Now, with some of these lab studies having confirmed the existence of significant unconventional deposits in Iran, the country has mastered the technical know-how to extract shale oil.
The present article aims to review reasons and objectives of feasibility study projects on unconventional resources while presenting a summary of the activities and results of projects carried out on exploring shale oil, shale gas and gas hydrate.
Background
Unconventional hydrocarbon accumulations, in general, consist of resources that could not be extracted economically or by applying conventional methods and technologies. The main difference between continuous (or unconventional) hydrocarbon accumulations and conventional hydrocarbon accumulations lies in the presence of a specific oil reservoir, the extent of expansion, the contact surface between oil-gas and oil-water, and their pressure system. Unconventional hydrocarbon accumulations include shale oil, shale gas, tight oil sandstones, tight gas, coalbed methane (CBM), shallow biogenic gas, and gas hydrates.
Underground unconventional reservoirs are divided into two categories: oil shale and gas shale, in which the source rock is shale and the oil or gas is accumulated within the shale itself or in adjacent low-permeability reservoir layers. Therefore, these low-permeability reservoirs are classified into two categories: oil-bearing oil shale (or tight oil) or gas-bearing gas shale, depending on the degree and maturity of the source rock.
The following is a review of the specifications of these resources:
Oil Shale
Oil shales are fine-grained, organic-rich sedimentary rocks from which large volumes of oil can be extracted through pyrolysis and distillation. These rocks are often at the surface or have undergone some burial and are immature or slightly mature in terms of thermal maturity. Total oil shale reserves are estimated to be about 409 million tonnes of oil in place in 33 countries. That does not take into account many reserves and resources that have not yet been thoroughly studied, and their volumes have not been made public. Among the leading countries in the field of studying and extracting this resource are Estonia, Jordan, the United States, and Australia.
The best-known of these deposits is the Green River Formation in the US. In Iran, these resources have been studied for the first time in the Qalikuh area of Aligudarz County in Lorestan Province, where organic-rich horizons lie within the Sargalo (Middle Jurassic) and Garo (Lower Cretaceous) formations.
Gas Shale
Among unconventional gas reservoirs, gas shale is considered one of the main reservoirs in which gas produced from organic-rich source rock is trapped within this layer and not released. These organic-rich layers are often of very low porosity and permeability. In gas shale reserves, the hydrocarbon system is formed within the gas source layer, and this layer acts as the source, reservoir, and caprock. The gas available in shale gas reserves exists in two forms: absorbed and free. Horizontal drilling and hydraulic fracturing are used to produce from these reservoirs. The top producers of such a resource are China and the US. In Iran, shale gas resources have been identified and evaluated in the Sargol and Garo shale formations of Middle Jurassic and Lower Cretaceous age in the Lorestan region of the Zagros sedimentary basin.
Shale Oil
Shale oil is one of the most important and largest types of underground oil reserves in which shale is the source rock and the oil is accumulated within the shale or in an adjacent layer. In other words, any accumulation of hydrocarbons produced by artificial and stimulated methods, such as hydraulic fracturing from layers with very low porosity and permeability, such as shale, siltstone, sandstone, and carbonate layers, is called shale oil or tight oil. Massive shale oil reservoirs have relatively poor petrophysical properties (porosity, permeability, etc.). These tight reservoirs are widely distributed and have porosity less than 10% and permeability less than 1 * 10-3 µm2. The US, Argentina, China and Canada are among the most important countries producing oil from this source. It is predicted that a huge volume of shale oil will exist in tight layers and reservoirs in Iran’s oil basins due to the potential of a suitable and efficient hydrocarbon system. The Abadan, Dezful, and Moghan plains have been identified as the most susceptible areas for this type of unconventional resource and have been suggested for further studies.
Gas Hydrate
Gas hydrate is a gas molecule (mainly methane) trapped in a network of water molecules linked by hydrogen bonds. Gas hydrate is classified as an unconventional hydrocarbon reservoir and is considered one of the world’s potential future energy sources. Based on the results of the experimental recovery of hydrate deposits and taking into account the required technology and production costs, methane gas produced from these deposits is expected to be distributed in East Asia in the coming years and throughout the world energy network for a decade after that. This reflects that, like the oil/gas reserves of Chile, production from hydrate deposits will also have a significant impact on the world energy market. Japan and China are leading the way in studying such resources. In Iran, initial and supplementary research and studies have also been carried out in the waters off the Gulf of Oman.
