Chevron has been a force in the oil and gas industry for more than a century and credits its innovative approaches to technology and operations for its ability to be a powerhouse. Asset optimization and fracking techniques—in the U.S. and abroad—are current drivers.

During the 2023 Unconventional Resource Technology Conference (URTeC), experts discussed Chevron’s regimented approaches to developing unconventional assets in order to safely deliver higher volumes with lower emissions.

As Nicole Champenoy, Chevron’s shale and tight asset class director said, thanks to its legacy acreage, “Chevron has had an enviable position in the Permian for decades.”

In 2008 and 2009, Chevron felt it had squeezed out all the oil it could and was on the verge of putting the field into retirement, Champenoy said. But in 2015, the tight oil boom with horizontal drilling was introduced, which cracked the fracs back open.

Chevron’s horizontal drilling development program began in 2015 in Argentina’s Vaca Muerta formation. In 2018, Chevron started developing Canada’s Kaybob Duvernay formation, which also uses horizontal wells.

Chevron takes an asset-class mindset toward its developments that prioritizes and executes work through strategic focus areas. Business unit aspirational targets and benchmarking inform asset-class priorities.

“You can do anything, but can’t do everything,” Champenoy said. “Prioritization is important to [an] asset-class mindset.”

This approach is evident in some of Chevron’s latest business operations. Between 2023 and 2027, Chevron expects to add 650,000 boe/d, with 450,000 boe/d of that production coming from the Permian Basin. In 2021, Chevron acquired Noble Energy, which further enhanced Chevron’s U.S. unconventional position with acreage in both the Denver-Julesburg (D-J) Basin and the Permian. Although the transaction has not yet closed, Chevron will acquire PDC Energy later this year, which will add more acreage to its portfolio in both of those key basins.

Chevron’s teams “look at other operators in the basin and try to leverage their success,” said Matthew Stillings, Chevron’s portfolio development manager in the Rockies business unit. There is no clear consensus on completion design, flowback, well spacing and landing strategy, so Chevron uses advanced modeling techniques to gain insight into other operators’ different development designs.

“A key strength of our modeling efforts is rapidly iterating data,” Stillings said. “We want to understand subsurface conditions and use that knowledge to optimize where we are in the basin. A key focus for our reservoir modeling is to inform predictions of production degradation.

“Both modeling and empirical data indicate larger frac designs and less well density results in strongest per-well performance,” he said.

Obstacles still at play

While Chevron uses integrated modeling to make more informed decisions when developing wells, issues may still come up that have caused Chevron to have to adjust development techniques.

“No oil and gas conversation is complete without discussing surface challenges,” Stillings said. “Oftentimes, they are the reason why we develop the way we do.”

One of the biggest issues that comes into play when fracking, especially in the Permian, is the amount of produced water that comes out with hydrocarbons, said Edgar Castro, water operations manager for Chevron.

The rise of unconventionals found high volumes of water with little oil and salinity over three or four times the salinity of seawater. On top of that, the number and magnitude of earthquakes also increased over time as a result of wastewater disposal. As fluid is injected, it reduces the effective stresses on lineaments, causing faults to move and in turn causing earthquakes.

“We’ve eliminated the use of freshwater in our fracs and doubled the amount of recycled water we used,” Castro said.

Roughly 99% of Chevron’s Permian Basin water demands were met using brackish or recycled water sources, he said. Chevron also reduced the volume of water sent to disposal wells in order to mitigate earthquakes. Once seen as an ESG fantasy, this beneficial reuse of produced water is now regularly employed by Chevron.

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