SPE Distinguished Lecturer Program

The SPE Distinguished Lecturer Program is funded principally through a grant from the SPE Foundation.

The society gratefully acknowledges the companies that support this program by allowing their professionals to participate as lecturers.

Special thanks to the American Institute of Mining, Metallurgical, and Petroleum Engineers (AIME) for its contribution to the program.

Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl

The Kiss of Death

• You never want to hear the words “it was a technical success but an economic failure” about your project

• I’m going to try to help prevent this!!

Practical Business Aspects of the

CO2 EOR Process

Ken BrownAlberta Research Council

EOR/CCS Options

Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl

Outline

• World context• Technical context• Hard Business Issues• Soft Business Issues• Summary

The World Context

ENHANCED OIL RECOVERY MECHANISMS

CO2Hydrocarbon

NitrogenFlue Gas

Air

Steam (soak; drive)Combustion (in situ)

Hot water

PolymerAlkaline/CausticMicellar/PolymerSurfactant (foam)

CHEMICALGAS(Miscible/Immiscible)

THERMAL

OTHER

MicrobialSeismic

Enhanced Oil Recovery

CO2 Project Locations

Ref: IPCC Special Report on Carbon Dioxide Capture and Storage

Worldwide EOR Production

• Production is currently 2.3 MM BOPD• Represents 3.3% of the world’s production• Some projections reach 30 MM BOPD by

year 2020• CO2 floods will be a major contributor

Active CO2 Flood Statistics

Location Number Project BOPD EOR BOPD

World 125 373,500 285,100

U.S. 105* 323,100 249,700

Canada 8 43,000 28,000

* additional 16 projects in 2008-2009

Oil and Gas Journal April 2008

The Technical Context

The Size of the Prize

• Primary Production - 15% recovery

• Secondary Recovery - 30% recovery

• Enhanced Recovery - 45% recovery

Weyburn CO2 EOR Project

00

1010

2020

3030

4040

5050

19551955 19651965 19751975 19851985 19951995 20052005 20152015 20252025

Incremental Miscible Flood ProductionIncremental Miscible Flood Production

Base Waterflood ProductionBase Waterflood Production

Incremental Horizontal ProductionIncremental Horizontal ProductionIncremental Vertical ProductionIncremental Vertical Production

Prod

uctio

n (k

bbl/d

ay)

Weyburn Unit Oil Production

0

10,000

20,000

30,000

40,000

50,000

Jan-

55Ja

n-57

Jan-

59Ja

n-61

Jan-

63Ja

n-65

Jan-

67Ja

n-69

Jan-

71Ja

n-73

Jan-

75Ja

n-77

Jan-

79Ja

n-81

Jan-

83Ja

n-85

Jan-

87Ja

n-89

Jan-

91Ja

n-93

Jan-

95Ja

n-97

Jan-

99Ja

n-01

Jan-

03Ja

n-05

Date

BO

PD (g

ross

)

Primary & Waterflood

Pre CO2 Hz Infills

Vertical InfillsCO2 EOR

MB97-03 Forecast

Current production at 35 year high

WF Improv

Graph courtesy of EnCanaApprox. 75% of production comes from EOR area

What do you need to know?

• Can CO2 recover incremental oil?

• If yes, at what rate and volume?

• What is the necessary investment?

• What are the ongoing operating costs?

Technical Considerations

• The devil is in the details!!– Screen– Manage it correctly– Study 44

– Model– Pilot– Consult experts

Hard Business Issues

• Source• Transport• Oilfield

The Source of the CO2 ?

• Syncrude/Suncor• Wabamun• Exxon LaBarge• Saskpower• DGC• TransCanada• Hydrocarbon instead

Borsig Compressor

CO2 Pipeline To CanadaRegina

Estevan

Bismarck

WeyburnWeyburn

BeulahBeulah

North DakotaMontana

Manitoba

Saskatchewan

EdmontonEdmonton

CalgaryCalgarySaskatoonSaskatoon

ReginaRegina

AlbertaAlberta SaskatchewanSaskatchewan

CanadaCanada

USAUSA

Pipeline Construction

• 1,080,000 feet of pipe

• Averaged 2-3 miles per day

Recycle GasCompressors

Battery GasBattery GasCompressorCompressor

CO2Receiving Terminal

COCO22 InjectionInjectionWellWell

Source WaterWells

Surface Facilities for CO2

WaterWaterInjection PlantInjection Plant

EOR Oil Satellite

CO2 InjectionSatellite

Water InjectionSatellite

Water InjectionWells

Conventional Oil Satellite

CO2 from DGC

Free WaterKnock Out

Treaters(Existing)

InletSeparator

Gas Sales

Oil Sales

Soft Business Issues

• Owners • Government • Economic value• Operational• Societal

Owner’s issues

• Risk tolerance, cash management and capacity to invest

• Joint Venture agreement

Government issues

• Royalty• Regulatory• Environmental

Economic Value Issues• Price forecasts • CO2 credits• Reserves management• Risk management

Operational Issues

• Technical competence• Operations competence

Societal Issues• Sour gas• Storage • Socio economic

Summary•EOR is not just a Technical challenge •Business “opportunities" exist with:

–CO2 supplier–Existing facilities–Partners–Government–Operations–Society

• A long term strategic plan to address these “opportunities” is essential

Thank you

• Contact : ken.brown@eorccs.com