Focus on China
TOGY talks to Pan Weiguo, Dano (Beijing) Oilfield Services (Dano Oil) chairman about the efficacy of the company’s technology in maximising oil output and minimising operating costs and environmental damage. Since its foundation, the company has focused on working out integrated solutions for oil and natural gas producers, by providing professional services and specialised equipment and materials.
What is the development history of Dano (Beijing) Oilfield Services? And what are some of the technologies that you provide?
I started my business in 2010 when the oil market was booming. The oil industry generally was proactive about the extraction of unconventional oil resources, such as tight oil and shale gas. The principal E&P approach is horizontal drilling and hydraulic fracturing, which both require higher cementing quality. In view of the rapidly growing market, Dano invested its main resources in the R&D of cementing technology in the start-up stage. The results were satisfying. Our technology was recognised by Petrochina, Sinopec, CNOOC and Yanchang Petroleum – the major oil producers in China. During this initial period, we built long-term relationships with clients as well as brand awareness.
Given the success, we decided to expand the business by means of co-operation with the world’s leading oilfield service companies, such as Schlumberger, Baker Hughes, and Weatherford. The pattern was that Dano took advantage of the understanding of the market while these big firms offered proprietary technology and products. By working together, we were impressed by their sophisticated technology and the pursuit of innovation. A commitment to technology innovation is what we learned from the experience.
In the second half of 2014, the oil price began to plunge. Accordingly, the market of exploiting-related services has declined sharply since then. Therefore, we narrowed our business and placed emphasis on seeking methods of enhancing oil recovery (EOR) for high water-cut oilfields, through enlarging swept volume of oil reserves.
What other technologies are you developing?
Based on our EOR technology, the R&D group has devoted time to developing a treatment of the waste drilling mud and oily sludge since last year. We believe that the technology will have a promising future since it has both economic and environmental advantages.
Could you elaborate on your oily sludge treatment technology?
We re-inject the oily sludge pretreated by our innovative method into the “mined-out areas” of oil reserves and it would solidify underground.
Are you planning to promote your technology on a global level?
At present, we focus on China as we are more familiar with the market. Moreover, both the complicated attributes of the oil reservoirs and the new implementation of environmental regulation in China make our technology greatly appealing to the Chinese oil producers. Part of our strategy for next five years is to promote the adoption of our technology worldwide, especially in areas that are politically stable and economically healthy.
How would you increase the adoption of your technology in the Chinese market?
We choose to conduct pilot projects in Daqing Oilfield, in consideration of the fact that this old oilfield has the urgent need for good-performing EOR methods. After the first decade of development, Daqing Oilfield entered the secondary and tertiary recovery, and became the first in the world that encountered the high water-cut problem. Hence, Daqing Oilfield has a strong motive to reduce the water-oil ratio in order to maintain production target.
Therefore, once our trials succeeded in Daqing, due to the field’s exemplary role, our technology would have the great chance to get access to the other oilfields in China, even in the world.
What are the advantages to operators of a comprehensive method of treating oily sludge in a low oil price environment?
The traditional treatment methods are thermal treatment, hydro-cleaning treatment, biodegradation, extraction, separation, and combustion, for example. These alternatives all deal with the waste at a considerable cost. By contrast, our method is able to perform the permanent disposal of oily sludge in a cost-efficient way, through reducing the use of energy, water, chemicals and bio-chemcials. As a result, oil operators would lower production cost if they apply our technology.
How can the application of Dano Oil’s technologies be utilised to lower operator’s costs?
First, as an effective EOR method, [the technology’s] proper and thorough application would result in the extension of the oilfield’s lifetime and the increase of gross output. In other words, the overall cost could be reduced under the same conditions. Then, because our technologies are efficient at enlarging the volume of oil reserves, oil producers could expect to see the improvement of productivity and production in addition to cost savings. Last but not least, they could also decrease environmental expenses by adopting our technologies.
What does the technology do to address the third problem that you mentioned: minimising environmental damage?
Our treatment method is a permanent solution to the oily sludge problem. The solidified oily sludge is in a stable state, unlike fluid mixture, it would never resurface to the ground.