Formation Evaluation Challenges in Unconventional Tight Hydrocarbon Reservoirs

Transcription

1 Formation Evaluation Challenges in Unconventional Tight Hydrocarbon Reservoirs Mauro Gonfalini SPE Italian Section June 7 th, 2005 Why do we need to discuss about Unconventional Hydrocarbon Reservoirs? Global economy is strongly based on Fossil Fuels representing 90% of the primary energy produced in the world. Fossil Fuels,, by definition, are not renewable sources of energy, and their amount is limited. Oil, by itself, represents about 40% of the Fossil Fuels used worldwide. Oil production peak is close! Gb/a THE GROWING GAP Regular Oil 60 Past Discovery 50 Future Discovery 40 Production 30 Past discovery based on ExxonMobil (2002). 20 Revisions backdated SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 3 Newsletter ASPO n 49 - January 2005 Outline of the lecture The resource Triangle Introduction Definitions Gas from Tight Reservoirs (mainly sandstones) Gas from Shales Gas from Coal Conclusions Mr Holditch vision about fossil hydrocarbon resources. Conventional reservoirs small volume, easy to develop Unconventional Reservoirs Large Volumes, difficult to develop Past Present Increased pricing Increased technology Future Unconventional sources are Next on the E&P Radar - Drilling Contractor - November/December 2004 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 2 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 4 1 2

2 The resource triangle modified Expected decarbonization trend The resource triangle is here modified in order to better define the focus of this lecture. increased pricing Focus of the lecture Resource Triangle modified Gas shales increased technology Due to environmental issues and availability of fossil energy sources, we see in the industry a trend toward decarbonization of fossil fuels SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 5 SPE Is Bitumen a Petroleum Reserve? J. R. Etherington et al., 2004 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 7 The Increasing Role of Unconventional Reservoirs in the Future of the Oil and Gas Business SPE Lecture S. A. Holditch Conventional vs Unconventional Hydrocarbon Reservoirs The Golden Age of Natural Gas The increasing role of Unconventional Reservoirs in the Future of the Oil and Gas Business - SPE Lecture S. A. Holditch The Schlumberger Natural Gas Strategies 2004 The Schlumberger Natural Gas Strategies 2004 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 6 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 8 3 4

3 Primary Energy Coal Hydroelectricity Nuclear energy Natural Gas Oil Is this really true? SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 9 bp statistical review of world energy June 2004 Formation Evaluation Formation Evaluation is the analysis and interpretation of well log data, drill stem tests, etc. in terms of the nature of the formations and their fluid content. The objectives of Formation Evaluation are: to ascertain if commercially producible hydrocarbons are present, to determine the best means for their recovery, to derive lithology and other information on formation characteristics for use in further exploration and development. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 11 From SPWLA Glossary Unconventional Reservoirs: some example of the growing interest in the industry Formation Evaluation and E&P process Exploration & Discovery Evaluation Appraisal Development & Production Optimization FE Technologies Surface Logging Well Logging Coring Formation Testing Well Testing Disciplines Geosciences Drilling Production (feasibility) Reserve evaluation FE Technologies Surface Logging Well Logging Coring Formation Testing Well Testing Disciplines Geosciences Drilling Reservoir Engineering Production (design) Reserve certification FE Technologies CH Logging Reservoir Monitoring & Surveillance Disciplines Geosciences Drilling Reservoir Engineering Production (optimization) SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 10 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

4 The importance of Tight Gas Reservoirs Unconventional resources are probably very large, but their character and distribution are not yet well understood. Tight Gas sands in the U.S. comprise 69% of gas production from all unconventional gas resources and already account for 19% of the total gas production from conventional and unconventional sources. Total Gas In Place related to Tight Gas sands in the U.S. is estimated between 100 & 400 Tm 3. Other countries: Canada, Australia, Argentina, Venezuela, Egypt, Algeria and? SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 13 What makes a reservoir tight? Effective porosity, viscosity, fluid saturation, the capillary pressure are some of the import parameter controlling the effective permeability of a reservoir. Rock parameters are controlled by depositional and post-depositional environments: deep basinal or over-bank levees in flood plains areas (deposition of very fine sand to silt and clays, which form poor reservoirs on lithification); high-energy clean sandstones (intergranular( pores occluded by authigenic clay minerals & cements); post-depositional diagenetic events act many times negatively, reduce the effective porosity and thereby make the rock less permeable. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 15 Conventional Gas Sand Tight Gas Sand G. C. Naik, 2003 Gas production from Tight Reservoirs Tight hydrocarbon reservoirs are the ones characterized by low quality due to low permeabilities,, generally in the range between a md and a µd (a millionth of a Darcy!). Tight reservoirs can be of any kind: clastics, carbonates and igneous rocks. Higher Quality Tight Hydrocarbon reservoirs are already in production from years, but new E&P technologies and methodologies will lower the cost to drill, characterize, complete and produce hydrocarbons from highly tight formations. Each one of these reservoir types requires specific E&P strategies and adequate Formation Evaluation Techniques. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 14 Petrophysical attributes of low-permeability Reservoirs The low-permeability structure and the response to overburden stress have a strong impact on the low-permeability structure and the relative permeability relationships. In low-permeability reservoirs there can be a broad range of water saturations in which neither gas nor water can flow. In some very low-permeability reservoir, there is virtually no mobile water phase even at very high water saturations. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 16 G. C. Naik,

