in the gas industry that provides such a networking opportunity.” Frederic Haas, 30, Performance Specialist at Storengy and member of the Youth Event organisation team, agrees. “I’ve enjoyed working on an exciting project outside of my daily work duties”, he says. “I’m looking forward to meeting like-minded young professionals and getting their insights on our industry.” With a mix of conference sessions, workshops and exchanges of best practice, the Youth Event aims to help its participants forge their own network with others from across the supply chain, and equip them with the skills they need to reach the top of their chosen career.

Organizers: Marc Mopty, Frederic Haas, Chloe Bruyere, David Nedelec

Marc is acutely aware of the talent that currently exists in the sector and the potential of the Youth Event to influence the leaders of the global gas industry: “The goal is the give a young image to the gas industry to attract new youth,” he explains. “The other goal is to show that young people have some great ideas and that they must be heard! We are the best people to explain to leaders how to attract and retain young talent.” One of the focus areas for the Youth Event is how to attract young women into the sector. Chloe Bruyere, 25, currently working at Total, observes that the gas industry used to convey a masculine image, with hard, potentially dangerous physical conditions and specific training. She says: “Through effective communication, women are now able to discuss and consider all the options for their career paths in the gas industry: engineering or business support activities, international travel, field or office based. I believe this image is evolving to become more diverse and that the Youth Event will definitely contribute to this change.” The Youth Event also provides a platform to help the industry propose and design solutions to some of the most pressing issues through its workshop focus. Participants will be challenged to explore one of the four workshops based on the pro-

gramme’s two main topics. They will be invited to propose concrete and realistic solutions and prepare related presentations, speeches or videos supporting their ideas. A jury will finally select winners who will be able to present their work during the main Closing Ceremony. The International Gas Union firmly believes that it is this level of engagement with young people that will help the industry progress in the coming decades. It is clear that participants feel strongly about the future benefit of attending the programme as young professionals. David Nedelec, 26, Gas Strategy Advisor at Total, commented: “I will certainly be able to build on the experiences I gain at WGCPARIS2015 in my career. It is also a fantastic opportunity to develop my network within the gas industry.” WGCPARIS2015 is extending a warm welcome to fellow young professionals attending this June. “This is unique opportunity,” Marc says. “The event happens just once every three years. Moreover, it can be a great occasion to discover or re-discover Paris: one of the most beautiful cities in the world. Our programme is well balanced between hard work to learn about the industry, and informal moments to enjoy Paris while you network: so don’t wait to register!” 

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How It Works?

How It Works? Maciej Wawrzkowicz

Welcome again to “How it works” section – a place for people whose willing to improve the knowledge in a field of technical aspects of petroleum industry! Topic for today? Pipeline engineering! As we know, after the well completion, there is a need to connect our hydrocarbon’s deposit with series of dehumidification, purification, treatment and measurement installations and finally with a customer. The simplest way to do it is to construct a network of pipelines. Defining briefly, pipeline transport is the haulage of substances, goods such as oil or gas and even some materials through the tube called pipe. Due to its safety, efficiency and reliability, this technology of transport is widely utilized. The most commonly transported goods are brine, oil and gas, compressed air, drinking

water and chemical substances like liquefied ammonia or alcohols. In the past, some pipelines in Europe conducted through themselves a milk or even… beer! Taking under consideration petroleum industry, first pipelines had been constructed in the late 19th century, mainly in North America. Oil and gas pipelines are made mainly from steel or plastic tubes which are usually, but not always, buried into the ground. Movement of the medium inside the pipe is possible thanks to implementation of an adequate difference between inlet and outlet pressure. Unfortunately, the flow does not take place without disturbances caused chiefly by drop of the pressure. This may result from an internal friction or the other factors such as individual properties of the medium. Generally, more viscous fluid is, more technical problems occur in

Druzhba Pipeline – Courtesy of Gazprom

Maciej Wawrzkowicz

its transport due to the necessity of counteracting the decline of the pressure in the pipeline. To overcome this, petroleum engineers use to locate specific installations on the line of the pipeline called as pumping or compressor stations. The location of these stations is defined by the topography of the terrain, the type and form of the product being transported, or operational conditions of the network and the main role is to maintain appropriate pressure in the pipeline by building it up. But there is not the only one role of this installations. Pumping stations contain specific safety equipment and personnel to counteract and eliminate any problems along the pipeline route. What is more, pumping stations are often a place for launching maintenance tools, helping to clear the line and inspect the pipeline for any corrosion or other damage from the inside. These are known as “pipeline pigs” and are commonly used not only in Oil & Gas industry. Actually, we may differentiate a few types of such tools e.g. utility, inspection and specialty pigs.

The longest oil pipeline is the Druzhba pipeline starts from Russia and passes through Ukraine, Poland, Czech Republic and finishing in Germany. It’s length is estimated to be 4,000 kilometers! Furthermore, Russians plan to extend it via network of smaller pipelines connecting new countries to its oil supply chain. Though, this kind of transport is relatively safe, pipelines conveying flammable or explosive material, such as natural gas or oil, pose special safety concerns. As a recent example, in 2014, in the night of July 31, a series of explosions originating in underground gas pipelines took place in the city of Kaohsiung, Taiwan. Leaking gas filled the sewers along several major thoroughfares and in afterwards, explosions turned several kilometers of road surface into deep trenches, sending vehicles and debris high into the air, igniting fires over a large area. Because of this, at least 28 people were killed and 286 injured. 

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