December 17, 2015
Author: Roman Boros, Senior Analyst
Publisher: Oil & Gas Financial Journal, December Edition
Direct extraction of oil and gas from the shale source rock is currently only actively developed in the Americas (United States, Canada and Argentina), however, other nations have the geological capabilities to develop shale resources too. Rystad Energy has studied the geology and economic conditions for more than 200 known shale formations outside North America.
Rystad Energy has developed a GIS method to estimate the prospectivity throughout the shale play. This automated method does not attempt to replace expert geologic exploration research, but it provides simplified GIS valuation model, which enables relative comparison of shale play acreage. It observes variation of geological parameters across the plays and determines zones, which are more prospective than others, using the proved analogies from North American shale plays. The GIS valuation model looks for optimal combinations of key geological parameters, such as play depth, thermal maturity and thickness, in order to identify play fairways.
The method is further briefly described on Pimienta shale formation in the Tampico-Misantla Basin in Mexico (Figure 1).
The depth of the play continuously increases from 860m below the surface in the center to 4,400m in the southeast part of the play. Based on analogies in North American shale plays, the ideal depth is in the range of 1,500-2,100m (~5,000-7,000 ft). An ideal depth range receives the highest score in the model. The score of shallower areas is lower because of possible low deliverability of the formation (lower formation pressure), while deeper areas receive lower scores because the wells would become more expensive to drill.
Another key geologic parameter is the thermal maturity of a play, indicated by vitrinite reflectance (%Ro). Scoring in the model is based on price differentiation of different hydrocarbon types. The wet gas/condensate (1.1-1.3 %Ro) window receives the highest score, followed by the oil (0.55-1.1 %Ro) and dry gas (>1.3 %Ro) windows. Vitrinite reflectance of the Pimienta shale formation increases in the northeast to southwest direction with the gas window in the southwest.
The third input in the model is the play thickness, where scoring increases continuously with higher isopachs. Pimienta shale formation is thickest in the central and southwest part with a maximum of 370m (~1,200 ft).
Total organic carbon (TOC) can be one of the multiple optional input parameters in the model. Similar to the play thickness, scoring increases continuously with higher TOC values.
The weighted overlay of these four scored inputs results in the final prospectivity map (see the map inset 2 on the Global Prospective Shale Plays map). The combination of the best scores of play depth, thermal maturity, thickness and TOC determines the fairway of the Pimienta shale formation, with highest prospectivity in the central and southwest part of the play together with small areas in the northwest extension.
The described valuation method helps to uncover areas with higher or lower geologic potential for shale development. However, there are plenty of other geologic and non-geologic factors, which can determine the commerciality of unconventional production from shale plays. One such factor is topography, where hardly accessible mountain areas, or dense urban areas, may limit development activities significantly. Figure 2 shows an example of Longmaxi shale in Sichuan Basin in China. Northeastern and western areas with relatively high prospectivity are located in mountainous terrain, which prioritizes the prospectivity trends just east of Chongqing city.
Roman Boros, Senior Analyst
Phone: +47 24 00 42 00
Mobile: +47 91 00 85 84
Julia Weiss, VP Marketing
Phone: +47 24 00 42 90
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About Rystad Energy
Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.
Rystad Energy’s headquarters are located in Oslo, Norway, with additional research teams in India. Further presence has been established in Norway (Stavanger), the UK (London), USA (New York & Houston), Russia (Moscow), Brazil (Rio de Janeiro), Africa as well as South East Asia.