Chevron announced Wednesday that it will allow competing oil producers to purchase a specialized chemical technology the company developed to squeeze more oil out of shale wells, framing the decision as part of a larger effort to grow U.S. energy output.
The announcement arrives at a challenging moment for the American shale industry, which upended global energy markets roughly two decades ago through the fracking revolution. Today, that industry faces shrinking well productivity, a problem experts say is forcing companies to either drill more wells or embrace new technologies just to keep production steady.
Under the arrangement, Chevron will license its chemical surfactants technology to chemicals manufacturer ZL Chemicals, which will handle the sales process to other oil producers.
According to Chevron, the licensed chemicals have increased output from newly drilled shale wells by as much as 20% during the first year of production. They have also slowed the rate of decline in existing wells by between 5% and 8%.
Chevron’s Chief Technology and Engineering Officer Ryder Booth explained the reasoning behind the decision. “With constraints on energy in the world today, there’s a call on oil and gas companies to get more energy to market,” Booth said. “This is a way that we can answer the call to help boost production.”
The move follows recent pressure from U.S. President Donald Trump, who called on oil companies — including Chevron and ExxonMobil — to increase production and help drive down gasoline prices during the U.S.-Israeli war with Iran.
Chemical surfactants work by limiting damage to shale formations caused by the fracturing process. Acting much like soap, they flush out particles that become trapped in cracks within the rock and block oil flow. The chemicals then help separate oil from the surrounding underground rock, making it easier for the oil to travel to the surface.
During a recent tour of a Chevron technology lab in Houston, Reuters reporters watched researchers demonstrate the process using glass vials. In one vial of plain crude oil, the oil clung to the sides of the bottle when shaken. In a second vial containing both crude oil and the chemical surfactants, the oil moved freely without sticking and eventually separated cleanly from the chemicals — a visual illustration of how the technology helps oil break free from shale rock.
Industry experts point out that shale oil recovery rates currently sit at just 10%, meaning roughly 90% of the oil remains trapped underground because existing technology cannot yet extract it from the dense, compacted rock.
Improving that recovery rate has become increasingly urgent as the most productive drilling areas have been depleted over time.
“We’re at the point where big gains are not there anymore,” said Bob Fryklund, chief upstream strategist at S&P Global Energy. He did note, however, that ongoing technological advances have helped the oil industry regularly outperform projections.
Beyond its own drilling operations, Chevron also holds royalty interests in certain wells in the Permian Basin that are run by other companies. By licensing what was previously proprietary technology, Chevron stands to benefit financially from increased production across the country’s leading oilfield.
“This helps unlock production at a bigger scale beyond just the Chevron-operated areas,” Booth said.
Booth added that the company plans to begin testing a newer version of the chemical technology during the third quarter of this year.
