& GAS EXPLORATION AND PRODUCTION
Oil and gas continue to dominate global energy consumption due to their unmatched versatility, reliability, and existing
infrastructure. These fossil fuels serve as the backbone of transportation, powering the majority of vehicles, ships, and aircraft
worldwide. Beyond mobility, oil and gas are deeply embedded in industrial processes, electricity generation, and heating, making
them essential for economic activity and everyday life. Their role extends into the production of a wide array of materials and
goods, including plastics, fertilizers, and chemicals, which are fundamental to modern manufacturing and agriculture. Despite the
growing emphasis on renewable energy, the transition remains gradual, and oil and gas maintain a stronghold due to their ability
to deliver consistent, high-density energy around the clock. The global energy system, built over decades around fossil fuels,
continues to rely on them to meet rising demand, especially in developing regions where energy needs are expanding rapidly. This
entrenched dependence ensures oil and gas remain central to the global energy mix for the foreseeable future.
The Goldman Sachs Research projects that global oil demand will continue to rise until at least 2034, primarily due to weak
electric vehicle (EV) adoption and rising incomes, particularly in emerging Asian markets. Unlike some forecasts that see oil
demand peaking by 2030, Goldman anticipates a slower and more prolonged transition. Demand is expected to plateau after
reaching its peak rather than sharply decline, with consumption potentially reaching 110 million barrels per day by 2034 — or even
up to 113 million barrels by 2040 if EV growth remains sluggish. This sustained demand is driven less by gasoline and more by petrochemicals, jet fuel, and diesel. Petrochemicals, used in
everything from plastics to cleaning products, will see growing demand even as gasoline consumption starts to decline around
2028. Similarly, diesel demand is expected to peak in 2034, as heavy-duty vehicle electrification remains technically and economically challenging. Jet fuel consumption will likely grow until 2040, fuelled by rising global incomes and increasing air
travel, particularly in China. The slow EV rollout—affected by policy uncertainty, infrastructure gaps, and affordability issues—
delays the shift away from fossil fuels.
This prolonged demand growth for oil, alongside decarbonization technologies not yet
scaling fast enough, will likely extend the life cycle of fossil fuel dependency. As a result, this outlook signals a clear opportunity
and necessity for increased oil and gas production and exploration. Companies are expected to respond to sustained demand
with more upstream investments, even as capital expenditure in the sector has been tightening. If demand continues to rise while
supply capacity remains limited due to underinvestment, it could lead to significant supply shortages in the medium term,
encouraging new exploration initiatives. According to the IEA, global oil demand is still projected to grow by 720,000 barrels per day in 2025 and 740,000 in 2026, despite
some temporary weakness in the U.S. and Chinese markets. In parallel, global oil supply is expected to increase by 1.8 million
barrels per day in 2025 and 1.1 million barrels in 2026, led mostly by non-OPEC+ countries. Refinery throughput is also set to rise
steadily, suggesting increasing preparation to meet future demand.
Although recent oil prices have fluctuated due to geopolitical
tensions and changing OPEC+ strategies, the broader trend points toward tighter balances and higher prices — reinforcing the
incentive to boost exploration and production. Ultimately, the extended timeline for peak oil demand, combined with continuing
growth in sectors like petrochemicals and aviation, underscores the need for expanded oil and gas operations. Energy companies
and producers will likely ramp up exploration efforts and increase capacity investments to meet the long-term energy needs of a
still-growing global economy. With global oil demand projected to rise through at least 2034 and remain elevated for several years thereafter, oil companies will
be compelled to keep existing wells productive for longer durations. This will drive a growing need for advanced well surveillance,
diagnostics, and optimization to maximize recovery and operational efficiency. Well tracer services—utilizing both chemical and
radioactive tracers—play a critical role in this process by enabling operators to track fluid flow paths, identify production
inefficiencies, detect water breakthrough and inter-zonal crossflow, and verify zonal isolation. As operators look to boost output
from aging wells without resorting to costly re-drilling, tracer technologies provide a valuable, cost-effective means of optimizing
performance and extending well life.