5 Key F. E. technologies Tight gas sands often exhibit unique gas storage and producing characteristics that require: improved knowledge of the nature, geometry and distribution of petrophysical properties, more dense well spacing, adequate Stimulation & Production techniques. Petrophysics is a critical technology required for understanding low-permeability reservoirs. Geomechanics is also very important for the correct implementation of advanced Drilling technologies and of adequate stimulation and production strategies. Reservoir Characterization The objective of the reservoir characterization program is to acquire data to identify and characterize the mechanisms controlling production and optimum development. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 17 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 19 Data Acquisition & Formation Evaluation The objective of the reservoir description program is to provide sufficient data to accurately describe the resource in place and reserve potential. Surface Logging Coring Well Logging Formation testing Production Logging & Reservoir Surveillance Applications Reservoir Characterization Reservoir Modeling Drilling & Completion Well Stimulation & Production Optimization Reservoir Modeling The ultimate goal of reservoir modeling is to validate the reservoir description and characterization programs and to develop realistic 3D well bore and reservoir models that can be used to predict future performances: increase in model complexity with time stochastic models deterministic models model integration SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 18 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

6 Reservoir Monitoring and Surveillance The objective of reservoir monitoring and surveillance is; a) continuously monitor well production performance, b) obtain data required to quantify any anomalous behavior and c) update the reservoir models. Dynamic reservoir characterization data are critical for evaluating production performance (Pressure WD, CH Testing, PLT s & Permanent Sensors, etc.). Importance of Surface logging data SPE ACTE 2004 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 21 C. Carugo,, V. Chelini,, S. El Manaa,, EAGE, Tunis, 2002 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 23 Drilling & Completion Economically producing gas from the unconventional sources is a great challenge today and tight gas reservoirs require advanced techniques to enable migration distances from formation to well to be reduced. Therefore modern technologies for the production of tight gas reservoirs are horizontal and multilateral wells, as well as under- balanced drilling. Stimulation and cementing techno- logies are proving very significant for improved economic production. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 22 Formation Testing The low permeability of these reservoirs slows down their response to pressure transient testing so it is difficult to obtain dynamic reservoir properties and, therefore, to characterize gas reserves. Moreover, the determination of real composition of fluids trapped in tight reservoirs is very challenging, since recovered fluid often reflects the composition of the ones related to largest pores, interstices and invaded zone. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 24 RCI Baker Atlas 11 12

7 Well logging in Tight Reservoirs High porosity/low permeability (Sandstones, carbonates & volcanic) Strong diagenetic effects and clay filling by chlorite and illite need to be studied by means of ad hoc petrophysical models and specialized lithology logs Low Resistivity contrasts affect Water Saturation evaluation Good total porosity determination using Density, Neutron & Sonic NMR logging: good Φ estimation, poor K estimation Extensive laboratory analysis for Archie parameters (especially n ) ) are required. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 25 Log interpretation uncertainties in a tight gas bearing sandstone SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 27 5 ohmm ohmm P. F. Worthington,, 2000 Uncertainties on Resistivity measurements and petrophysical models Well logging in Tight Reservoirs Low porosity/low permeability (Sandstones & carbonates) Very high Resistivity contrasts, anisotropy and dipping effects require Resistivity modeling Lack of accuracy for all porosity logs (Density,( Neutron, Sonic and NMR) Extensive laboratory analysis for Archie parameters (especially m and Rw) Need for image log acquisition and interpretation (geology and formation/stress anisotropy) Need for acoustic anisotropy acquisition and interpretation (to( improve seismic interpretation and better characterize in situ stress anisotropy) SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 26 Log interpretation uncertainties in a tight gas bearing sandstone Uncertainties on Archie parameters and log derived porosities SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

