Every last drop of oil
New technology allows companies to get more oil out of places they gave up on before.
Sometimes it's not worth the effort to drill from tough zones, leading companies to abandon the sites altogether.
But new technology is overcoming those problems. That -- along with the high price of oil -- is spurring companies to return to difficult areas to attempt another extraction.
This could create new opportunities for oil companies -- and their investors. And it may lead to new interest in the stocks of firms that make these oil drilling technologies.
BusinessWeek has a nice roundup of new tools that oil companies are using to access reserves. They include:
- Drilling wells horizontally, and injecting steam to loosen up the oil.
- Adding heavy polymers to water and blasting it into a site. The polymers make the water heavier and increase the pressure.
- Injecting soap into the ground in an attempt to keep leftover oil from clinging to rocks.
Add those to more tried-and-true technologies, such as using three-dimensional scanning and simply improving pumps or drilling new wells, and we're already seeing some bumps in production.
And the industry is moving quickly in Iraq, BusinessWeek reports. The country has signed contracts with ExxonMobil (XOM), BP, Shell and Chinese and Russian companies.
"If all these ventures meet their targets, Iraq could produce as much as 12 million barrels a day, putting it in the super league with Saudi Arabia and Russia," writes Stanley Reed.
Armed with these new technologies, Shell thinks existing fields could give up some 300 billion barrels of oil -- including many barrels that companies had given up on, Reed writes.
"You will see companies going into the deep water, going into the arctic, using the best technology," said one Italian oil company executive.
These newfound reserves will add stability and supply, and the stocks that stand to benefit are the big producers, like Exxon and Royal Dutch Shell (RDS.B). Italy's ENI (E) is one to watch as well.
My colleague Jim Van Meerten recently wrote about Cameron International (CAM), which makes exploration equipment for oil fields. Cameron shares have been on a tear, hitting new highs.
I'd keep an eye on PetroBakken Energy (PBKEF), which is expecting to ramp to nearly 47,000 barrels of oil a day by the end of the year. That's up 25% from last month.
The Canadian oil company is adept at horizontal drilling technology, and will be using those tools to access reserves previously considered uneconomical, according to The Calgary Herald.
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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