A couple of decades ago upstream technical disciplines worked in silos. Many things were overlooked because people were narrowly focused. Sedimentologists looked at depositional characteristics and ignored fractures. Petroleum engineers might not look at the core at all, just the core analysis reports. Core analysts were trying to get plugs to test and ignored drilling mud invasion. Reports were passed around, but people rarely collaborated or integrated their work. Applying even a little earth science to petroleum engineering could produce huge benefits.
Although I was trained in experimental rock mechanics and earth sciences, I was impersonating a petroleum engineer. Some of my greatest successes came by simply looking at the core taken from a field. In one case, my interdisciplinary look at the core ultimately led to increasing the field's gas reserves by 2.2 Tcf.
Now no one would dream of conducting a petroleum engineering study without the benefit of geology and geophysics. As an industry, we have reaped huge benefits from linking the upstream technologies. We like to congratulate ourselves on being interdisciplinary.
When I was asked to lead the development of a new long-range plan for the Society of Petroleum Engineers (SPE), I found that our efforts to foster better relationships between professional societies were focused on the earth sciences and on local upstream societies. While we must continue integration of petroleum engineering and earth sciences, it is time to cross new boundaries and forge new relationships.
Let's look at where we are going as an industry. Whenever anyone worries that the world is running out of hydrocarbons, we point to resources in ultradeep water or stranded natural gas or unconventional resources such as heavy oil, bitumen and oil shale. Currently all of these resources are marginally commercial or non-commercial. Bringing them to market will involve transferring to the field various types of processing that have been regarded as the turf of the "downstream" refinery folks.
Interest is increasing in offshore processing on fixed platforms, floating production systems and on the sea floor. Improving our ability to separate oil and water is of ever-greater importance. New separation technology will enhance our ability to comply with ever-stricter standards on oil discharges. Subsea processing with seabed injection of produced water has significant potential to increase recovery from mature fields. Adapting process technology to these new environments and designing systems that can handle the motion of floating systems poses big challenges.
Gas-to-liquids (GTL) is showing promise as a way to commercialize natural gas that is too remote to bring to market by pipeline. Multiple process technologies that are used in refineries are incorporated in GTL plants.
Even after we get heavy oil to the surface, we are faced with more challenges than for light oil and have less margin to play with because heavy crudes sell at a significant discount to light oil. To transport heavy oil or bitumen by pipeline, its viscosity must be decreased by adding a diluent or by field upgrading. Diluent can be expensive and in short supply. In field upgrading, the heavy oil or bitumen is processed in the field to a product similar to conventional crudes. The resulting product is not only easier to transport, but also sells for a better price.
Although we are making good progress in bringing process technology to the field, better integration will create new synergies. When we break down communications barriers so that we integrate technology across more of the value chain, we usually find opportunities that we never dreamed about before. As 2006 president of the Society of Petroleum Engineers, I plan to lead the way in reaching out to downstream professional societies. Twenty years from now, we may look back and marvel at the large divide that once existed between upstream and downstream.