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Chevron to License Chemical Technology to Boost Shale Oil Production
Summary
Chevron has announced it will allow rival oil producers to use its proprietary chemical technology designed to increase output from shale wells. The move aims to address declining well productivity across the U.S. shale industry.
HOUSTON – Chevron will license its proprietary chemical technology to rival oil producers, a move intended to boost U.S. oil output, the company announced Wednesday. The technology will be made available through a licensing agreement with chemicals manufacturer ZL Chemicals, which will manage sales to other energy companies.
The decision comes as the U.S. shale industry grapples with declining productivity from existing wells. According to Ryder Booth, Chevron’s Chief Technology and Engineering Officer, the initiative is a response to global energy constraints and a "call on oil and gas companies to get more energy to market."
Chevron’s technology utilizes chemical surfactants, which function similarly to soap by cleaning out particles from cracks in shale rock and helping to separate oil from the formation. The company reports that these chemicals have improved production from new wells by as much as 20% in the first year and have reduced the rate of production decline in existing wells by 5% to 8%.
AdIndustry experts note that oil recovery rates in shale formations are often as low as 10%, leaving the vast majority of resources in the ground. As the most productive drilling areas become depleted, technological advancements are seen as critical for sustaining output. By licensing its technology, Chevron could also benefit from increased production in wells where it holds a royalty interest but is not the primary operator.
The company also stated it plans to begin testing a new version of the chemical technology in the third quarter.