Carbon Dioxide Enhanced Oil Recovery (CO2-EOR) is gaining more traction around the world, not only because of its favourable economics but also as part of sustainable practices, as well as preserving natural gas currently used for gas injection, for power generation purposes. Until recently, in any CO2 EOR project naturally occurring CO2 was used. However, with modern carbon-capturing and storage (CCS) technologies, whereby CO2 generated by the power industry and other energy-intensive manufacturing, such as steel and aluminium, is captured, stored and can be used.
The principle of CO2 EOR is common to many other ways of secondary and primary recovery methods. CO2 is injected into a reservoir to space between the rocks to push the oil out. One of the technical reasons why injecting CO2 is beneficial is due to its ability to mix with oil, also known as miscible with oil. Why it is required? Oil and water cannot be mixed into a homogeneous liquid, which in turn makes it less effective when water is used to push the oil. However, if the injection material (CO2) is miscible with the oil, it will become a homogenous mixture that will allow the forces of injected CO2 to be used effectively in "detaching" the oil from the rock and moving it more easily towards a producing well. The miscibility is achieved when high density (compressed) CO2 is used and with light crude oil.
The system works as a closed-loop, whereby CO2 coming to the surface with oil, is separated and re-injected back to the formation. The pictures below show the complete process.
The utilization of CO2 EOR requires is a significant amount of planning and engineering, not only due to down-hole conditions and reservoir modelling but as a result of the extremely corrosive nature of CO2. Well design, handling facilities and alike, all must be able to handle pure CO2. This includes utilization of corrosion-resistant materials, such as stainless steel and various grades of superalloy steel, elastomers (rubber) materials for packers, internally coated and fibreglass lining for tubing and many more. This, in turn, hugely affects the costs and lead times.
While onshore, the logistics make it easier to conduct a CO2 EOR project, in the offshore environment it is more complex, challenging and costly, due to the fact that existing infrastructure was not designed to accommodate it, in terms of weight, space, power, and materials used in the equipment installed.
Depending on the size of the project, a specialized platform might be required to embrace offshore CO2 EOR projects. There are a number of constraints that should be considered and planned in advance, such as tanks and storage capacity, manning capacity to accommodate the required crew, pumping and supply capacity. In general, best practices and facilities for onshore CO2 EOR may not apply offshore.
Enhanced Oil Recovery (EOR) is a set of activities and techniques designed to reduce oil saturation and increase the oil recovery rate. In general, oil production is divided into 3 stages: primary, secondary and tertiary (improved). The tertiary method is also called Enhanced Oil Recovery (EOR).
EOR is used when the primary (natural flow) and secondary (water and gas injection) methods are no longer effective and normally leave around 60-80% of oil unrecovered. Using EOR can help to recover more oil, and help to achieve higher recovery rates. For gas wells, the primary production method is normally enough to produce around 80% of the reserves. Hence, EOR is used in crude oil production.
EOR techniques are very costly and the price of oil is a key factor for an operator when decisions are made on what EOR technique to implement. What could be technically feasible, might be expensive and not economical. In addition, there is always a dilemma between exploration (to find more oil) and EOR, and sometimes exploration risks are too high, thus companies choose the EOR approach instead. In addition, the pace of new oil discoveries and their size has been declining; hence producing more oil from existing fields is dominant thinking for a few years to come.
Screening criteria on which EOR method to deploy require a detailed analysis of a particular field and its location, reasons of lower recovery rate following primary and secondary methods, is conducted to understand the strategy and what EOR approach to applying. Due to a number of reasons, both technical and commercial, EOR makes economic sense in larger fields.
Offshore EOR makes it even more challenging and costly, due to the fact that existing infrastructure was not designed to accommodate equipment packages associated with it in terms of weight, space, treatment facilities and power generation. In addition, due to the well-placement offshore and the distance between the wells, any EOR campaign will require more time to have a noticeable effect. On average an EOR project takes 1-7 years till it is fully deployed. Laboratory testing and pilot projects are prerequisites of any full-scale EOR development and can take up to 4 years to complete.
EOR is divided into 4 distinctive categories as shown below.
Each EOR technique has its own use in and it is hard to be definitive with any particular EOR technique, as every method unique enough to work better in some cases than the others. Below are a guide and major characteristics of available EOR methods.
Worldwide, EOR contributes to less than 2% of global crude production. CO2- EOR is the largest and most widely used EOR method, followed by Thermal injection and Gas Injection.
