Rising Tide of Produced Water Could Pinch Permian Growth

Getty Images

As oil production rises in the Permian, the even larger volumes of water from those wells is becoming a pressing problem for many operators, particularly those drilling in the wetter western half of the basin.

Over time the cost of producing a barrel of oil could include a $3–6/bbl water disposal cost, according to a new report by Wood Mackenzie. If those numbers are realized—and there is considerable uncertainly how this will play out—it would reduce the consultancy’s 2025 production growth projection for the region by 400,000 B/D.

The report is one of the first attempts at calculating an industrywide number on a problem that is increasingly showing up in quarterly reports to investors.

Areas with the highest water saturation in the Permian will produce the most water as well, with most flowing from the Delaware Basin. Source: Wood Mackenzie.

“People are trying to understand what the risks and opportunities look like for the long term,” said Ryan Duman, principal analyst with Wood Mackenzie’s Lower 48 upstream team. In the past “we did not see operators talking about water to this degree in their reports.”

Operators are shifting water transport from trucks to pipelines, reducing their costs per barrel from around $2.50/bbl of water to as low as $0.30/bbl by making a significant upfront investment, and some are reusing more produced water for fracturing.

Hardest hit would be the Delaware basin, where wells commonly produce significantly more water than those in the Midland basin to the east.

Compared with other big shale basins, the Permian is wetter. Intense development there is straining the limits of water-injection wells and could prove to be another limiter for drilling in a play already producing more oil than the pipeline system can handle.

“Water risks to date have largely been described as a cost issue, but as projects continue to build scale, the risks become more serious,” said Duman. “They could impact the ability to actually carry out operations. Investors and project partners should challenge operators on how water is being managed.”

Cause-Effect?

The severity of the potential water disposal problems varies widely across the basin. But as wells age, the percentage of water produced inevitably rises, forcing companies to do more water planning, switch to pipelines and water reuse, cooperate with other companies on water management programs, or pay service companies that are offering a growing range of options for managing the problem.

“I have every confidence that industry will adapt to the water situation and find solutions that will work,” said Bridget Scanlon, senior research scientist for the Bureau of Economic Geology at the University Texas at Austin, who has written about how produced water disposal in the Permian is pushing the limits of the shallower formations long used for injection.

Wells producing far more water than oil have been the norm for decades in the Permian, where old conventional fields with water cuts exceeding 90% are common. That water has not been a big concern because it could be cheaply reinjected into those reservoirs to produce more oil.

But waterflooding has not been an option in the extremely tight rock of shale plays, such as the Wolfcamp. Some operators are experimenting to see if it is possible to use water injection in ultra-tight rock to slow production decline rates. Others are testing whether chemical or gas injections can free more oil, slowing the rise in the water cut.

Rising water disposal costs could drive other ways of dealing with the water. Water reuse is growing. The report pointed out that half the water used by Callon Petroleum for fracturing is reused, though that is high compared to others. The money saved by reusing produced water—Cimarex reported saving $1.10/ bbl by doing so—will ensure this grows but the volume or water produced is expected to exceed the need for fracturing, it said.

Maps and charts in the report make a case for avoiding generalizations about Permian water disposal.

While the Delaware basin generally produces more water, there is a wide gap between the rise in the water produced per barrel of oil in the wettest acreage and dryer areas.

[Source caption: Water-to-oil ratio assumptions used to generate water curves for Permian sub-plays.]
There is a wide range between wells in areas with the most water in the formation and the least, and the Midland basin has less than the Delaware.

The map at the top of the story shows development to date has largely been in areas with moderate to low water saturations. Over time the cost of dealing with the water could affect the value and level of development in those sections where the underground water levels make them more likely to move to high water cuts faster. “Now people are realizing it is more important than it was before to know where are the wettest spots in the play,” Duman said.

It is important to realize that while the water cut rises over time—in extreme cases it can exceed 90% after 5 years—the volume of water sinks over time. The higher water-cut percentage is a function of the oil flow sinking more than the water.

Over 4 years, the ratio of oil to water declined as the flow of both went down in wells in the Wolfcamp play. Source: Wood Mackenzie.

