Oilex to use shale gas technology at Cambay

Vol 14, PW 6 (09 Sep 10) Exploration & Production

Australian explorer Oilex is planning a pilot well later this year or early 2011 at the Cambay block in Gujarat using advanced US technology for the extraction of shale gas.

“Let’s be clear,” we hear. “None of the shale sections in the Cambay block are ‘pay’.

Cambay ‘pay’ is in siltstone, of a quality between sandstone and shale. But advanced technology to extract shale gas can be applied to ‘tight’ formation gas in Cambay rocks that were previously not regarded as potentially commercial.

” Oilex’s drilling programme depends upon the availability of long-lead items, such as high pressure casing, and special wellheads. If successful, the pilot well could be followed by up to 50 horizontal wells drilled over the next five years, producing a total 100m cf/d, or around 3m cm/d.

Environmental clearance is in place to drill 60 wells, of which Oilex has already drilled five. One of the biggest problems experienced by Oilex (45%) at the Cambay block, which it operates with partner GSPC (55%), has been the low permeability of rocks, witnessed during earlier well testing.

“Production would be fine for a few days,” adds a source. “But then it would drop off during testing.

Poor permeability is also one of the biggest features of shale gas.” Oilex counts itself lucky that huge strides made in US shale gas extraction technology over the past three years can now be applied to release ‘shut-in’ gas from the Cambay reservoir, until now producing only 40-80 b/d crude.

By using multi-stage fracture stimulation through horizontal wells, says Oilex, “it’s not uncommon to see a ten-fold increase in production.” Taking its cue from Cairn, which increased gas production from a prospect in Rajasthan using advanced shale gas technology, Oilex is confident it can get similar success at Cambay.

Thirty six wells have been drilled at Cambay, mostly by ONGC and a few by previous operator Niko.