In a market where capital spending remains constrained, despite growing demand, energy
companies are increasingly prioritizing data-driven, efficient recovery methods over large-scale new developments. Tracer-based
diagnostics offer a low-cost yet highly detailed understanding of well behaviour, often without the need for invasive interventions
like full workovers or shut-ins. By pinpointing productive zones or problem areas within a well, these tools support more targeted
and efficient interventions such as re-perforation, zonal shutoff, or stimulation treatments. Tracer technology has emerged as a critical tool for enhancing reservoir surveillance in the oil and gas industry. It provides
engineers with the ability to gain deeper insights into subsurface dynamics that are otherwise difficult to observe directly. By
introducing specially designed tracer materials into the reservoir—whether during drilling, completion, or production phases—
engineers can monitor and interpret the flow of fluids and assess reservoir characteristics with improved accuracy. Tracers help
define how fluids move through a reservoir by clearly mapping flow pathways and connectivity between wellbores. This makes it possible to identify planned and unintentional communication between wells, detect fluid diversion, and estimate the distribution
of oil, gas, and water. These insights are crucial for evaluating reservoir performance and formulating strategies to improve
hydrocarbon recovery.
Tracers are especially valuable in understanding how injected fluids—such as water, gas, or chemicals—
interact with the formation and migrate through it over time. One of the major strengths of tracer technology lies in its flexibility
and adaptability. Different types of tracers—chemical, radioactive, or nano-based—can be selected depending on survey
objectives, environmental considerations, cost constraints, and operational conditions. Water and gas tracers can be formulated
with unique chemical identifiers that allow each injection point or stage to be independently tracked, helping engineers
distinguish between different flow paths and analyse multi-zone or multi-well interactions. For example, gas tracers with low
natural abundance are highly detectable and environmentally safe, while water tracers like fluorinated benzoic acids (FBA) are
easily analysed using advanced techniques such as gas chromatography. Tracers also support a wide range of applications across the reservoir lifecycle. They can help monitor mud circulation and
infiltration during drilling, detect casing leaks, track chemical reactions in the wellbore, assess the effectiveness of hydraulic
fracturing, and monitor fluid behaviours during production and enhanced oil recovery (EOR) operations.
In unconventional wells,
tracers injected along specific intervals of the wellbore provide a powerful way to validate or challenge assumptions about
reservoir performance, fracture networks, and fluid movement. The ability to gather this type of detailed subsurface data without
halting production or using invasive methods makes tracers an efficient and economical diagnostic solution. Tracer surveys
further enable engineers to make strategic operational decisions. For instance, they can reveal fracture geometries by measuring
how tracers disperse from a central well over time. They can help optimize waterflooding programs by showing how injected
water or gas moves through the reservoir. Tracer results can also highlight sweep inefficiencies, allowing operators to reconfigure
injection patterns for better reservoir coverage. Moreover, radioactive tracers can be used to determine if neighbouring wells
intersect the same fracture system, providing crucial information for well placement and spacing. Another significant benefit of tracer technology is its contribution to understanding time-dependent reservoir behaviours. By
observing how long it takes tracers to travel between injection and production wells, engineers can infer flow velocities and
sweep areas, improving the accuracy of reservoir models.
Tracers also help track changes in fluid migration patterns over time,
which is essential for refining injection rates and improving recovery efficiency. Despite their value, tracer data is often underutilized because it's not integrated with other reservoir data. When kept in isolation—
such as in standalone spreadsheets—tracer results lose much of their interpretive power. However, when visualized in conjunction
with geological models, pressure data, seismic surveys, and production trends, tracer information becomes far more actionable. Integrating tracer data with broader reservoir datasets allows engineers to identify correlations and anomalies, enhancing their
understanding of reservoir behaviours and guiding smarter field development decisions. The tracer technology greatly enriches
reservoir surveillance by providing direct, dynamic information on fluid movement, zone contribution, and reservoir connectivity. Its versatility across various reservoir conditions and life stages, along with ongoing advancements in tracer chemistry and
detection methods, make it an indispensable part of a reservoir en ineer’s toolkit. By integrating tracer insights with other data sources, operators can unlock more accurate models, optimize production strategies, and ultimately increase hydrocarbon
recovery while minimizing operational risk.