Fluid Facts

Putting out costs estimates will lead to counter arguments questioning the quality of the underlying data, which has its flaws. Duman said the produced water production reports available from the Texas Railroad Commission are limited and “opaque to say the least.” New Mexico offers much better data, but water is not reported at nearly the same level of detail as oil and gas.

Improved reporting is needed to guide the industry and regulators as they look for solutions and figure out how to manage scarce resources, particularly the limited capacity of subsurface formations used for water injection.

The rising amount of water injected has led to over injection in parts of the San Andreas formation in the Midland basin, has led to increasing numbers of disposal wells into the deeper Ellenburger formation.

“Disposal is becoming a problem,” Scanlon said. Injection levels are so high disposal wells are becoming over pressured in the Midland Basin and more wells are being drilled in the deeper Ellenburger formation there.

High volumes of injected water into a similar deep formation in Oklahoma are a prime suspect in the surge in earthquakes there, which led to water injection limits over wide areas.

New Mexico is restricting the number of saltwater disposal wells, which could lead to more wells built in Texas to handle water produced in the Delaware, Scanlon said. The report pointed out the time required to obtain a permit to build a disposal well has increased significantly.

The ability of a disposal well is limited by both the total volume pumped, and the injection rate. High rate injection can trigger a spike in the pumping pressure needed to get it into the formation.

The trend toward developing larger clusters of horizontal wells with laterals stretching out two miles causes local surges in produce water that can overwhelm nearby disposal facilities.

