Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Bazhenov oil field. Another name to watch.

Bazhenov.

That’s the name of another oil play to put on your radar screen. I’ve seen several articles this week on it, so it’s probably time to mention it.

I jump into this issue by expanding on a discussion by Christopher Helman, from Forbes Magazine. His article is Meet the Oil Shale Eighty Times Bigger Than The Bakken

The field is in Siberia.

The speculation is this field could have far more oil than Bakken. Reason is the underlying strata of oil covers an area about 2.3 million square kilometers. That’s about 890,000 square miles. A layer of oil 100 feet thick across that area would be a huge play.

Speculation in play suggests Bazhenov could have 80 times the oil in Bakken.

Intuitively it seems to me that is an exaggeration. Let’s do a little mind math exercise – Eighty times 500,000 bopd would be 40,000,000 bopd. 

Not likely. However, even 2m or 4m would be fantastic.

The initial test wells are very promising. From Mr. Helman:

The couple of test wells [in the Bazhenov play] that he cites flowed at an average of 400 barrels per day. That’s in line with the Bakken average.

That would be the initial flow shortly after starting production. That is very good.

Wild guesses are this play could produce 1 million barrels per day:

If Russia can get its act together to deploy 300 drilling rigs to the play, Clint figures Bazhenov could be producing 1 million bpd by 2020.

Considering the astoundingly low level of respect the Russian legal system has for property rights, that is an incredible huge ‘if’.  At the same time, an estimate of 1M bopd seems quite low from that large of a field.

I’m becoming skeptical of estimates of production from big plays. I’ve not seen an estimate dated in the last five years for Bakken or Eagle Ford production that wasn’t severely low. More on that later.

Here is Mr. Helman’s comment on Bakken:

From just 60,000 barrels per day five years ago, the Bakken is now giving up 500,000 bpd, with 210,000 bpd of that coming on in just the past year. Given the availability of enough rigs to drill it and crews to frack it, there’s no reason why the Bakken couldn’t be producing more than 1 million bpd by the end of the decade, a level that could be maintained for halfway through the century.

A million bopd by the end of the decade?  December 31, 2019 is 6½ years away. It won’t take that long.

The astounding thing is this is not a new field. Again from Mr. Helman:

This Siberian bonanza might be news to most of us, but it’s old news to Big Oil. The conventional oil fields of Siberia have been producing millions of barrels a day for decades — oil that originated in the Bazhenov “source rock” then slowly oozed up over the millenia. From the looks of it, geologists have been looking at the Bazhenov for more than 20 years.

It’s only in the last five years that the technology and expertise has been developed that will enable drillers to harvest it. Lukoil‘s president Vagit Alekperov said a year ago that his company was also experimenting with the shale.

That field has been in production for years. The new factor is applying directionally controlled horizontal drilling along with fracking. When you add in those two new technologies, there’s a million new barrels a day. Or more.

Can we toss that peak oil idea in the trashcan of history?

Mr. Helman concludes with saying that whichever of two estimates of the field size develop

… it looks like they’ll still be working the Bazhenov long after Vladimir Putin has finally retired and the Peak Oil crowd realizes there’s more oil out there than we’ve ever imagined.

A million or more bopd that wasn’t possible before 5 years ago from a known field. Cool.

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