Monday, March 9, 2009

Chevron Looks to Unlock Massive Middle East Oil Reserves

Chevron is pumping hard work and money to prove there's a lot more oil out there to pump than some critics give credit - and they're doing it in the Middle East, in the neutral zone, sandwiched between Kuwait and Arabia.
Chevron, the second-biggest US oil company, will in the next few months begin large-scale testing of a production technique that could unlock tens of billions of barrels of reserves across the Middle East.

The technique, for producing heavy oil that cannot be extracted using conventional methods, will be used in the partitioned neutral zone between Saudi Arabia and Kuwait.

Chevron revealed last month in its annual filing to the US Securities and
exchange Commission that the neutral zone deal had contributed “the majority” of
a 384m barrel increase to the proved oil reserves of the consolidated group.

Without that contribution, additions to its proved oil reserves last year would have fallen well behind the consolidated group’s production of 520m barrels.

Chevron, which makes its annual strategy presentation to analysts on Tuesday, now hopes to add much more than that in reserves of heavy oil that it has not previously been able to extract.

The additional oil accessible in this way could run into the billions of barrels in the neutral zone alone, and there are potentially much larger reserves in both Saudi Arabia and Kuwait.
Chevron is experienced in producing heavy oil in California and Indonesia using “steamflooding”: injecting steam into the reservoir to warm the oil until it reaches a syrupy consistency and can be pumped out.

Those fields are sandstone, however, while the fields in the neutral zone, like most of the fields in Saudi Arabia and Kuwait, are of carbonate rock such as limestone. Steamflooding has never been used in carbonate fields, because the steam would dissolve minerals in the rock, clogging up the reservoir and the wells.
Chevron will engage in a pilot program this summer to see if problems in the Wafra field, located in the neutral zone, can be overcome.
- Brewskie

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