Abstract
Shale gas development is characterized by a composite of several experience curves in terms of operations, resource assessment and infrastructure development. More specifically, the learning curve for the operator grows as operational characteristics are fine-tuned, such as experience ramp-up, logistics and supply chain optimization, and factory-style operations. Technical understanding of the basin then grows as operators learn how to design and execute the most suitable horizontal well trajectory; how best to land the lateral section in the pay zone; where to perforate the formation; how to optimize perforated sections, and the number and size of frac stages; and where the sweet spot is located relative to asset sections with marginal economics. Supporting infrastructure must grow in pace with development growth, which is also influenced by the fine tuning of supporting policy and regulations, resulting wellhead costs and market factors. Each phase is characterized by associated costs and uncertainties.
A field-wide shale gas economic model was applied as an extension of the original single-well economic model, which captures the various phases of unconventional resource development. The base model was tested against North American shale basins; fundamentals of the same model were adjusted to assess unconventional development in the Middle East, and specifically calibrated to analyze field development in the Qusaiba shale in Saudi Arabia.
Model results for Saudi Arabia shed light on the commercial feasibility of shale gas development in the country, along with operational constraints and limitations. While broad findings apply to the Middle East as a whole, country-specific modeling reveals specific operational issues that must be addressed in the course of development of unconventional resources in the region.
