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Creating a new wave of interest in EOR technologies [Oil & Gas News](Oil & Gas News Via Acquire Media NewsEdge) THE global enhanced oil recovery (EOR) market totalled $21 billion in 2012 and was projected to increase to nearly $22.6 billion in 2013; the market should total $34.4 billion by 2018, with a five-year compound annual growth rate (CAGR) of 8.8 per cent from 2013 to 2018. Though most EOR techniques have been around for a number of decades, oil prices have often been too low to make their use economic on a large scale. However, the current period of high oil prices, together with increasing global oil demand, maturing oil fields, improving technologies and ongoing concerns over carbon dioxide (CO2) emissions, is creating a new wave of interest in EOR technologies. WHAT IS EOR? Enhanced oil recovery (EOR) is a term for the techniques used for boosting oil recovery by injecting chemicals, gas, or steam to force more oil from an aged field. EOR is also called tertiary recovery or improved oil recovery. On an average, 70 per cent to 75 per cent of the oil remains trapped in reservoirs because it is too difficult to extract, so by using EOR, about 30 to 60 per cent of the reservoir's original oil can be extracted. EOR has the capability to increase oil recovery up to 75 per cent, although it is expensive to use in an oil field. Currently three methods of EOR are used - gas injection, thermal recovery, and miscible solvents. But all the reservoirs cannot use EOR methods for production due to the higher cost of development. So these reservoirs must be heavily evaluated to determine which type of EOR will work best on the reservoir. According to Visiongain's analysis, the global EOR market saw production of 2.943 million barrels per day (mbpd) in 2013. Each of the three main categories of EOR (thermal, gas and chemical) is set to see a substantial increase in production over the next ten years, creating opportunities for a range of companies within the oil industry. THERMAL (STEAM) A steam injection heats the oil inside the reservoir which helps it flow easily through the fractures to the production wells. Along with maximum possible oil recovery, the thermal recovery method is accompanied by high capital expenditures as well as high operating cost and is therefore risky. A steam injection into the reservoir raises recovery from 3 to 5 per cent to 25 to 35 per cent. The best thermal production techniques which are used currently are: steam assisted gravity drainage, cyclic steam stimulation, steam flood, and in-situ combustion. In 2011 some advanced projects started in Oman and California, which used solar energy to produce steam. It is estimated that over 50 per cent of applied EOR in the US is done by thermal recovery. Thermal EOR production is dominated by the Canadian oil sands market, which uses widely recognised EOR processes such as cycle steam stimulation (CSS) and steam assisted gravity drainage (SAGD) to extract oil. Strong growth is anticipated in this market, together with thermal EOR techniques used on heavy oil resources in a number of global locations. The desire to reduce potentially harmful CO2 emissions will help drive the gas EOR market as carbon capture and storage (CCS) technologies are combined with EOR, which gives a value to the carbon. Though the US will continue to predominately use natural sources of CO2 for enhanced oil recovery, EOR projects linked to carbon capture are being established elsewhere. Improvements in the molecular structures of polymers and surfactants have enabled chemical EOR techniques to become much more economic and efficient in recent years and a number of large-scale projects are due to come into operation over the next few years, particularly in offshore environments. Over 50 per cent of applied EOR in the US is done by thermal recovery GAS INJECTION Gas injection for EOR involves injecting nitrogen, carbon dioxide, or natural gas into the reservoir among which the carbon dioxide-EOR method is gaining the most popularity. Gas injection EOR involves injecting the miscible gas into a reservoir which creates an easy flowing mixture which flows to production wells from the reservoir. Injecting gas into the fractures raises the recovery of oil from the field from 10 per cent to 45-50 per cent. There is an increase in the use of gas-EOR by oil industries in America, Asia-Pacific, and in other countries because the companies with carbon capture and storage technologies can market their carbon dioxide to oil industries, which also helps them to reduce greenhouse gases and receive possible tax breaks or government grants. CHEMICAL INJECTION Chemical EOR introduces a polymer into the reservoir to improve the effectiveness of surfactants, which helps lower the surface tension that holds back the flow of crude oil through the well. This method includes surfactant flooding (including foam) polymer displacement, alkaline displacement, acid displacement, chemical reagents displacement, and microbiological treatment. It is estimated that injection of chemical into the reservoirs increases the oil recovery from 15 per cent to 25 per cent. The use of this method is limited because of the expensive chemicals needed, impact on the environment, and less proven records of success of this method. With the application of this method the recovery of oil from the field sees an increase of 15 per cent to 25 per cent. The market is showing growth since 2005 because of government interest and investment in new technologies as the increase in oil production will fuel the economy and use of CO2 will help reduce the industrial CO2 emissions. It is estimated that more than 130 billion tonnes of carbon dioxide could be captured by CO2-EOR on a global scale. The current total oil production is approximately 700 million barrels which is expected to grow almost 10 times by 2020 which will boost the revenue by around 14 times in the next 8to10 years. THE CO2 EOR MARKET The CO2 EOR market is a well-established sector of the oil and gas industry in the US with the first commercial projects dating back to the early 1970s. The key enabler of this success has been the availability of a large volume of low cost naturally occurring CO2, which has been tapped in the US to provide a regular supply to EOR projects. However, the US remains the only nation to have discovered naturally occurring CO2 sources apart from natural gas collections with a high CO2 content. As maturing oil production markets provide more opportunity for CO2 use in EOR, demand for CO2 has risen while supply volumes have not seen significant additions over the market's 35+ year history. There has therefore been a growing interest in capturing some of the approximately 32 billion tonnes of CO2 released into the atmosphere globally from anthropogenic sources, and using this to boost production of oil from waning production areas. This creates opportunities in many more countries outside the US where CO2 EOR markets have the potential to grow. The intensifying link with carbon capture technology will mean that areas advanced in this technology with significant maturing oil areas will prosper in the CO2 EOR market. Visiongain calculates that spending in the CO2 EOR market will total $5.305 billion at the start of 2014. This includes spending on geological studies connected to CO2 EOR, injection and production well drilling and reworking, pumping equipment, CO2 recycling facilities and CO2 distribution pipelines. The report also covers investment into technology to capture carbon from anthropogenic sources as this is increasingly becoming a major feeder to CO2 EOR projects. Carbon dioxide purchases are not included in the financial analysis. Due to the gas being such a major cost factor and the inconsistent pricing and supply of CO2 globally, Visiongain feels this would distort investment figures for new CO2 EOR projects. (c) 2014 Al Hilal Publishing & Marketing Group Provided by Syndigate.info, an Albawaba.com company |