8 Log interpretation uncertainties in a tight gas bearing sandstone Uncertainties on on fluid contacts (CPI vs RFT) Supercharge effect on WFT data SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 29 Schlumberger WEC Algeria GWC RFT GWC LOG New Logging technologies: Array Acoustic measurements Wire Line technology Improved petrophysical analysis Seismic calibration & AVO Stoneley permeability In situ stress anisotropy Fracture location (OH/CH) Rock Mechanics SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 31 While Drilling Real-time applications: Pressure Management Seismic Time-Depth Tie-In Geosteering Well bore instability analysis Formation Evaluation Post-well applications: Detailed petrophysics Seismic calibration & AVO Rock Mechanics. Uncertainty reduction by integration To reduce the uncertainty in the estimation of hydrocarbon in place and fluid contact in tight gas reservoirs, it is essential to integrate core data and log analysis (i.e. saturation height functions) to better define petrophysical properties such as Sw and FWL. (SPE 84390). This implies that the Well Data Acquisition program is defined with the strong collaboration among all the different specialists involved (Eni & Total WDA SPE 63284) New Logging technologies: Nuclear Magnetic Resonance There are strong limits to the application of NMR logging in low porosity, low permeability gas bearing formation. New tools can better cope with these conditions provided that pre job/post job modeling and strong integration with all the available well data (core, pressure data and fluid samples, logs, etc.) are performed by well trained experts. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 30 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

9 Fracture network characterization Fracture characterization by imaging logs Tight reservoirs are prone to intense fracturing and fractures have a strong impact on drilling, exploration & production activities. The correct knowledge of the relationships between the in situ stress and the natural fracture system is of primary importance for: minimizing drilling risks, maximizing hydrocarbon production minimizing operational costs. To achieve these goals, a very strong integration among different disciplines (i.e. Geosciences, Reservoir Engineering, Geomechanics,, etc.) is mandatory! SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 33 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 35 Open vs drilling Open vs drilling induced fractures induced fractures In situ stress & In situ stress & fractures fractures relationships relationships Monitoring Monitoring of of induced induced fractures fractures Courtesy of Schlumberger Fracture network characterization Distribution, orientation and density of natural fractures need to be studied but, reservoir engineers also need detailed analyses of the effects of interstitial clays and fluids. Conventional methods of producing gas from tight reservoirs usually requires some form of artificial stimulation (such as hydraulic fracturing) and/or other ad hoc completion and production strategies that are strongly dependant on correct characterization of the natural fracture systems and in situ stress conditions. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 34 R. Nelson SPE ACTE 2004 SH max direction from Image Logs Well information & well bore stability Courtesy of Baker Atlas Importance of OH & CH Shear Wave anisotropy SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

10 Maximizing production in tight reservoirs To significantly increase production from low permeability and widely dispersed resources, correct well bore positioning is mandatory! This requires extensive use of While Drilling Formation Evaluation technologies such as Advanced Geosteering techniques based on deep reading Seismic and E. M. technologies. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 37 Cross hole Electro Magnetic Tomography SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 39 depth (m) location (m) percent difference resistivity Time X depth (m) location (m) percent difference resistivity Time X + 1 Deep Resistivity measurements Tight Gas Sands Development: how to improve Recovery Efficiency (Intensive Resource Development DOE/NETL) The IRD suite of technologies includes: natural fracture identification technologies to delineate high-productivity sections within a multi-township township tight gas accumulation; well logging technologies that reliably distinguish between gas and water bearing sands, and can help identifying and quantifying volumes of secondary porosity; multi-zone completion technologies that can efficiently stimulate multiple zones without damaging the formation; well testing technologies to establish drainage volumes, well-to to-well communication and anisotropic flow patterns. Gas TIPS Winter 2004 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 38 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

