In this episode of the Oil 101 podcast series, we will briefly discuss the key differences between conventional and unconventional resources as they pertain to oil and gas drilling and production.

In this 3.5-minute podcast, we will discuss:

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There are two fundamentally different types of hydrocarbon resources: conventional and unconventional.  Each type affects the exploration approach, drilling methods and commercial development strategy.

A conventional oil & gas resource is found in those reservoirs where the hydrocarbon is recovered through classic exploration techniques and vertical or deviated wellbores.

Most conventional hydrocarbon reservoirs have defined geological limits, with classic characteristics such as a source rock, seals,  salt domes, traps and cap rock.  These reservoirs are grouped by E&P companies into plays or discrete fields as development is anticipated and managed.

For conventional resources, the key economic driver is the exploration well or wildcat success.  This well is drilled, logged, and maybe cored, and well productivity is then fairly easy to establish using conventional logging and evaluation techniques.

The major economic uncertainty is associated with the size and productivity of the overall reservoir.

Unconventional resources are controlled by wide regional geology, not a local reservoir.  This leads to accumulations that cover huge areas often with poorly defined limits.  In unconventionals, the word field is used more often to mean an administrative unit.

For unconventional resources such as shale oil, shale gas, oil sands, bitumen and coalbed methane, the priorities relative to conventional E&P are reversed. Typically, you know where all the hydrocarbons are located. The key to success is whether they can actually be economically produced, or brought to the surface.

Here, exploration is more like development and may require years of detailed geologic studies, great expense for numerous delineation wells, and long periods of testing called pilot projects.

Unconventional deposits require different and much more complex and costly production methods. Further, unconventional oil, especially from oil sands, may need additional upgrading to be usable as a refinery feedstock.

In summary, unconventional resources are more capital intensive (for development, production, and upgrading) than conventional ones.  Future prospects for unconventional resources depend on the crude and natural gas price and the investment cost and technology needed to convert them into commercially usable reserves.

The total amount of unconventional oil and gas resources in the world considerably exceeds the amount of conventional reserves. BUT will not be developed unless the price is right.

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What is Petroleum?

What is the difference between Upstream and Downstream?

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Oil 101

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