Coal Bed Methane (CBM)
One of the unconventional gas resources is methane, which is found in coal layers. This new gas resource has been the center of attention since the 1980s as a huge source of marketable gas. Currently, many countries, including China, the US, and Australia, are looking to produce and develop technical know-how to produce from these resources. According to statistics, coal layers store large amounts of methane gas (10,000 to 30,000 tcf). China, the US, Australia, and India are among the countries that are active in the exploration and production of CBM. Initial studies in Iran show that coal mines in the areas of Tabas, Kerman, and Tazreh of Shahroud are suitable for further studies and evaluations in this regard.
Tight Gas
Tight gas reservoirs are those with very low permeability from which dry gas is produced. In terms of lithology, these reservoirs can also be sandstone, carbonate, and shale. A tight gas reservoir is often a sandstone or carbonate rock reservoir (with or without fractures) with an in-place permeability of less than 0.1 millidarcy. In many completely tight reservoirs, their in-place permeability may be less than 0.001 millidarcy. The matrix permeability of these sandstones is very low. The very poor communication of pores and fine capillaries causes very low permeability. The gas that flows in these types of rocks is usually at a low rate, and formation fracturing methods are required for production.
Unconventional Resources in Iran
Today, unconventional hydrocarbon resources, and specifically shale oil and gas, are one of the issues that have changed the rules of game in the world’s energy arena, and the US, due to its possession of the technology for commercial extraction of this type of oil and gas and its benefit from their vast resources in various parts of its territory, has not only designed a positive economic outlook for itself, but also is expected to change the world’s energy equations. These actions will have significant security, political, and economic implications, and countries with or without production of these resources will play different roles in shaping new power relations in the international arena. Given current projections of shale oil and gas production in the US and the price conditions for shale oil and gas extraction, it is expected that the US’s position in the world will improve through energy self-sufficiency and freedom from energy supply constraints. According to statistics, in 2018, North America became an exporter of oil and gas in 2021, and was able to disrupt the balance of production in global equations, which will result in a shift in the focal point of investment in oil and gas, the use of competitive advantage, and a change in the global balance of political and economic power.
Within the framework of the Five-Year National Economic Development Plan and the “Maximum Exploration of Iranian Hydrocarbon Resources on a Global Scale” vision, and due to its precise and accurate knowledge of global and local changes, the NIOC Directorate of Exploration has embarked on exploring unconventional hydrocarbon resources alongside conventional resources within sedimentary areas.
Before the Islamic Revolution, only three studies had been conducted on shale oil in Qalikuh in Lorestan. In 2009, the NIOC Directorate of Exploration embarked on feasibility studies to identify and assess the volume of such resources based on drilled exploration wells and surface geological outcrops. That yielded numerous reports.
Since 2016, the Directorate has introduced short-term and long-term plans to identify unconventional hydrocarbon reservoirs across Iran. The plans have been adopted within the framework of feasibility studies, and the idea is to benefit from the entire scientific and lab potential both locally and internationally within the framework of governing regulations of the NIOC Directorate of Exploration.
According to the program, the most important work topics in unconventional hydrocarbon resources include oil shale, gas shale, and gas hydrate as the leading areas, as well as CBM, shale oil, and tight gas, which have been evaluated in the past years and have yielded significant achievements and results.
The most important reasons for conducting studies and assessments of unconventional hydrocarbon resources in Iran are as follows:
1. Sustainable energy supply through exploration of unconventional hydrocarbon resources in line with the general policies of national development plans;
2. Determining the volume of unconventional hydrocarbon reserves in line with the exploration, development, and operation of national reservoirs;
3. Providing a diverse energy mix from various hydrocarbon reserves;
4. Growing trend of technology towards exploration and commercial production, and reducing the cost of recovery from unconventional resources;
5. Growing importance of unconventional resources in the supply and development of energy in the world;
6. Planning and investment in unconventional hydrocarbon resources in the world, especially neighboring countries and OPEC members;
7. Forecasting the high volume of hydrocarbon reserves in the country’s sedimentary basins;
8. An effective step in resolving the energy imbalance, especially gas, considering the significant volume of shale gas reserves;
