Preface

Energy resources are fundamental to the social and economic development of modern society. Inevitably, owing to the increasing demand for energy resources in the world, the volatility of oil prices, and the social and environmental demand for a low-carbon economy, today we are faced with the need to make a rapid shift from fossil fuels to alternative energy resources and from conventional to unconventional petroleum resources. Therefore, the petroleum industry faces challenges of converting the currently unconventional petroleum resources to future conventional ones in order to prolong the life cycle of the oil industry.

Already 150 years of the global petroleum industry’s projected 300-year life span have passed. The petroleum industry has undergone three major stages of development: exploration and exploitation of structural traps; lithostratigraphic traps; and continuous unconventional accumulations through two key theoretical breakthroughs and technological innovations. The first breakthrough is a shift from drilling easy-to-find structural traps to exploring subtle lithostratigraphic accumulations, concentrating primarily on delineating traps. The second is a search for lithostratigraphic traps to develop continuous unconventional oil and gas, which lack well-defined reservoir boundaries.

Conventional petroleum accumulations refer to technically and economically recoverable oil and gas, while unconventional accumulations are resources that cannot be extracted economically by using conventional methods and technologies. The latter are characterized by large resource volumes and poor reservoir properties, with ambient absolute gas permeability less than 1 × 10-3μm 2 and porosity less than 10%. Conventional hydrocarbons only account for 20% of the world’s fossil fuel resources, whereas unconventional hydrocarbons account for 80%. Development of the unconventional requires new technological breakthroughs, which could transform the currently unconventional to future conventional petroleum resources.

From a geological viewpoint, conventional accumulations are oil and gas retained in discrete or clustered traps that are technically and economically recoverable by vertical wells. Unconventional ones are continuous or pervasively charged oil and gas that cannot be normally extracted economically except through implementation of specialized technologies and under favorable economic conditions, for example, horizontal fracturing and platform manufacturing.

The distinction between conventional and unconventional accumulations hinges on whether oil or gas is within a well-defined trap and whether petroleum in a well can be produced economically. Conventional accumulations are characterized by (1) buoyancy-driven accumulation, (2) complete separation from the source, (3) nondiscrete or clustered forms, and (4) profitable productivity from a single vertical well. In the conventional hydrocarbon Exploration & Production, the researcher’s key responsibility is to figure out whether a petroleum accumulation is in a trap; the petroleum geologist’s responsibility is to define the trap’s boundaries; and the petroleum engineer’s responsibility is to pursue long-term high productivity. Unconventional hydrocarbons are characterized by (1) oil and gas accumulated by diffusion, (2) reservoir coexistence with source, (3) continuous or quasicontinuous distribution, and (4) no naturally commercial output. It is a researcher’s responsibility to evaluate the volume of the unconventional oil or gas, that of a petroleum geologist is to find sweet spots and define the continuous area extent, and that of the petroleum engineer is to deal with the low but profitable cumulative productivity for the long term.

In recent years global petroleum exploration has opened three new frontiers: extending from land to deep water, from intermediate and deep formations to over 10,000 meters ultra-deep formations, and from conventional to unconventional petroleum. Moreover, the development of the unconventional requires three technological innovations: (1) geological theory on nano-pore storage and transport systems for continuous accumulations, (2) key technical breakthroughs for artificial permeability by horizontal drilling and multi-interval-fracturing, and (3) platform manufacturing-style exploitation.

The breakthroughs of unconventional petroleum have significant implications. Take shale gas as an example. The breakthroughs in shale gas have an enormous significance with regard to reserve increments and development of theory and technology. (1) We are now entering into a taboo in resource evaluation, adding a new category of resources and increasing resource volumes significantly. In conventional hydrocarbon exploration, shale is considered to be a source, not a reservoir. (2) The unconventional hydrocarbon E&P goes beyond traditional accumulation models, challenges the limit of conventional reservoirs and traditional views of hydrocarbon accumulations in traps, and proves capacity of gas accumulation in nano-storage systems. (3) We now have improved resource development technologies, which upgrade available exploration and development techniques and prolong the petroleum industry’s life cycle. The industrialization of full-scale shale gas E&P in China requires overcoming four major challenges: new theories, innovative technologies, cost effectiveness, and environmental sustainability.

