New technology in hand,
Exxon returns to old Texas field seeking more oil
Exxon Mobil Corp. intends to use new technology in a $340 million plan to wring the equivalent of another 40 million barrels of crude out of Texas' oldest oil fields.
Discovered in 1940 -- when Exxon was still known as Humble Oil -- the Hawkins Field, a major U.S. energy source during World War II, has produced more than 800 million barrels of crude. The field, which is about 100 miles east of Dallas, still has active wells, but production has slowed.
Exxon said this week that it hopes to add 25 years to the field's productive life by recovering and reinjecting nitrogen and other gases to force oil to the surface.
Exxon expects to begin building the recovery unit this quarter and start using it by late 2011. The construction effort is expected to employ about 300 people.
"We've been operating many, many fields for 60, 70 years. \u2026 That's a very long-held commitment to the state," said Stu Jeffries, Exxon's production manager for Texas.
New technology could help Exxon and its peers produce more oil and gas from existing fields, rather than spending even more money on new locations.
U.S. production manager Kok-Yew See said Exxon "is applying some of its most advanced technologies to mature oil and natural gas fields."
The company already injects nitrogen culled from the air into the Hawkins wells. But the nitrogen mixes with the natural gas, making it difficult and sometimes impossible to sell the gas.
Exxon plans to build a new facility to separate the nitrogen from the natural gas when it comes out of the well. Exxon could then sell more of the natural gas and reinject the nitrogen underground.
The $340 million investment in East Texas is small for Exxon, which spent
$26 billion on capital projects last year.
However, the Hawkins plans are significant compared with the $700 million Exxon has spent in Texas during the past three years.
Vinson & Elkins energy expert Steve Davis said the investment represents an experiment for Exxon.
If it works, the company can potentially apply the technology to other fields.
"This is $340 million. It's nothing to these guys," he said, but added: "Their investment criteria are so stringent, that I would think there's a high likelihood of success."
Material from The Associated Press and The Dallas Morning News.