11 Time to prepare for the future: advanced technologies in Tight Gas Sands Lessons learned from previous lectures Exotic drilling & Well Clustering (offshore technology brought to on shore) Advanced geosteering State of the art Well Logging technologies (OH & CH, WL & WD) Integrated Geosciences New well completion technologies New stimulation techniques On site waste management Remote operation control & integrated data handling/interpretation Well performance surveillance and data handling of very long term Production Logs &/or Permanent Sensor measurements SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 41 Steps toward ultimate drilling performance Mansur Al Hammad Saudi Aramco Conclusions: ultimate performance is a profit of well spent investments in the following steps SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 43 TIME Time to prepare for the future: what do we need? Implementation of adequate organizational strategies in both Operators and Service providers Making available adequate technical (rigs, geological and logging units, etc.) and human (expert geoscientist and engineers) resources Develop new geological/geophysical approaches Making use of advanced petrophysical Real Time (LWD) acquisition/interpretation methods Implementation of long term organizational plans and strong integration among the different disciplines SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 42 Lessons learned from previous lectures Reserve Analysis for Tight Gas S. A. Cox, Marathon Oil Co. Regardless the Reserve Analysis Method used, we need to face several challenges: models in use are often oversimplified; very long time is required to minimize the uncertainties on the results; operators need to cope with vast amount of data for a very extended range of time; strong integration of disciplines is required. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

12 Gas Shales Courtesy of Halliburton SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 45 Gas shales are fine grained rocks where the predominant gas storage mechanism is sorption and gas is stored in volumes that are potentially economic. Since the sorption capacity is mainly related to surface area and the micro- porous organic fraction has the highest surface area,, gas shales are of necessity organic rich. Rocks included in this definition of gas shales are organic rich shales, true shales, mud rocks, siltstones, and very fine grained sandstones. In many basins, gas shales are gradational with tight sands. Typical well logging response of Organic Rich Shales high GR high Resistivity low density high Neutron high transit time high PEF SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 47 Total Organic Carbon evaluation using well data Organic Rich Shale M. Mullen et al Formation Evaluation of Gas Shales Primary porosity and permeability very low Successful projects depend upon interconnectedness of natural fracture networks, mineralogy and thermal maturity of the shale. Shale reservoir analysis is very similar to that is used in CBM plays, combining petrophysics and lab measurements. Wire Line logs can be a very useful tool in scouting for shale plays and quantifying the reservoir potential Relationships between TOC and Gas content in Organic Rich Shales Gas Shale Characterization tools are available but they need to be further developed to maximize gas production from the source type. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 46 M. Mullen et al SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 48 M. Mullen et al

13 Natural Gas from Coal Coal is the most abundant fossil fuel in the world. The direct use of coal dramatically contribute to pollution but coal also play as host to plentiful natural gas resources. Natural gas reserves from coal are reported as between 100 and 300 Tm 3 worldwide. Natural gas produced from coal seams is a more acceptable energy source already being exploited in several locations in the world. bp statistical review of world energy June 2004 Important but not documented activity in Central & Eastern Europe Why Natural Gas from Coal? During coalification, large quantities of methane rich gas are generated and stored within the coal on internal surfaces. Because coal has such a large internal surface area, it can store surprisingly large volumes of natural gas, six or seven times as much gas as a conventional natural gas reservoir of equal rock volume can hold. Methane generation is a function of maceral type and thermal maturation process. Producing Natural Gas from Coal Schlumberger Oilfield Review - Autumn 2003 Producing Natural Gas from Coal Schlumberger Oilfield Review - Autumn 2003 SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # Schlumberger 49 White Paper on Unconventional Gas (2004) SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 51 increasing coalification Coal Coal is a compound of solid organic minerals rich in carbon,, with very different compositions and properties, owing their origin to slow decomposition and chemical conversion (coalification( coalification) ) of immense masses of organic material (macerals( macerals,, originated mainly from plants), generally found in stratified deposits in association with shales and ashes. Some relevant chemical and physical characteristics of coals classified by rank SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 50 How Natural Gas is produced from Coal? Water permeates coal beds and its pressure traps methane within coal. To produce methane from coals beds, water must be drawn off first, lowering the pressure so methane can flow out of the coal to the well bore. Coal beds are often fractured, therefore fractures & cleats may strongly contribute to gas production. Cleat and natural fracture network characterization is therefore important to better define reserves and in optimizing drilling and production strategies. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

