Key facts
- Chevron is licensing its proprietary chemical surfactants technology to rival oil producers.
- The technology aims to boost production from shale wells and reduce decline in existing ones.
- ZL Chemicals will be responsible for selling the technology to other oil companies.
- Chevron's technology has demonstrated potential to increase production by up to 20% in new wells.
- The company plans to test a new version of the chemical technology in the third quarter.
Chevron will allow rival oil producers to purchase a chemical technology it developed to enhance production from shale wells, as part of a broader effort to increase U.S. oil output. The technology, which involves chemical surfactants, is designed to reduce damage to shale formations and improve oil flow.
This initiative comes as the U.S. shale industry faces challenges with declining well productivity. Chevron stated that its chemical surfactants technology has improved production from newly drilled wells by up to 20% in the first year and reduced production decline in existing wells by 5% to 8%.
Chevron's Chief Technology and Engineering Officer, Ryder Booth, emphasized the global call for increased energy supply and highlighted this licensing as a way to meet that demand. The technology works by reducing damage to the shale formation and aiding the separation of oil from rock.
Industry experts note that the current oil recovery rate in shale is approximately 10%, with significant amounts of oil remaining in the ground due to technological limitations. Improving this recovery rate is crucial as the best drilling areas have been exploited over time.
Chevron will license its technology to chemicals manufacturer ZL Chemicals, which will manage the sales process to other oil companies. This move allows Chevron to benefit from increased oil production even in areas it does not directly operate, such as the Permian Basin. The company plans to begin testing a new version of the chemicals technology in the third quarter.