In the ever-evolving landscape of oil and gas, Occidental Petroleum (Oxy) continues to set itself apart as a pioneer in unconventional resource development. Through its strategic focus on secondary bench development, Oxy is maximizing resource recovery, extending the economic life of its assets, and pushing the boundaries of operational efficiency in U.S. shale plays. This approach exemplifies how advanced technology and innovative workflows are shaping the future of energy production.
What is Secondary Bench Development?
Secondary bench development involves targeting additional layers—or “benches”—within a larger geological formation, often above or below the primary producing zone. These benches are typically developed later in the lifecycle of a field and often require advanced drilling and completion techniques to unlock their full potential.
For years, operators have concentrated on primary benches due to their superior reservoir quality and lower cost of development. However, companies like Oxy are rewriting the playbook by turning secondary benches into top-performing assets, showcasing how innovation can unlock value from underutilized reserves.
Oxy’s Breakthrough in Secondary Bench Development
Oxy’s success in secondary bench development is underpinned by its proprietary subsurface workflows and decades of geological expertise. Here’s how the company is leading the way:
1. Strategic Use of Existing Infrastructure
Oxy emphasizes leveraging existing surface and subsurface infrastructure to enhance project returns. By doing so, the company reduces capital costs while improving efficiency. This approach has allowed Oxy to unlock significant value from secondary benches, often achieving returns that rival—or even exceed—those of primary benches.
2. Enhanced Well Productivity
Through its innovative workflows, Oxy has consistently improved well productivity. In fact, the company has achieved productivity gains in seven of the last eight years in the Permian Basin. First-year cumulative production from Oxy’s secondary wells now surpasses the Delaware Basin industry average for all horizontal wells by more than 30%, a testament to the company’s technical prowess.
3. Proprietary Subsurface Modeling
Oxy’s proprietary modeling tools allow it to evaluate secondary benches with precision, identifying zones with the highest potential. This has led to the reclassification of several secondary benches as top-tier performers, significantly expanding Oxy’s inventory of tier-one locations.
Why Secondary Bench Development Matters
The economic and operational implications of secondary bench development are profound. For Oxy, it’s not just about extracting more hydrocarbons; it’s about doing so in a way that maximizes value and minimizes waste.
1. Extending Inventory and Reserves
By tapping into secondary benches, Oxy has extended its tier-one inventory, ensuring a robust pipeline of development opportunities. In 2023, this approach contributed to a U.S. organic reserves replacement ratio of 212%, reflecting the company’s ability to replenish its reserves far beyond its production levels.
2. Boosting Financial Returns
Secondary bench development often delivers stronger financial returns due to the utilization of pre-existing infrastructure. For Oxy, this translates into higher capital efficiency and reduced time to market for new wells.
3. Strengthening ESG Commitments
By optimizing resource recovery and extending the life of existing assets, Oxy minimizes the need for new infrastructure, reducing its environmental footprint. This aligns with the company’s broader environmental, social, and governance (ESG) goals.
The Broader Industry Context
Oxy’s advancements come at a pivotal time for the energy industry. With growing demand for oil and gas, coupled with the need for sustainable practices, operators are under pressure to extract more value from existing resources. Secondary bench development offers a pathway to meet these challenges, and Oxy is leading the charge.
In the Permian Basin, for example, secondary bench development has become a key growth driver. The Wolfcamp formation, with its multiple productive benches, exemplifies the untapped potential of these layers. By applying cutting-edge technologies like horizontal drilling, hydraulic fracturing, and geochemical analysis, Oxy is unlocking reserves that were once deemed uneconomical.
The Road Ahead for Occidental Petroleum
As Oxy continues to refine its approach to secondary bench development, the company is well-positioned to maintain its leadership in the U.S. shale sector. The combination of proprietary workflows, operational efficiency, and a focus on maximizing returns sets Oxy apart as a trailblazer in unconventional resource development.
Through its innovations, Oxy is not only reshaping its own future but also setting a benchmark for the industry. Secondary bench development is more than just a technical achievement; it’s a strategy that aligns with the energy sector’s dual goals of economic growth and environmental stewardship.
Conclusion Occidental Petroleum’s focus on secondary bench development highlights the power of innovation in the oil and gas industry. By unlocking the potential of previously overlooked reserves, Oxy is driving operational excellence, enhancing financial returns, and supporting sustainable development. As the company continues to push the boundaries of what’s possible, it stands as a model for how technology and strategy can transform the future of energy production.
