Technology: Who is Using What
February 2019
The oil and gas sectors are large industries with significant free capital, and thus the rate of technological development and improvement is rapid. Across the board, the oil and gas industry can expect to see cost-lowering from automation, the capture and integration of more and more live information into “big data” systems, and incremental drilling and completion technologies supported by efficient well-field and supply-chain management systems that lower labour and downtime.

Oil extraction methods are split between conventional (well drilling) and unconventional (other methods). Likewise, gas extraction is split between conventional (drilling, pumping and compression) and unconventional (other methods). Conventional makes up the bulk of the market for both oil and gas, but unconventional methods of extraction may increase over time, as they allow producers to exploit otherwise-unreachable sources of energy.




By and large, tight oil, shale, and bitumen make up the majority of ‘unconventional’ oil. These resources require different extraction methods than the standard vertical-drill method used for conventional oil extraction. Shale is a key component of the United States’ meteoric rise to become the top oil-producing nation in the world. Key advances that have allowed for more efficient and complete recoveries include longer laterals, closer spacing of frac stages, and increased proppant injection quantities.

Also important are advances in extreme pressure and temperature technologies. These advances—the need for which can be seen in ultra-deep wells in the Gulf of Mexico, such as Mad Dog—allow for access to resources that would otherwise be inaccessible. Largely afforded by improved material construction and alternative approaches, they have allowed producers to efficiently extract oil from reservoirs where depths exceed 5km and pressures exceed 11kpsi.

The extraction of heavy crude is also being optimized by in-situ technologies exemplified amongst Canada's oil-sands producers. These advancements lower the energy required to bring bitumen—grains of sand enveloped by layers of water and heavy oil—to the surface.

Other leaps forward include polymer injection, which can increase the production of thicker, viscous oils; lateral well access technologies which allow maintenance on individual producing legs of a single well; autonomous drilling units that can make significant underground progress without human direction; and significant efforts towards increasing the efficiency of recirculating drilling fluid, and efficiency of the fluid itself.



Expanding refining ability across major and emerging sectors is making possible the optimization of a wider selection of crude. These investments favor heavier crude feedstocks, which exist in abundance. Canadian producers in particular have been making efforts to improve their refining capacity and capability, pushed by the dual demands of large heavy-crude sources and a prevailing lack of export capacity.

Canadian producers, who contend with extraction primarily from oil sands, and thus bitumen, have invested heavily in technologies that assist in the upgrading of bitumen into synthetic crude. Approximately 40% of the country’s bitumen is refined into synthetic crude—a lighter and more valuable product than condensate-diluted bitumen, which makes up the ~60% remainder of the country’s production.



Exploration and Extension

A great deal of progress has been made with oil drilling technologies in recent years, allowing oil producers to turn what were once considered marginal and uncommercial resources into viable commercial developments. Chief among the technologies being used are advanced 3-D seismic and new data processing techniques, to define and map oil deposits in geological formations that have long been known but were thought to be unproductive. These advances alone are calculated to be responsible for the confirmation of 1.5bn barrels of recoverable oil in Alaska throughout 2018.

Looking at more physical and tangible advancements; improvements in drilling technology are reducing the expenditure and risk involved in tapping and extracting underground hydrocarbons. Coiled tubing drill rigs, for instance, have allowed companies to extend several kilometres horizontally from the surface location of a drill rig, allowing for far lower costs and quicker extensions from existing wells than conventional rotary rigs.