14 Natural Gas from Coal: key factors Pre drilling assessment of nature and geometry of the coal reservoir (geology and geophysics) While drilling information about main coal reservoir characteristics (coal ranking, reservoir geometry and structure, petrophysical, geochemical and geomechanical properties of the reservoir, etc.) In situ estimation of permeability from cleats and natural fractures and their relationships with in situ stress Post drilling integrated Reservoir Characterization and Modeling Cementing and completion strategies defined in accordance with the results of Reservoir Characterization/Modeling and Geomechanical studies Integrated Production Monitoring and Reservoir Management strategies (i.e stimulation, fracturing, etc.) aimed at the maximization of gas production and minimization of operational costs and environmental impact (i.e. water management, etc.) SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 53 Formation Evaluation aspects Proximate Analysis & Coal ranking Resistivity Density/Neutron Natural & Induced GR spectrometry Full bore core data Surface logging Data Quantitative well log interpretation Geochemistry of coal & water Impact on Understanding coal reservoirs Adsorbed Gas & Reserve evaluation Reservoir Modeling & Geomechanics Environmental issues SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 55 Producing Natural Gas from Coal Schlumberger Oilfield Review Autumn 2003 Formation Evaluation Goals Coal seams geometry assessment Proximate analysis (lithology, volume of ashes, fixed carbon, volatiles, clays, etc.) Coal rank determination Adsorbed gas content Cleats/natural fracture distribution, aperture & porosity In situ stresses and Geomechanical properties Production monitoring & stimulation strategies Formation Evaluation tools Full bore core analysis (Geology & Petrophysics) Surface logging & Geochemical data OH & CH logging Formation & Well testing, Production Logs & Monitoring SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 54 Formation Evaluation aspects Cleat & fracture characterization, in situ stress and Geomechanics OH & CH conventional logs Image Logging (electrical/acoustic) Digital Acoustic Logging Surface Logging Data Full bore Core data Formation & Well testing Impact on optimization of Drilling, Stimulation Production Strategies Environmental issues SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 56 Producing Natural Gas from Coal Producing Natural Gas from Coal Schlumberger Oilfield Review Schlumberger Oilfield Review Autumn 2003 Autumn

15 Formation Evaluation Aspects New developments in Gamma Ray Spectrometry improve lithology and mineralogy characterization to enhance Formation Evaluation of Coal Beds for Natural Gas production in terms of location, ranking and geometry. It is important to remind that a rough evaluation of gas rate from the estimated volumes of coal is: ft 3 per ton of coal economical thickness of coal seems is 20 ft (6 m) or more SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 57 About the actors We have seen that each Unconventional Resource type and even each reservoir need the adoption of adequate and often complex integrated strategies involving many different disciplines, experts and competences. We have seen also the fundamental role of Formation Evaluation for the correct handling of the E&P process in Unconventional Hydrocarbon Reservoirs. A potential problem of this aspect is related to nature and size of the operators in the arena of Unconventional Hydrocarbon Reservoirs (often( small independent companies, National Labs and Academia) ) where the lack of financial resources, expertise, team working attitude and adequate Hardware/Software environments,, may dramatically influence the efficiency of the process. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 59 What next in FE techniques used in E&P to produce Natural Gas from Coal? Need to improve geological, geochemical and hydrological characterization of natural gas generation and production from coal by means of: introduction of novel integrated well data acquisition technologies improvement of existing well data interpretation methods improvement of existing reservoir engineering and reservoir modeling techniques Need to improve integration among disciplines to maximize production and minimize operational costs and environmental impact Need to improve education and integration among the different actors operators (often small), service contractors and academia: Geoscientists, Reservoir engineers, Drillers, Completion & Production engineers, HSE specialists, Economists, Portfolio & Asset Managers, etc. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 58 Unconventional Hydrocarbon Resources relevant environmental issues Tight reservoirs (land & offshore) Gas Shales (land) Natural gas from coal (land) Very large number of wells required Intensive stimulation treatments required Water/gas ratio from large to moderate Intensive stimulation treatments required Very large number of wells required Very large production of water in early stages of production Very large number of wells required Formation Evaluation & Integrated Geoscience Studies can strongly contribute to the mitigation of this undesired environmental effects. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide #

16 Conclusion 1/2 Much is yet to be learned for a successful exploitation of Unconventional Hydrocarbon resources: about occurrence, controls and recoverability (geosciences, engineering, etc.); about environmental implications of their development and exploitation; about the global economical and industrial impact of the exploitation. Formation Evaluation plays a fundamental role of in the integration of the different aspects of the E&P Unconventional Hydrocarbon Resources process, but... SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 61 Conclusion 2/2 the Formation Evaluation challenge can only be won if: existing and novel well data acquisition & interpretation technologies are correctly applied; planning, acquisition, interpretation of well data process is shared among the different specialist involved; both Operators and Service Providers are ready to cope large volume of data and for long term investments in technical & human resources; highly trained and prone to team working professionals are involved; adequate Knowledge Management systems are implemented. SPE Italian Section - FE challenges in Unconventional Hydrocarbon Reservoir slide # 62 31