In a presentation in late January in downtown Houston, ConocoPhillips CTO Gregory Leveille offered a bit of a history lesson on the perception of North America as an oil producer.

Leveille explained how since the dawn of oil and gas production in America in 1859 and throughout the next century or so, oil production experienced a steady, continuous growth, peaking in 1970 with more than 10 MMbbl/d having been produced. During the next third of a century, Leveille said American oil production began a steady decline, despite operators venturing into large offshore fields and Alaska.

“Nobody expected oil production in America to ever rise again,” he said.

Leveille said the U.S. government at the time began to insulate the country from falling oil prices by, for instance, turning to biofuels. But he said the world turned out very different.

“We are now producing again about what we were producing in 1970,” Leveille said. “And that surge in production is coming from the unconventional reservoirs in the Eagle Ford, the Bakken and the Permian Basin, and a few other areas.”

In its Short-term Energy Outlook released in March, the U.S. Energy Information Administration predicted average oil production in America will surpass 10.6 MMbbl/d by the end of the year, bypassing the mark set in 1970.

“There’s been an incredible change in a relatively short period of time,” Leveille said.

The primary driver behind the exponential increase in production has been the development of unconventional reservoirs—but even more specifically, advances in completions designs, he said.

“What you’re seeing is the industry moving away from 3,000-ft [914-m], 4,000-ft [1,219-m] and 5,000-ft-long [1,524-m-long] laterals to laterals that are 7,500 ft [2,286 m] and 10,000 ft long [3,048 m],” he said. “There are people testing out 16,000 ft [4,877 m]. And these wells become more and more profitable as you do that, so if you put a 16,000-ft lateral it’s getting almost three times as much production as a well that’s 5,000 ft.”

In addition to longer laterals, Leveille said production increases in unconventional reservoirs also are attributed to multilateral and stacked play completion designs. In the Eagle Ford, for example, ConocoPhillips has evolved from completing two wells in the Lower Eagle Ford in 2012 to a stacked design with up to 10 wells in the Austin Chalk, Upper Eagle Ford and Lower Eagle Ford in 2017.

According to Leveille, six years ago it was common for wells to have about 70 fracture clusters in a completion design while today’s completions often feature more than 300 clusters, all of which have led to higher recovery per acre and higher well production across the country.

“Today, America produces around 25 million barrels of oil equivalent, or about one out of every six barrels of oil equivalent produced on the planet,” he said. “We’re ahead of Russia and ahead of Saudi Arabia. There are three countries that produce between 5 million and 10 million barrels of oil equivalent per day, and then every other country on the planet produces less than 5 million barrels of oil equivalent per day.”

Without unconventionals the U.S. would be producing about half of what it is today and countries like Russia would be way ahead in terms of production, Leveille said.

“The work that has been done by our industry has changed the fate of America,” he said. “Many people thought America was about to fade away in the 21st century. You hear talk about how America’s century was the 20th century. The 21st century will be China’s or somebody else’s. What our industry is doing is creating the possibility of America being a superpower for a much, much longer time to come.”

Worldwide production

While ConocoPhillips, along with a multitude of other producers, has found enormous success in North American unconventional production, the company has continued to weather the storm of the industry downturn while securing its place for the future.

During its year-end 2017 investor report, the company announced a $5.5 billion capital plan for the year, not including a recent $400 million bolt-on acquisition in Alaska. Its full-year 2018 production is expected to be 1,195 MMboe/d to 1,235 MMboe/d.

In February the company announced the transaction of the acreage in the Western North Slope of Alaska, acquiring Anadarko Petroleum Corp.’s 22% nonoperating interest as well as its interest in the Alpine Pipeline. According to ConocoPhillips, the gross production from these assets was 63 Mboe/d. ConocoPhillips now has a 100% interest in about 1.2 million acres of exploration and development lands in Alaska, including the Willow discovery.

The company’s 2017 production in Alaska was 167 Mboe/d. At Kurparuk ConocoPhillips has implemented a managed pressure drilling (MPD) program that has resulted in a more than 40% increase in lateral lengths, with lengths reaching more than 8,543 m (28,028 ft), a record for a conventional horizontal well in Alaska, according to the company. Two recent Kurparuk wells drilled with MPD recorded IPs of more than 10 Mbbl/d, a record for highest IP in the state, according to the Alaska Oil and Gas Conservation Commission.

In 2017 ConocoPhillips initiated the process of decommissioning four aging platforms at its Ekofisk Field. The company applied to the country’s regulatory agency to begin decommissioning its Ekofisk 2/4A, 2/4H, 2/4FTP and 2/4Q platforms. Ekofisk was the first oil field to begin producing in Norway and has been producing since 1971. The four platforms up for decommissioning ceased production in 2013.

ConocoPhillips was awarded six production licenses in 2016 for the Norwegian Continental Shelf, three of which as an operator. Much of the infrastructure existing in the North Sea could lead to more efficient operations in the Ekofisk, Judy and Britannia fields as well as Tor II and Eldfisk North, the company reported in a 2018 investor presentation.

Between 2014 and 2016, ConocoPhillips’ cost per well in Norway decreased by 40%, but its net liquids production decreased in Europe by 4% during that period, from 134 Mbbl/d in 2014 to 127 Mbbl/d in 2016, according to ConocoPhillips and Barclays. The company’s total increased in 2017 to 134 Mboe/d. ConocoPhillips also saw production growth in Libya increasing from 2 Mboe/d in 2016 to 21 Mboe/d in 2017 and in Europe and North Africa increasing from 205 Mboe/d in 2016 to 230 Mboe/d in 2017.

In its fourth-quarter 2017 earnings report, Conoco- Phillips predicted production growth for Asia-Pacific and the Middle East, Europe and Alaska for the second and third quarters of the year. Aiding in that expected turnaround will be first production from Bohai Phase 3 in China, Claire Ridge in the U.K., Aasta Hansteen in the North Sea and GMT-1 on Alaska’s North Slope.

According to its 2018 analyst presentation, Conoco- Phillips expects to add 90 Mboe/d in total production through 2025 from conventional, LNG and oil sands production from fields in Australia, Alaska, Asia-Pacific and the Middle East, and Europe. Expected increases could come from GMT-2, Fiord West and NEWS on Alaska’s North Slope; Ekofisk 2/4V-D, Eldfisk North and Clair South in the North Sea; Bohai Phase 4 in China; and the Barossa LNG field in Australia.

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