American Oil and Gas Reporter - January 2015 - 115

TECH TRENDS
confirm the value proposition behind JWI as a process. While developments in CSEM have been successful in marine environments
by virtue of the background stability offered by the water column,
it remains to be seen whether the same quality of results can be
achieved in onshore environments, where the E&M ambient noise
is much higher.
Passive Monitoring
Another technology that will be critical to the RTO concept in both
conventional and unconventional reservoirs is passive monitoring of
producing fields with permanent sensor arrays (surface and buried),
along with smart well sensor arrays as discussed previously.
Long-term monitoring of fields using acoustic and electrical
methods is one of the highest potential areas for major improvements in operational efficiency because of its ability to detect reservoir and overburden changes in real time, and the resulting impact on decision making as well as the potential to reduce the manpower required to manage multiple complex assets.
The industry has operated "blindly" for most of its history, assuming that the reservoir and overburden were essentially static and
unchanging over the life of a field. We now know that this view was
wrong, and that the reservoir and the overburden undergo continuous changes in stress, fluid pressure, temperature, and state of compaction during production that can lead to well failures and negative changes to producing wells that increase the cost of production.
In addition to the changes that occur during production of reservoirs, the industry now is involved in carbon dioxide storage and
injection in a large number of fields, both for tertiary recovery
and for sequestration purposes. Changes in the regulatory environment surrounding these activities ultimately will require constant passive monitoring of CO2 injection projects because of the
concerns (warranted or not) about seal breaches and leaking CO2
into the atmosphere or aquifer systems.
Similar rules ultimately may be required for underground gas and

oil storage facilities as well. It will be essential that the industry get
ahead of this evolution in the regulatory framework, or we will be
told by outsiders to do this on their terms at some future date.
People Piece
The final piece of this complex equation is people. Operators
have a tendency in low price environments to shed people as a
cost-cutting measure, but the truth is that highly technically skilled
people are the only real assets an oil company has, after its reserves. Integrating new technologies to reduce finding and development costs while increasing production can be achieved only
by putting together the right expertise in integrated teams that can
implement these production optimization processes.
Success will require not only that the right people be assembled, but that they are provided with the right workflows and communication tools to enable the integration process. This also will
require training and mentoring to help staff learn and master the
technologies and processes they must manage.
In summary, the near-term price environment requires that operators consider a much tighter integration of specific technologies with production optimization processes. This integration can
be achieved by identifying technology and service providers that
are best-in-class in their specific fields, and then designing longterm partnerships with financial commitments designed to improve
integration and intimacy of the technology and workflows, enhance efficiency, and lower the total cost of implementation.
Achieving this will allow operators to continue to grow production in order to maintain cash flow while enabling significant
cost reductions in production operations to offset the lower price
environment. Based on data from both conventional and unconventional plays, the potential exists to improve F&D costs per
flowing barrel by 25-30 percent in many areas, which should be
sufficient to offset commodity price declines and still increase
production.
Ì

ALAN R.
HUFFMAN

Alan R. Huffman is a consulting partner at SIGMA3 Integrated Reservoir Solutions, where
he is a recognized expert in the fields of geopressure prediction, shallow hazards prediction, direct detection of hydrocarbons and exploration risking, with more than 25 years of experience
in international exploration and production. He served as SIGMA3's chief technology officer from
its inception to 2014, and prior to that he was chairman and chief executive officer of FusionGeo Inc., where he was the primary architect of Fusion's growth from a small consulting practice to a global business enterprise with more than 300 clients and offices in multiple countries.
From 1997 to 2002, Huffman managed the Seismic Imaging Technology Center with Conoco. He
received a bachelor's in geology from Franklin & Marshall College in 1983, and a Ph.D. in geophysics from Texas A&M University in 1990.
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American Oil and Gas Reporter - January 2015

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