Core Analysis

As part of drilling operations, geological and petrophysical information about subsurface formation is required to evaluate a reservoir. After samples of reservoir rock (core samples) have been collected, detailed analysis and study are conducted to understand a number of reservoir characteristics,

IMPORTANCE

LEVERAGE STRATEGIC ROUTINE BOTTLENECK

BUYER POWER

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WEAK

BUYER POWER

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BALANCED

BUYER POWER

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STRONG

Category Description Image

Category Description

As part of drilling operations, geological and petrophysical information about subsurface formation is required to evaluate a reservoir. After samples of reservoir rock (core samples) have been collected, detailed analysis and study are conducted to understand a number of reservoir characteristics, such as reservoir porosity (fluid-carrying capacity), permeability (the ability of fluids to flow), hydrocarbon and water saturation and many more. Analyzing cores can take up to 2 years and requires multidisciplinary skills set and experience, to provide accurate and detailed results.

Having this analysis, understanding and knowing reservoir properties is key to estimate hydrocarbon production and how variation in these properties will affect production and ultimate recovery. 

Core analysis consist of Routine Core Analysis and Special Core Analysis (SCAL)

Routine Core Analysis

  • Permeability (horizontal and vertical)
  • Porosity
  • Grain density
  • Fluid saturation
  • Lithological description
  • Gamma log 

Special Core Analysis (SCAL)
SCAL or SPCAN is a process of measuring and evaluating cores with mode advanced experiments, such as Electrical Properties, Capillary Pressure, Wettability, and Flow Tests. The process differs from lab to lab, hence ensuring that data from each lab is consistent in vital. SCAL is a very subjective process, as such third party expertise and recommendation is required to ensure that the interpretation of cores is accurate and unbiased. API RP40 document provides recommended practices for SCAL.

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Supply & Demand Dynamics

Demand
Demand for core analysis is driven by exploration and appraisal activities around the world and to a small extent by field re-development.  Around 95% of core analysis services are required during exploration/appraisal activities. Due to limited exploration activities in GCC, the current oil price environment, the demand for core analysis is very low globally.

In addition, GCC represents the smallest proportion in this segment, due to major discoveries being made in the last century. Due to the latest awards of an onshore exploration block in UAE, the demand for core analysis in UAE may increase, once drilling commences in the nearest time.

 

 

Supply 
The supply of core analysis services includes personnel and laboratory equipment. As a result of the complexity of core analysis, knowledge of reservoirs and laboratory QA/QC procedures are of utmost importance to ensure accurate and detailed analysis. Due to cyclical nature of this segment, service providers try to keep capacities balanced and in times of high demand, there is always a significant lead-time to book a slot for analysis.

At this point of time we do not expect Q3 and Q4 2020 to be busy.


Intertek, Core Lab and ALS have been market leaders for years. There are a number of other players available with various specialized expertise and geographic locations, such as below. A general trend in this segment is services providers try to go away from volatile and cyclical exploration related activities to production management and production enhancement.

  1. Intertek
  2. Core Lab 
  3. ALS
  4. Schlumberger
  5. Stratum Reservoir
  6. KTIB Holding
  7. PanTerra

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Cost & Price Analysis

Price Analysis

As a result of the industry downturn, prices for core analysis have been showing a downward trend on a global basis. This segment is highly cyclical on the demand side, as such service providers try to keep the capacity balanced and in times of high demand, prices are going up. In addition, due call-out nature of the coring services, fixed costs are high, which in turn leads to opportunistic pricing strategies by suppliers and high-profit margins.

  1. Margins under pressure
  2. Due to high completion and low demand prices are expected to show a downward trend or stay at current reduced levels in the next 6 months (Q1 2021).

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Total Cost of Ownership

Experience, track record and reputation of a core analysis laboratory, probably the most important factor and far outweighs the costs. 

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