Emerging and existing technologies could nearly double the world’s proved oil and gas reserves, surpassing the projected energy demand through 2050 and beyond, according to a technology outlook released by BP.
“Technologies such as enhanced oil recovery, advanced seismic imaging and digitization will have a huge impact on which of the available fossil resources we develop, how, where and when,” BP CEO Bob Dudley said in the outlook. “Innovation will not only help to sustain the supply of hydrocarbons, it will enable renewable resources—most notably solar and wind—to be more competitive, changing the merit order of investment and resource development.”
The outlook was released Nov. 2 amid a continued downturn that has driven down commodity prices and profit, a result of a supply-demand imbalance. In turn, operators have increasingly turned to technology to improve efficiency and, ultimately, lower operating costs while growing production. By applying certain technologies, BP believes proved oil and gas reserves could increase from 2.9 trillion barrels of oil equivalent (boe) to 4.8 trillion barrels.
But technological advances—including advanced EOR technology as well as improved imaging, well construction and well intervention technology—could also boost recovery factors at existing fields, unlocking another 2 trillion boe of oil, according to the outlook.
BP pointed out that proved oil reserves are twice the level they were in 1980 thanks to better seismic imaging to pinpoint reservoirs, especially in deep water and below thick salt formations, among other technologies.
“Resources are now plentiful and the concern about oil and gas running out has all but disappeared,” BP said in the outlook, noting that half of the world’s proved oil reserves come from four countries.
Technology coupled with improved techniques, such as hydraulic fracturing and horizontal drilling, have already led to improved production in unconventional plays. Plus, companies have utilized pad drilling, added frack stages, extended laterals and used enhanced completions, all of which have contributed to production growth.
However, “digital technologies—such as advanced sensors, data analytics, robotics and automation, enabled by supercomputing—have the most widespread potential to drive change and make energy supply and consumption safer, more reliable, more efficient and more cost-effective” said David Eyton, BP Group head of technology. “These technologies are already transforming the oil and gas industry, and the longer term possibilities are frankly difficult to imagine.”
Remote sensing via satellites and unmanned aerial vehicles, better known as drones, have entered the oil and gas scene taking on growing roles in surface mapping, contaminant characterization, inspection and spill detection, BP said. So have new materials targeting corrosion, which can impact reliability and improve uptime.
Potential also lies within quantum technology and its ability to process large amount of data faster.
The positives go beyond potential for production and efficiency gains.
Technology advances could lower extraction costs by about 25% by 2050, BP said. But in order for savings to be realized companies must be in it for the long haul.
“Producers must commit to unwavering innovation through the oil and gas price cycles if they are to meet demand safely and at competitive cost through to 2050 and beyond,” BP said, noting price drops naturally brings costs reductions to the forefront. “Technology offers help on two fronts. The first is in raising short-term production, the denominator in the cost-per-barrel equation. The other involves attacking capital costs and operating expenses head on. Both place an emphasis on efficiency.”
Despite the positives brought by existing and emerging technologies, obstacles remain. Among these are water scarcity in some areas and greenhouse gas emissions, which BP predicts will rise by 25% within the next two decades.
“So what technologies will be the most important as this journey unfolds? In the short term, we can expect a continued emphasis on technologies, such as seismic imaging and EOR, to find and produce fossil fuels as cost effectively as possible while also continuing to enhance and reduce costs of lower-carbon energy,” BP said. “In the medium to longer term we expect to see technology enable lower-carbon energy to mature and become deployed at increasing scale while the remaining hydrocarbons are used even more efficiently.”
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