After long years of production, the recovery rate in most of the fields in the GCC is coming to a point, whereby focusing on EOR considerations become more and more important - most oil fields in the region have been under primary and secondary production for decades. Although the fields do not require any EOR yet, some of the EOR projects in the GCC are one of the world's biggest and challenging, whereby the most advanced technology is used. Those include steam injection and polymer flooding in Oman, gas injection in UAE and CO2 pilot projects in UAE, Saudi Arabia, and Qatar, with more steam injection projects on the way in Kuwait. Oman is the regional leader in EOR projects and has implemented thermal, chemical and gas injections projects. It is estimated that by 2020, EOR production in Oman will be around 22% (PDO).
As a result of the growing population and efforts to maintain and increase oil production in the GCC, it is becoming more challenging to meet the demand for natural gas to cater to power generation, gas re-injection projects and steam generation. Hence, the focus on other EOR methods, such as chemical and CO2, will be evident in the years to come.
CO2 EOR projects are gaining more traction, not only because of their favourable economics but also as part of sustainable practices, as well as preserving natural gas used for gas injection, for power generation purposes and alike. There have been a number of research centres established in UAE, Qatar and Saudi Arabia to make progress in applying CO2 EOR in the region. NOCs in the region are taking proactive steps to establish a knowledge base and expertise ahead of time.
EOR is challenging and time-consuming and ineffective screening may result in lower-than-expected recovery rates. It is a common practice to conduct small trial projects to understand which EOR technique delivers the best project economics. In addition, the environmental impact and effects of chemicals could be best understood in smaller projects.
Some of the giant fields in GCC will not require EOR for the next 20-30 years. However, certain fields may need one in the next 3-5 years. The chart below represents the projected growth in EOR production worldwide. Growth in EOR production in GCC is evident and represents a notable proportion of GCC oil production.
Risks & Opportunities
Risks & Opportunities
The global demand for CO2 EOR services is relatively low and clustered around onshore fields in North America, because of the natural source and low cost of CO2. Due to costs involved, this method has not become particularly popular with many operators, mainly due to the availability of industrial CO2. Over the long term, as costs and technology of carbon capture and storage (CCS) provide betters economics for CO2 EOR, this method will be used more widely, especially in countries that are parties to the Kyoto Protocol.
Potential (as of 2009) global oil production and CO2 demand (storage) volumes from CO2 EOR (source: Advanced Resources International Inc)
Another driver of CO2 EOR is the new technology that would provide a higher oil recovery rate. This is driven by the fact that a number of oil fields that have a strong natural water driver can achieve a relatively high recovery rate of around 50%. This in turns provides no incentives for operators to use CO2 EOR at the current level of technology, as it makes the projects uneconomical. Hence, next-generation CO2 EOR is required to cover this gap.
According to a 2010 paper by Michael Codec, 47% of the worldwide CO2 EOR potential is in the Middle East. CO2 EOR here is at its grassroots with research facilities established and a number of trial projects were conducted. Although the full-scale CO2 EOR may be years away, NOCs in the region, especially ADNOC, is actively implementing roadmaps that will allow those projects to progress. Currently, the availability of industrial CO2 is the biggest constraint and as it hugely impacts the economics of the CO2 EOR projects. The first in the region CO2 compression facility in Abu Dhabi and a 50km pipeline is being built, with a planned delivery date in 2016.
It is also understood, that the extension of offshore concessions in the UAE will stipulate the requirements of applying EOR to increase the recovery rate to more than 60%. Rumaitha and Bab oilfields in UAE are other potential candidates for CO2 EOR.
Cost & Price Analysis
Cost & Price Analysis
EOR production is considered as a long term project undertaking in itself and requires a large number of equipment and packages. Studies, pilot projects, engineering design, equipment procurement, feedstock planning, drilling, and other materials, play an important role in EOR projects. Upfront capital costs in EOR projects are significant.
Cost-wise, CO2 EOR services are composed of a number of various components, such as industrial CO2, Carbon Capture and Storage technologies (CCS) and policies, as well as equipment required for CO2 EOR projects. Due to limited applications of CO2 EOR projects, there is no public data available to be analyzed and to understand price trends. However, up-front and operating costs would be very high and very challenging to manage. Controlling costs of CCS and CO2 EOR projects, especially offshore, is very challenging.
Almost every EOR project is bespoke and requires a large number of studies, pilot projects, and simulation. As a result of this, equipment and packages are not standard and may require bespoke engineering and manufacturing every time, which in turn reduces the diversity of available suppliers, increases costs and lead times.
The most critical levers that would influence the costs and procurement decisions are
- A comprehensive FEED study
- Analysis of the supplier market and their capabilities.
While there are numerous engineering companies providing the services of FEED studies, companies who specialize in the EOR studies and consultancies are in a better position to produce a more valuable and meaningful FEED - as they have large exposure to varus EOR projects.