Transcript Slide 1

EOR: Promesa Incumplida o
un Gran Futuro?
Fernando Cabrera
Eduardo Manrique
Neuquén
Nov. 5, 2010
Waiting for the EOR Boom:
What Happen in the Mean Time
• EOR potential has been predicted over the past three decades
• After crude oil price collapse in mid 80s, EOR activity slow down
drastically
• Majors decided shut-down research centers and number of students
enrolled in reservoir/petroleum engineering and in geoscience also
dropped in Universities
• Since 2007 EOR activity start showing a growing trend having Canada,
China and the U.S. as the countries with the largest EOR production
• CO2 EOR/storage started to get lot of attention due to new environmental
regulations
• Lack of expertise and prepared work force is one of the key factors
constraining EOR evaluation and implementation
• EOR offshore is still at early stages of evaluation (will require 1 to 2
decades if EOR becomes economically attractive)
EOR projects in the U.S. & Average
World Crude Oil Price
Source: Oil & Gas Journal
Evolution of EOR
projects in the U.S.
(1976-2010)
Source: U.S. Department of Energy
Historical world average
crude oil price
(1980-2009)
Worldwide Oil and EOR Production
(billion barrels)
World Oil Production
• Gas and thermal methods
represents 60-70% of
worldwide EOR production
• Chemical flooding
represents up to 27% of
total EOR production
World EOR Production
SOURCE: Department of Energy, U.S.
Energy Information Administration. Calculated
and estimated by SBI Energy, April 2010
Percentage of EOR Production by
Country in 2009 (≈ 1.1 Billion bbl)
SOURCE: Industry Sources. Calculated and estimated by SBI Energy
EOR Market Value
EOR Market Value
(2005-2009)
• The EOR market value rose
from over $3.1 billion in 2005 to
almost $62.5 billion in 2009
• Drop observed in 2009 is not
related to EOR production
decrease but an approximate
$30 per barrel drop in oil prices
One of Multiple New
EOR Predictions
7
Projected EOR Potential:
2009 - 2015
• Market study in 1998 total EOR
production was estimated in 1
Billion barrels by 2005 (Fredonia)
• Recent market study for EOR
predicts a steady increase in world
oil production based on energy
demand and economic growth of
China, India, Russia and the U.S.
(SBI Energy 2010)
Projected Total Oil Production
(Billion Barrels)
Projected EOR Oil Production
(Billion Barrels)
• World EOR production was
forecasted in approx. 12 billion
barrels by 2015
• EOR market value was projected to
reach $US 1.3 Trillion by 2015
SOURCE: Industry Sources. Calculated and estimated by SBI Energy
EOR Projected Market Growth Based
on Oil Price Per Barrel
Average
Price
$US/bbl
Low
55
Reference
92
High
115
SOURCE: Department of Energy, U.S. Energy Information Administration and industry
sources. Calculated and estimated by SBI Energy.
Projected EOR Worldwide Market Share
of Production by 2015 (≈ 12 Billion bbl)
SOURCE: Industry Sources. Calculated and estimated by SBI Energy
Two EOR Cases:
CO2 vs. HPAI
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Trend of CO2 Floods and Oil Prices in
the U.S.
Sources: O&G Journal and EIA
North American CO2 Sources and EOR
Areas (Most from Natural Sources!)
North American CO2 Source Deliveries
for Enhanced Oil Recovery Q4 2006
Average CO2 Capture Cost by Source
Source: Industry Sources. Calculated and estimated by SBI Energy, April 2010
Example of CO2 Flood Costs and
Incomes (EOR / Storage)
€ 9.75/tCO2 - 02 Feb. 09
€ 15.34/tCO2 - 21 Aug. 09
€ 14.38/tCO2 – 4 Nov. 10
$40/bbl - 02 Feb. 09
$74/bbl - 21 Aug. 09
$86/bbl – 4 Nov. 10
Costs
Include compression costs
Potential
incomes to
offset CCS
costs
Example of CO2 Purchase/Recycle in a
Large CO2-EOR Project
CO2 recycling limit storage potential of oil reservoirs
(Economic limit of EOR projects). CO2 storage is
also limited by the reservoir storage capacity.
180
160
140
MMCFD
120
100
Gas Production
CO2 Purchase
Recycle Capacity
80
60
CO2 purchase
decreases with time in
EOR projects
(Economics).
40
20
0
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
Courtesy of Ron Wackowski, 1997
HPAI vs. CO2 in Northern U.S.
Weyburn
Ongoing HPAI
projects in MT,
ND & SD
205 miles
Great Plains
Synfuels
Plant
120 – 170 miles
Sources: NatCarb and Dakota Gasification Company
Trend of Air Injection Projects:
Carbonate and Sandstone Fm.
Sources: O&G Journal 1990 - 2010
Cedar Hills Project, North Dakota
Why High Pressure Air Injection (HPAI)?
• Low primary recovery ~ 8%
• Fluid expansion and rock compaction are main
driving mechanisms
• Low permeability ~ 3 md (Dolomitic Reservoir)
• High Initial water saturation ~ 35%
• Deep reservoir ~ 9,000 ft
• High temperature ~ 225° F
• No access to cheap CO2
• Natural Gas for markets
Cedar Hills Project, North Dakota
HPAI Modeling:
 100 sections
 API gravity ~30, sweet crude
 Carbonate Formation, 8500’ TVD
 4 feet Upper, 5 feet Lower
 Primary recovery from rock & fluid expansion
 GOR ~ 350 SCF/STB
Cedar Hills Project, North Dakota
Field Development
•
•
•
Initial (1995 – 1998)
• Open-hole horizontal well completion
• 640 acre well spacing – 84 producers
• Primary Recovery
Subsequent (2001 – 2004)
• Infill drilling of injection wells
• 320 acre well spacing – 84 producers; 66 injectors; 150 total
• High Pressure Air Injection (HPAI)
• Water injection along unit boundary
Current Plan (2005 – 2009)
• Three drilling rigs active
• 28 horizontal extensions
• 109 new horizontal infill wells
• 160 acre well spacing development
• Hybrid air and water injection
Cedar Hills Project, North Dakota:
Historical Oil Rate & Well Count
Cedar Hills Project, North Dakota:
Prediction Capability
Challenges & Opportunities
• Chemical flooding seems to be the most feasible EOR method for
Argentinean reservoirs. Combined with waterflooding optimization these
strategies can be implemented in a reasonable period of time
• Develop an inventory of CO2 sources in Argentina and evaluate its
distance to oil reservoirs candidates for this EOR method
- CO2 availability may arrive to late (depleted an watered out
reservoirs) making difficult project economics
- CO2 volumes required in EOR projects are small compared to CO2
volumes emitted by power plants. The economics of CO2 - EOR are
based on CO2 purchase / recycle strategies
• If EOR expansion is materialized , staffing and availability of large
volume of chemicals, among others, may represent key challenges for
large scale applications
• Is HPAI and other thermal methods viable in Argentina?