Rising Tide of Produced Water Could Pinch Permian Growth

Stephen Rassenfoss, JPT Emerging Technology Senior Editor

12 June 2018

https://www.spe.org

https://www.ogdaily.com/

Latest E&P Jobs

Dallas, TX, USA Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). Job Description Job Profile: The
Edenbridge TN8, UK Full-time Company Description CGG (http://www.cgg.com/) is a fully integrated Geoscience company providing leading geological, geophysical and reservoir capabilities to its broad base of customers primarily from the global oil and gas industry. Through its three complementary business divisions of Equipment, Acquisition and Geology, Geophysics & Reservoir (GGR), CGG brings value across all aspects of natural resource exploration
Beijing, Beijing Full-time Company Description CGG is a recognized leader in subsurface imaging and our international teams are dedicated to solving our clients’ complex challenges. Come and join us to help build the most stunning images of the Earth’s subsurface, using our massive computers capability. Thanks to our talented people and in-house technology, CGG is unique in the geoscience sector.
Llandudno LL30, UK Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). CGG’s consulting services offer comprehensive
Edenbridge TN8, UK Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). Job Description Are you interested
The Hague, Netherlands Full-time Company Description CGG (http://www.cgg.com/) is a fully integrated Geoscience company providing leading geological, geophysical and reservoir capabilities to its broad base of customers primarily from the global oil and gas industry. Through its complementary business lines of Equipment, Acquisition and Geology, Geophysics & Reservoir (GGR), CGG brings value across all aspects of natural resource exploration and
Llandudno LL30, UK Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). Job Description Working with a
Llandudno LL30, UK Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). CGG’s consulting services offer comprehensive
Conwy, UK Full-time Company Description CGG (http://www.cgg.com/) is a fully integrated Geoscience company providing leading geological, geophysical and reservoir capabilities to its broad base of customers primarily from the global oil and gas industry. Through its three complementary business divisions of Equipment, Acquisition and Geology, Geophysics & Reservoir (GGR), CGG brings value across all aspects of natural resource exploration and
Llandudno LL30, UK Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). CGG’s consulting services offer comprehensive
Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). CGG’s consulting services offer comprehensive geoscience knowledge and provide
Company Description As the world’s leading international pure-play geophysical company, we offer unique seismic solutions that help the oil and gas industry meet energy demands responsibly. To build on the success of our business we are continuing to strengthen, mobilize, and energize our most important asset: our people. We actively encourage technical excellence, problem-solving, innovation and teamwork. Job Description The
Crawley, UK Full-time Company Description CGG (http://www.cgg.com/) is a fully integrated Geoscience company providing leading geological, geophysical and reservoir capabilities to its broad base of customers primarily from the global oil and gas industry. Through its three complementary business divisions of Equipment, Acquisition and Geology, Geophysics & Reservoir (GGR), CGG brings value across all aspects of natural resource exploration and
Llandudno LL30, UK Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). CGG’s consulting services offer comprehensive
Llandudno LL30, UK Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir). CGG’s consulting services offer comprehensive
Rio de Janeiro, State of Rio de Janeiro, Brazil Full-time Company Description In all environments, we acquire process and interpret surveys that provide our clients with a comprehensive understanding of their subsurface targets and geological settings. We deliver our unique expertise in geoscience technology and project management through our three complementary business activities: Equipment, Acquisition and GGR (Geology, Geophysics &
Req ID 92423BR Job category Trading Analytics Countries (State/Region) South East Location United Kingdom – South East – London Role synopsis The Trading Analytics team sits within the front office and is responsible for providing a broad range of analytical insight that helps drive our energy commodities trading activity. Within Trading Analytics, the Structuring team is responsible for providing structuring
Company: Lloyds Register Job ID:17742 Location:Birmingham : 1 Trinity Park : Bi (LR_L000100) Position Category:Project Management Department:GB110156 : Birmingham Energy NUCLEAR (GB110156) Position Type:Employee Regular Education Required:See Job Description Experience Required:See Job Description Relocation Provided: Role Purpose To provide project management leadership through the use of applicable and relevant procedures to maintain client relationships and be accountable for the safe
Aug 15, 2018 Nearest Major Market: Oklahoma City Nearest Secondary Market: Oklahoma Job Segment: Engineer, Oil Field, Engineering, Research, Energy Our core values — integrity and trust, respect, transparency and open communication, commercial focus and change leadership — are the lens through which we evaluate every business decision. As a dynamic, growing company that offers extremely competitive compensation and benefits,
Job ID: 3836 Region: Europe Location: Consett, UK Closing date: Monday August 27, 2018 Employment status: Experienced Professional Employment type: Permanent Job Description Senior / Principal Geotechnical Engineer Consett   Fugro is the world’s leading independent provider of geo-intelligence and asset integrity solutions. We are looking for a confident, talented and innovative individual to join our Site Characterisation Team based
