Kemp: BP Acknowledges US Shale Is Different

Shale Is Different

In the rest of the world, and even in offshore areas of the of the United States, BP has to negotiate for production rights with a single mineral owner, usually the government.

But onshore in the Lower 48 states BP must strike agreements with a plethora of private landowners.

Offshore, BP is hunting through large volumes of rock for a small number of very large oil and gas accumulations, and needs to a carefully target a small number of wells so that each will yield enormous quantities of petroleum.

In onshore shale plays, the oil and gas are much more widely distributed, and the aim is to identify the most productive areas and saturate them with tightly spaced wells.

Offshore wells are expensive to drill and present tough engineering challenges.

Onshore wells are simpler and cheaper, but with so many needed and each one yielding less oil, it becomes essential to control costs tightly.

Developing an offshore oil field is an engineering challenge similar to designing and building a high-performance sports car.