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Shell shale oil gamble?

Shell recently announced a $300 million investment in a shale oil operation in Argentina: Shell opens treatment plant in Argentina shale play. Shell is developing controversial tight and shale oil and gas operations globally despite the significant financial and environmental considerations involved. Is this wise, or a sign of desperation? Shell is already on shaky ground with the NAM/Groningen project. There is a nice summary below of what we in the oilpatch already knew for years.
Production from fracced wells (in a shale like in the US) declines very fast. A well in the Middle East in a high permeable reservoir typically declines 3-10% per year.

Shale oil declines 35-50% per year. You need to keep drilling faster and faster until you go bust…..

And when the costs are high and returns are marginal, corners will be cut and other problems start. Polluted aquifers, operators going bust so who will clean up the mess?

US shale oil will keep prices low – will it ??

Give this 5 mins – it’s fun.

Excellent website link below, with great interactive charts on how the shale wells in US are doing.

These were supposed to keep the oil price low remember?

For me it clearly demonstrates that significant increases in production will be very difficult to achieve.

Across the shale plays, the peak drilling year was 2014, when nearly 14,000 wells were drilled…..

In 2015 they drilled 10,000 new wells and ended the year with less production then at the start.

In 2016 they drilled 5,600 new wells and ended the year significantly below where it started.

The graph very nicely indicates that shale now declines 30% year on year and it will be financial suicide to drill the number of wells needed to achieve higher overall rates from shale.

SEE: https://shaleprofile.com

Try the ‘well status’ tab – despite what you read in the press, it appears as though with time, more and more production comes from very poor wells – 85% of wells are now below 100 bopd.

Enjoy playing.

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