Job ID: 3841 Region: Europe Location: Wallingford, UK Closing date: Monday August 27, 2018 Employment status: Experienced Professional Employment type: Permanent Job Description Senior Geotechnical Consultant Wallingford   Fugro is the world leading independent provider of geo-intelligence and asset integrity solutions. We are looking for confident, talented and innovative individuals to join our UK land and near-shore geotechnical consultancy team
Job ID: 3886 Region: Middle East and India Location: Doha, QA Closing date: Wednesday October 31, 2018 Employment status: Experienced Professional Employment type: Permanent Job Description JOB TITLE Engineer II (Geologist / Engineering Geologist / Civil Engineer)   REPORTS TO Engineering Manager   COORDINATES WITH Engineers I to V   DIRECT REPORTS N/A   JOB FUNCTION Perform engineering work around
Job ID: 3906 Region: Americas Location: Houston, Texas, US Closing date: Friday October 12, 2018 Employment status: Experienced Professional Employment type: Temporary Roles And Responsibilities Works independently to validate, interpret, and integrate various geophysical, geologic, geotechnical, and metocean data to form a comprehensive assessment of marine site conditions with regard to 3D drilling hazards and high-resolution field development planning. Oversees
date: Aug 14, 2018 location: St. John’s, NewfoundlandLabrador, CA Chevron is one of the world’s leading energy companies, with approximately 60,000 employees working in countries around the world. We explore, produce and transport crude oil and natural gas; refine, market and distribute fuels and other energy products; manufacture and sell petrochemical products; generate power; and develop future energy resources, including
Jacobs CH2M Hello, future! Here we come. CH2M is now Jacobs. Today is the day when everything about our industry changes. Today, our two great companies join together to deliver more: The promise of a more connected, sustainable world. As our two great companies unite, you may see legacy branding, language or processes and you may be hired into either
GE Oil & Gas Experienced Posted 8/14/2018 7:54:29 AM 3149953 Job Function: Engineering/Technology Business Segment: Oil & Gas Measurement & Controls Role Summary:In this role as a mechanical engineer, you will be part of a team working for RAD NPI programs as well as product quality improvement and sustaining activities. This team is responsible for the development and sustaining of
GE Oil & Gas Experienced Posted 8/14/2018 7:54:32 AM 3156830 Job Function: Digital Technology Business Segment: Oil & Gas Turbomachinery Process Solutions Essential Responsibilities:Responsible for programming a component, feature, and/or feature set for Windows based software for industrial applications and smart instruments.Apply principles of SDLC and methodologies like Lean, Agile, Software & Product Security, and testing techniques. – Full lifecycle
Date: Aug 13, 2018 Location: Cotulla, TX, US, 78014-2005 Our core values — integrity and trust, respect, transparency and open communication, commercial focus and change leadership — are the lens through which we evaluate every business decision. As a dynamic, growing company that offers extremely competitive compensation and benefits, our employees are our most valued assets and the foundation of
Date: Aug 13, 2018 Location: Makati, NCR (Manila), PH Chevron is one of the world’s leading energy companies, with approximately 60,000 employees working in countries around the world. We explore, produce and transport crude oil and natural gas; refine, market and distribute fuels and other energy products; manufacture and sell petrochemical products; generate power; and develop future energy resources, including
Date:Aug- 13- 2018 Role synopsis This role involves working closely with various stakeholders to develop a leading-edge understanding of the fundamentals of China’s oil market. The successful candidate will be an independent, driven person with excellent interpersonal and numerical skills, who are able to navigate the fast-changing rapids of China’s oil market and bring that understanding to our global trading
Date: Aug 13, 2018 Location: Makati, NCR (Manila), PH Chevron is one of the world’s leading energy companies, with approximately 60,000 employees working in countries around the world. We explore, produce and transport crude oil and natural gas; refine, market and distribute fuels and other energy products; manufacture and sell petrochemical products; generate power; and develop future energy resources, including
Aug 13, 2018 Nearest Major Market: Oklahoma City Nearest Secondary Market: Oklahoma Job Segment: Engineer, Construction, Pipeline, Project Manager, Engineering, Energy, Technology, Entry Level Our core values — integrity and trust, respect, transparency and open communication, commercial focus and change leadership — are the lens through which we evaluate every business decision. As a dynamic, growing company that offers extremely
Date: Aug 13, 2018 Location: Oklahoma City, OK, US, 73118 Our core values — integrity and trust, respect, transparency and open communication, commercial focus and change leadership — are the lens through which we evaluate every business decision. As a dynamic, growing company that offers extremely competitive compensation and benefits, our employees are our most valued assets and the foundation
Date:12 -08-2018 Role Summary:The Sr. Sourcing Manager – Commodity Management will be responsible for developing long term Sourcing strategy for key commodities like Engineered Systems, Fabrication and Machined Parts & Assemblies across all 4 Product companies within BHGE. He/She will work extensively with global commodity leaders and define the right supplier footprint from India that supports both local and global
