In slump, oil firms turn to labs, data cen­ters for help

The Pak Banker - - MARKETS/SPORTS -

In a base­ment lab of a North Dakota re­search cen­ter, Beth Kurz and an as­sis­tant are peer­ing through a scan­ning elec­tron mi­cro­scope, study­ing sam­ples from the state's vast Bakken shale oil for­ma­tion. Kurz, a hy­dro­ge­ol­o­gist, is part of a team, which looks at us­ing car­bon diox­ide to coax more oil out of wells that have al­ready been hy­drauli­cally frac­tured, or fracked, in the process of ex­tract­ing oil from shale rocks.

"No one is sure just yet how this process can work in the Bakken," said Kurz. "We're hop­ing to crack that rid­dle."

While en­ergy firms around the world slash spend­ing and cut jobs in re­sponse to crash­ing oil prices, re­search in­sti­tu­tions and com­pa­nies across North Amer­ica are not let­ting up in their ef­forts to make pro­duc­tion more ef­fi­cient.

In fact, de­mand for money-sav­ing so­lu­tions is greater than ever and re­search cen­ters, helped by multi-year bud­gets and grants, are dou­bling down - hir­ing more staff, build­ing new lab­o­ra­to­ries and launch­ing new stud­ies. The Univer­sity of North Dakota's En­ergy and En­vi­ron­men­tal Re­search Cen­ter (EERC) where Kurz works has hired 20 more re­searchers and lab as­sis­tants over the past year, a 10 per­cent in­crease.

"At $100 per bar­rel oil, you just pro­duce as much as you can, with cost as a sec­ondary con­cern," said Tom Erick­son, the Cen­ter's head. "But at $30 oil, you need to in­no­vate, or else you're just los­ing money." The cen­ter, which has an an­nual bud­get of more than $30 mil­lion funded by the fed­eral govern­ment and in­dus­try part­ners, in­clud­ing Marathon Oil Corp (MRO.N) and Con­ti­nen­tal Re­sources (CLR.N), also works on al­ter­na­tive fuel and coal tech­nolo­gies, but the CO2 pro­ject is among the big­gest.

While car­bon diox­ide from coal-fired power plants has been used for years to ex­tract oil from older, con­ven­tional wells, it has yet to be ap­plied com­mer­cially in shale drilling. Un­like spongy con­ven­tional oil re­serves, shale is a rock and the sci­en­tists are now try­ing to find the best way for CO2 to flow through it and help bring oil to the sur­face.

Else­where, ef­forts range from ag­gre­gat­ing reams of data from field sen­sors to us­ing med­i­cal scan­ning equip­ment or re­duc­ing the amount of wa­ter used for frack­ing.

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