American Oil and Gas Reporter - December 2015 - 73

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SpecialReport: Well Stimulation & Completion Technology
by-30 foot cell grid. This simulation was
run for a single well, two wells in the
same stratigraphic target zone, and three
wells in a staggered configuration (labeled
A, B and C, respectively, in Figure 7).
The results show that interference is observed after 20 years for the two-well,
single-zone case, accelerated to seven
years in the three-well staggered case.
After time periods, cumulative per
well production begins to deviate from
the single-well case, with the most drastic
effect seen in the three-well staggered
scenario. Despite the loss in EUR, both
cases display minimal loss compared to
the single-well drainage scenario over
30 years. The two-well, single-zone case

is 2 percent less per well, and the threewell staggered case is 7 percent less per
well.
It is interpreted that increasing xf, potentially having more fracture planes at
identical xf or increasing km would further
accelerate interference time. This interpretation can be applied to explain the
early-time production behavior from pad
2, reflecting more fractures (higher surface
area) at a similar xf than pad 1.
The immense resource of the Eagle
Ford Shale continues to motivate operators
to improve field development and optimization. This study demonstrates that
long-held recovery factor assumptions
within the play are not accurate and fail

to capture the realization that the recovery
method is dynamic and relies on geological,
technological and economic drivers.
This understanding resulted in the extensive evaluation of multizone staggered
lateral downspacing to enhance recovery
in the Eagle Ford development area. The
analysis and integration of various geoscience and engineering datasets were
crucial in the decision making and technical justification of the six-well test program. Early production results are extremely encouraging. Ultimately, these
results are expected to have a drastic impact on field development by dramatically
increasing recoveries and doubling the
economic value of the project.
❒

IEA Says Low Oil Prices Of Concern

LONDON-An extended period of
lower oil prices would benefit consumers
but trigger energy-security concerns by
increasing global reliance on a small
number of low-cost producers or by
risking a sharp price rebound if investments fall short, warns the International
Energy Agency.
In its 2015 edition of World Energy
Outlook, IEA says the sharp drop in oil
prices is shaping the forces-higher demand
and lower supply increases-that will lead
to a market rebalance, although it cautions
the adjustment mechanism rarely runs
smooth.
The Outlook examines two scenarios
for global energy:
* A tightening oil balance leading to
oil prices around $80 a barrel by 2020;
and
* A low-price world where oil remains
close to $50 a barrel until the end of the
decade, and then gradually increases to
$85/bbl in 2040.
World energy demand will grow by
nearly a third between 2013 and 2040 in
what IEA calls its central scenario. Developing countries will drive net growth.
The analysis predicts links between global
economic growth, energy demand and
energy-related emissions will weaken,
and some markets (such as China) will
undergo structural changes in their
economies, while others reach a saturation
point in demand for energy services.
With lower prices pushing out higher-cost supply sources, the agency says
reliance on Middle East oil exports eventually could escalate to levels not seen
since the 1970s. "Such a concentration

of global supply would be accompanied
by elevated concerns about energy security,
with Asian customers-the final destination
of a huge share of regionally traded oil-
particularly vulnerable," the Outlook says.
Developing Asia, a region in which
India takes over from China as the largest
source of consumption growth, is the top
demand center for every global energy
source-oil, natural gas, coal, renewables
and nuclear, IEA says.
The analysis also projects that the
single largest energy demand increase
seen in decades-China's coal use-will
plateau at current levels before declining,
as its economy rebalances and overall
energy demand growth slows. The agency
sees India's high levels of economic
growth, an expanding population, and
low-but increasing-levels of energy use
per capita all pushing its energy demand
by more than double.

Low-Price Scenario
IEA cautions that it cannot rule out a
more prolonged period of low oil prices.
It adds this low-price scenario is based
on:
* Assumptions of lower near-term
growth in the global economy;
* A more stable Middle East;
* A lasting switch in production strategy by the Organization of Petroleum
Exporting Countries in favor of securing
a higher share of the oil market, as well
as a price that defends the position of oil
in the global energy mix; and
* A more resilient non-OPEC supply,
notably from U.S. tight oil.
"With higher demand, led by the trans-

portation sector pushing oil use up to
107 million barrels a day in 2040, the
durability of this scenario depends on
the ability and willingness of the large
low-cost resource holders to produce at
much higher levels than in our central
scenario," the Outlook states. "In the
low-price scenario, the Middle East's
share of the oil market ends higher than
at any time in the past 40 years."
The likelihood of the oil market evolving this way over the long term is undercut
by its effect on producer revenues, the
IEA points out, because the scenario sees
OPEC's oil revenues falling by 25 percent,
relative to the central scenario, despite
its higher outputs.
The agency says lower commodity
prices are not all good news for consumers,
reasoning that economic benefits will be
counterbalanced by increasing reliance
on Middle East oil. The Outlook notes
there is a risk of a sharp rebound in
prices if investments decline. Concerns
over natural gas supply security also are
heightened if prices stay too low to generate the necessary investments in supply,
it says.
In addition, the analysis points out,
while lower oil prices have a significant
influence on deploying renewable energy
technologies in the power sector, the shift
to renewables also relies on policymakers
remaining committed to providing needed
market rules, policies and subsidies.
In its low-price scenario, IEA says
longer payback periods mean the world
misses out on nearly 15 percent of the
SEE IEA PAGE 109

DECEMBER 2015 73

American Oil and Gas Reporter - December 2015

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