Date: Aug 10, 2018 Location: Oklahoma City, OK, US, 73118 Our core values — integrity and trust, respect, transparency and open communication, commercial focus and change leadership — are the lens through which we evaluate every business decision. As a dynamic, growing company that offers extremely competitive compensation and benefits, our employees are our most valued assets and the foundation
Date: Aug 12, 2018 location: Perth, Western Australia, AU supply chain management (SCM) – chevron aboriginal cadetship program Who We Are Chevron is one of the world’s leading integrated energy companies and through its Australian subsidiaries, has been present in Australia for more than 60 years. Offering some of the most dynamic career opportunities in the industry, Chevron Australia –
Date: Aug 11, 2018 Location: Villahermosa, TAB, MX, 86037 A453-ESG-Coord, HSE, Assoc Under strict supervision from Operations Leadership, the Coordinator is responsible for implementation of health, safety and environmental policies, procedures and guidelines as instructed. Duties are likely to be within a defined project, work-site or geographic location. Assists in various activities, including but not limited to hazard identification and
Date: Aug 11, 2018 Location: Roma, QLD, AU, 4455  We are looking for the right people — people who want to innovate, achieve, grow and lead. We attract and retain the best talent by investing in our employees and empowering them to develop themselves and their careers. Experience the challenges, rewards and opportunity of working for one of the world’s
Date: Aug 11, 2018 location: Perth, Western Australia, AU Who We Are Chevron is one of the world’s leading integrated energy companies and is consistently voted one of the top graduate employers in Australia’s Top 75 Graduate Employers survey. Offering some of the most dynamic career opportunities in the industry, Chevron Australia – headquartered in Perth – leads the Gorgon
Date: Aug 11, 2018 location: Perth, Western Australia, AU asset development – chevron aboriginal cadetship program  Who We Are Chevron is one of the world’s leading integrated energy companies and through its Australian subsidiaries, has been present in Australia for more than 60 years. Offering some of the most dynamic career opportunities in the industry, Chevron Australia – headquartered in
Role Summary:The Engineer / Technologist provides direction and assistance to teams and work within defined parameters to make decisions, apply concepts to issues of moderate complexity, and resolve issues through immediate action or short-term planning.Essential Responsibilities:– Execute, with guidance from senior engineering resources, the analysis, design, test, or integration required to define and support assigned components, assemblies orsystems that meet
Essential Responsibilities:– Interpret survey reports and provide technical dispositions and work scopes to satisfy specifications.-Interpret Customer specifications and identify equipment required to satisfy specifications.- Identify shortcoming in, or lack of, existing products and produce cost effective design solutions to satisfy specifications.- Prepare and approve factory acceptance test procedures.- Meet engineering work schedules.- Liaise with Sales and Manufacturing Departments as well
Essential Responsibilities: Be responsible, drive and lead for all UTSP metrics, as OTD, Sales FC, Inventory, Past Due orders. Analyze root causes for improvement potential and lead improvement Orders: Coordinate orders with other Functions like Customer Care to ensure flawless execution Sales: Forecast weekly Sales output, resolve Past Due orders Lead Variable Cost Initiative (VCP, VCO, …) for the site.
Role Summary:The Commercial Culture Communications Manager is a key member of the Global Commercial Communications team. He/she will partner with Global Operations, Global Sales, the Global Commercial Functions (Commercial Excellence, Global Channels, and Integrated Sales), and the BHGE regions – including their leadership teams – to drive strategic internal communications plans that are aligned with key commercial and business priorities
Published: 10-08-2018 Role Summary:The PT Platform Leader LATAM demonstrates accountability for functional, business, and broad company objectives. In this role, you will focus on developing the New units and Services business for BHGE Power Transmission in the Region coordinating global and local resources. Essential Responsibilities:Will be key to the role the ability to: Identify opportunities in the Region, lead early
Date: 10-Aug-2018 Company: Lloyds Register Job ID:16262 Location:Hamburg : Am Sandtorkai 41 (LR_L000062) Position Category:Surveyor Department:DE205250 : HAM-NORTH MARINE (DE205250) Position Type:Employee Regular EducationRequired:See Job Description Experience Required:See Job Description Relocation Provided:   (Senior) Surveyor Engines & Machinery Components (Augsburg – Germany) Are you a mechanical engineer with a passion for (ship) engines and marine & offshore engine components? Do you
Date: Aug 10, 2018 Our core values — integrity and trust, respect, transparency and open communication, commercial focus and change leadership — are the lens through which we evaluate every business decision. As a dynamic, growing company that offers extremely competitive compensation and benefits, our employees are our most valued assets and the foundation of Chesapeake’s performance among our E&P
Location: Oklahoma City, OK, US, 73118 Our core values — integrity and trust, respect, transparency and open communication, commercial focus and change leadership — are the lens through which we evaluate every business decision. As a dynamic, growing company that offers extremely competitive compensation and benefits, our employees are our most valued assets and the foundation of Chesapeake’s performance among
June 2018
M T W T F S S
« May   Jul »
 123
45678910
11121314151617
18192021222324
252627282930