Advancement in petroleum geological theory and innovation in technological development can lead to major breakthroughs in unconventional petroleum E&P and thus change the traditional global energy distribution pattern. The unconventional development model of the U.S. marine-facies dominated accumulations serves as an example for global unconventional petroleum exploration, while the terrestrial-facies-dominated model in China may potentially provide theoretical references for the unconventional resources derived from terrestrial facies. Therefore, a conventional petroleum domain has been formed in the Middle East in the Eastern Hemisphere and an unconventional petroleum domain in North America in the Western Hemisphere.

Tar sand, heavy oil, tight gas, coalbed methane (CBM), and the like have become the key areas of unconventional petroleum development. While shale oil and gas are currently the most important and most hotly pursued resources, tight oil also stands out in the unconventional hydrocarbon resources globally. In 2008, unconventional oil resources had reached 4500 × 108 t, equivalent to that of conventional oil , while unconventional gas was 4000 × 1012 m3, about 8 times that of conventional gas. Production of global unconventional oil has increased dramatically. In 2011 U.S. tight- and shale gas production was over 1700 × 012 m3, and the tight oil production reached 3000 × 104 t.

Unconventional hydrocarbon resources in China, such as tight oil and gas, shale gas, coalbed methane, shale oil, tar sand, oil shale, and gas hydrate, are abundant, with great prospects for development. The tight-sandstone gas coexists with coal measures continuously distributed in China. In 2011 tight-gas production reached 300 × 108 m3, and some 1012 m3-size tight-gas accumulations have been delineated in the Ordos, Sichuan, and Tarim basins, among which the reserve of the Sulige Field is over 3 × 1012 m3 with an annual production of 135 × 108 m3. Tight-oil reservoirs are widely distributed in China, quite often together with lacustrine source rocks. They have been discovered along the basin slopes or at the centers of the Ordos Triassic, Songliao Mesozoic, Junggar Permian, and Sichuan Jurassic formations, with 0.5 to 1 billion tons in-situ reserves. China’s coalbed methane is well developed. After 20 years of technological development and pilot demonstration, significant progress has been made, leading to an annual production capability of 30 × 108 m3. Three types of shale are widely distributed in China: marine, transitional, and terrestrial. We have made significant progress in resource evaluation, prospect prioritization, horizontal well fracturing, and pilot demonstration. Two shale gas wells were successively drilled at the Silurian Longmaxi Formation: Well Wei-201 has daily production of more than 1 × 104 m3 and a horizontal well, and Ning-201-H1 has daily production of 15 × 104 m3 (e.g., 100–200 nano-size organic pores found within the Silurian gas-bearing shale in Well Wei-201, the cover image of the book), which demonstrates that China indeed has great potential in shale gas resources. China has also made great progress in shale oil and gas hydrate.

Five important lessons can be learned from the breakthroughs that have been made in global unconventional hydrocarbon exploration. First, the development of unconventional resources should be gradually carried out after industrial demonstrations. China has recently launched exploration of tight oil and gas, especially in the Ordos, Junggar, Bohai Bay, Sichuan, and Songliao basins. While exploration of coalbed methane and shale gas requires persistent research and demonstration, extraction of shale oil, and gas hydrate need further technological development. Second, technological breakthroughs and large-scale operations are key factors in promoting the development of unconventional resources, such as 3D seismic survey, multifracturing vertical wells, multizone fracturing horizontal wells, and microseismic detection. Third, profitable recovery models, such as the low-cost platform manufacturing model, would fulfill economically recoverable exploitation. Fourth, policy incentives and rising oil and gas prices play a critical role in developing unconventional resources. Fifth, breakthroughs in...