9. Helping supply gas and meet gas needs in implementing projects to enhance extraction in production areas.
Activities in Iran
Shale Oil
The research project “Exploration Studies to Determine Volume of Reservoirs and Assessing Features of Unconventional Oil (Middle-Upper Jurassic Oil Shales) in Qalikuh Area of Lorestan Province” was conducted in two phases, starting in 2010, by the Petroleum Institute and the Petroleum Engineering Department of the University of Tehran in collaboration with domestic and foreign research centers and companies. The first phase of studies and preparation of geological maps and exploration and mineral evaluation operations, geochemical studies, initial assessment of oil yield potential, and calculation of oil shale reserve volume were carried out. In the second phase, using advanced methods, the maximum oil production potential or actual oil yield potential of oil shale in the Sargalu and Garu formations was determined, and production methods were introduced. In this phase of the study, the recoverable volume of oil per ton increased significantly. In this phase of the study, the volume of oil extracted per ton increased significantly. In addition, oil production from oil shale on a laboratory scale (semi-industrial) and environmentally friendly was localized for the first time in the country. The technology available in oil shale production and localization methods has also been created to create a laboratory system to build an industrial system in the region. The implementation of this project is completely technological, and its final product is the design and construction of the first shale oil production system in Iran. With the completion of the current project, Iran has become one of the few countries with the technical knowledge to operate the shale oil industry.
Gas Shale
The project for “Identifying and Evaluating Shale Gas Resources in the Middle Jurassic to Lower Cretaceous Sedimentary Sequences in the Lorestan Region” was signed with the Research Institute of Petroleum Industry (RIPI) in 2014, partnering with internationally recognized institutes. It was carried out in two phases and resulted in achievements such as developing methods and identifying shale gas reserves in the Lorestan region; providing the initial volume of in-place and recoverable gas and oil in these unconventional reserves; and an economic assessment of the identified reserve and a proposal to drill a pilot well for gas shales. In the first phase, by conducting geological, geophysical, petrophysical, and geochemical studies, an initial assessment of shale gas resources in the Sargalu and Garu formations was carried out, and susceptible areas were identified. In the second phase, detailed geoscience, petroleum engineering, and model earthworks studies were conducted along with hydrocarbon system modeling in the susceptible areas, and the volume of in-place and recoverable gas reserves was determined. Finally, by conducting a technical-economic feasibility study on gas shales in the Lorestan region, 21 potential areas were identified, and among these, one area was identified as the best candidate for pilot well drilling.
Gas Hydrate
Projects to identify and conduct detailed geophysical surveys of gas hydrate resources in Iranian high seas were implemented in two phases since 2014 by RIPI in cooperation with companies, universities, and well-known international institutes abroad. These studies led to the measurement and modeling of rock physics related to gas hydrate on samples obtained from drilling boreholes (the first time in Iran), the construction of a virtual well (the first time in Iran), and the estimation of the initial volume of gas hydrate resources and free gas beneath them. In the supplementary part, a more accurate identification of the expansion and volume of gas hydrate resources and free gas beneath them in Iranian waters, the introduction of suitable exploration target locations for drilling gas hydrate resources and free gas beneath them, and the feasibility study of drilling deep waters containing gas hydrate, and the determination of drilling priorities.
The goals of these study projects in the field of unconventional resources also include achieving the technological value chain for the exploration and identification of unconventional hydrocarbon resources in Iran to restore the country’s energy development strategy; studying and identifying the minimum limits and potential of unconventional reserves in Iran’s exploration areas; also providing the minimum and initial volume of in-place and recoverable gas and oil in these unconventional reserves throughout the country to outline the country’s energy development strategy; and providing proposed exploration and production study packages and defining one or more blocks for investment in the exploration and production of unconventional resources (for domestic and foreign investment).
It is obvious that to achieve the aforesaid goals, macro-management (governance) issues and requirements are necessary so that, given the importance and investment of various countries, especially Iran’s neighboring countries, such as Saudi Arabia, Bahrain, and Oman, the competitiveness of NIOC can be maintained in this field in terms of energy security. One of these requirements is to review and categorize the limits of existing powers and laws in the exploration and production of resources in terms of legal, financial, and investment. It is also necessary to support the introduction of exploration blocks and conduct joint studies with foreign and Iranian companies and research institutions that have advanced technologies in the field of exploration and production of unconventional hydrocarbon resources. In this regard, it is necessary to increase the level of managerial and technical know-how through holding domestic and foreign training courses, attending global conferences and using international expert consultants in this field. That requires major planning and special attention.
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