The DNA of oil wells: U.S. shale enlists
genetics to boost output
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[March 28, 2017]
By Ernest Scheyder
HOUSTON (Reuters) - A small group of U.S.
oil producers has been trying to exploit advances in DNA science to
wring more crude from shale rock, as the domestic energy industry keeps
pushing relentlessly to cut costs and compete with the world's top
exporters.
Shale producers have slashed production costs as much as 50 percent over
two years, waging a price war with the Organization of the Petroleum
Exporting Countries (OPEC).
Now, U.S. shale producers can compete in a $50-per-barrel oil market,
and about a dozen shale companies are seeking to cut costs further by
analyzing DNA samples extracted from oil wells to identify promising
spots to drill.
The technique involves testing DNA extracts from microbes found in rock
samples and comparing them to DNA extracted from oil. Similarities or
differences can pinpoint areas with the biggest potential. The process
can help cut the time needed to begin pumping, shaving production costs
as much as 10 percent, said Ajay Kshatriya, chief executive and
co-founder of Biota Technology, the company that developed this
application of DNA science for use in oilfields.
The information can help drillers avoid missteps that prevent maximum
production, such as applying insufficient pressure to reach oil trapped
in rocks, or drilling wells too closely together, Kshatriya said.
"This is a whole new way of measuring these wells and, by extension,
sucking out more oil for less," he said.
Biota's customers include Statoil ASA, EP Energy Corp and more than a
dozen other oil producers. Kshatriya would not detail Biota's cost, but
said it amounts to less than 1 percent of the total cost to bring a well
online.
A shale well can cost between $4 million and $8 million, depending on
geology and other factors.
Independent petroleum engineers and chemists said Biota's process holds
promise if the company can collect enough DNA samples along the length
of a well so results are not skewed.
"I don't doubt that with enough information (Biota) could find a
signature, a DNA fingerprint, of microbial genomes that can
substantially improve the accuracy and speed of a number of diagnostic
applications in the oil industry," said Preethi Gunaratne, a professor
of biology and chemistry at the University of Houston.
Biota has applied its technology to about 80 wells across U.S. shale
basins, including North Dakota's Bakken, and the Permian and Eagle Ford
in Texas, Kshatriya said. That is a tiny slice of the more than 300,000
shale wells across the nation.
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A pump jack and pipes are seen on an oil field near Bakersfield,
California, January 2015. REUTERS/Lucy Nicholson
EP Energy, one of Biota's first customers, insisted on a blind test
last year to gauge the technique's effectiveness, asking Biota to
determine the origin of an oil sample from among dozens of wells in
a 1,000-square foot zone.
Biota was able to find the wells from which the oil was taken and to
recommend improvements for wells drilled in the same region, said
Peter Lascelles, an EP Energy geologist.
"If you've been in the oilfield long enough, you've seen a lot of
snake oil," said Lascelles, using slang for products or services
that do not perform as advertised.
Lascelles said DNA testing helps EP Energy understand well
performance better than existing oil field surveys such as seismic
and chemical analysis. The testing gives insight into what happens
underground when rock is fractured with high pressure mixtures of
sand and water to release trapped oil.
Biota's process is just the latest technology pioneered to coax more
oil from rock. Other techniques include microseismic studies, which
examine how liquid moves in a reservoir, and tracers, which use some
DNA elements to study fluid movement.
Venture capitalist George Coyle said his fund Energy Innovation
Capital had invested in Biota because it expected the technique to
yield big improvements in drilling efficiency. He declined to say
how much the fund had invested.
"The correlations they're going to be able to find to improve a
well, we think, are going to be big," he said.
-For graphic on 'DNA sequencing in the oil industry' click:
https://tinyurl.com/ma8ypwd
(Reporting by Ernest Scheyder; Editing by Gary McWilliams, Simon
Webb and David Gregorio)
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