SPE 113126

Economics of Field Proven Chemical Flooding Technologies

Kon Wyatt, Malcolm Pitts, and Harry Surkalo, Surtek, Inc.
Copyright 2008, Society of Petroleum Engineers

This paper was prepared for presentation at the 2008 SPE/DOE Improved Oil Recovery Symposium held in Tulsa, Oklahoma, U.S.A., 1923April2008.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its
officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to
reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright.


Abstract
Chemical enhanced oil recovery technologies are field-proven methods that improve overall oil recovery. High oil prices and
dropping reserves replacement has stimulated interest in these technologies, particularly for application in mature
waterfloods. Depending upon the perspective of investors, the decision to proceed with an oil field project may depend upon
projected: Rate of Return, Return on Investment, $/bbl of added reserves, cumulative cash flow, or combinations of these.
This paper discusses chemical flooding processes, constraints on application, and presents economic impacts of: injected
chemical cost, oil price, chemical concentration, oil recovery, and process time. The alkaline-surfactant-polymer technology
is compared with micellar flooding and alkaline-polymer flooding. For example, a typical range of chemical costs per barrel
of added oil for an Alkaline-Surfactant-Polymer project would be $3.50/bbl to $12/bbl for oil recoveries ranging from 0.2 PV
down to 0.05 PV (or approximately 25% OOIP to 6.25% OOIP). Rate of Return (ROR) and payout time depends upon
process rate, or pore volume per year of injection. Chemical flooding places the majority of cost over the first 50% pore
volume of injection whereas, oil incremental income is delayed until the developing oil bank reaches production wells. In
todays oil price environment of >$40/bbl, chemical flooding technology provides significant financial returns with increased
ultimate oil recoveries.

Introduction
Chemical enhanced recovery processes are by any measure quite mature. L. C. Uren and E.H.Fahmy
1
wrote in 1927 A
definite relationship exists between interfacial tension of the oil against the flooding medium and the percentage recovery
obtained by flooding. A patent was issued the same year to H. Atkinson for the use of aqueous soap solutions or other
aqueous solution to decrease the surface tension between oil and flooding medium. Pennsylvania State University reported
much of the research on surfactant over the next 25 years.
2
A tremendous amount of research on interactions of various
aqueous chemicals with oils and rock has been performed since that time. Of particular relevance to this paper are the work
of Reisberg and Doscher in 1956 using alkalis and alkali-surfactants,
3
the soluble oil process of Holm and Bernard
4
and
Csazar,
5
and Gogarty and Olsons
6
micellar process known as Maraflood. All of the major oil company research groups
became keenly interested in recovering additional resource from mature waterfloods during the Arab oil embargo of 1973 and
the ensuing run up of oil price.
Gogarty speculated that petroleum sulfonate manufacturing capacity in the early 1970s of on the order of 388 million
pounds would be insufficient to meet the demand for prospective projects that, at the time, were estimated with potential to
produce 25 to 60 billion bbl of oil.
7
This possibility and the desire to further improve economics of the process lead
Marathon to constructing a 5,000 bbl/day crude-oil sulfonate slug manufacturing facility.
8
Gogarty concluded that the
economics of surfactant flooding were driven by factors influencing project life (well spacing, permeability, thickness, depth,
etc.), costs (injected fluid costs, surface facilities, additional wells, etc.), royalty and taxes, and most significantly, the price of
oil.
9
This remains unchanged, though oil prices have risen considerably above the $11/bbl to $15.50/bbl considered in the
economics of the time.

Chemical Flooding Processes
Many chemical flooding processes have been used to enhance oil recovery efficiency and effectiveness. This paper will
discuss only those process recognized to reduce waterflood residual oil saturation, which we categorize as:
Micellar-Polymer (MP) Surfactant-Polymer (SP)
Alkaline-Polymer (AP) Alkaline-Surfactant-Polymer (ASP)
2 SPE 113126
Though each of these processes would technically reduce waterflood residual oil saturation in the proper reservoir
environment without polymer, we believe polymer is necessary from a practical standpoint to maximize process efficiency
and economics. We have seen that even in cases of light oils with very favorable mobility ratio that the addition of a small
amount of polymer will dramatically improve oil recovery efficiency.
10

A brief description of these chemical flooding processes is given only to identify aspects that impact the economics for
applying them.
Surfactant-Polymer (SP) involves adding low concentrations (0.1% to 2%) of a surfactant and/or cosurfactant and/or
cosolvent and/or salt to the injection water in order to reduce the oil-water interfacial tension. Polymer is added to
increase the solution viscosity in order to overcome viscous instability of low interfacial tension displacement.
11, 12
The
SP solution is injected for 20% to 40% pore volume of the target oil-bearing zone, followed by similar volumes of
polymer flush.
Micellar-Polymer (MP) is similar to SP except higher concentrations of surfactant are used (2% to 12%) injected for
lower pore volume (5% to 20%). At these high surfactant concentrations, the polymer and surfactant are incompatible,
and so micellar solutions develop viscosity due to structuring of the micelles that often requires the addition of
cosurfactants and/or alcohols. This structuring and many other properties of micellar solutions are sensitive to changes
in salinity, temperature, etc. The micellar slug is followed by a polymer flush as with SP process.
Alkaline-Polymer (AP) flooding involves adding an alkaline agent along with polymer to softened injection water. The
alkaline agents are usually either caustic soda (NaOH) or soda ash (Na
2
CO
3
) at concentrations of less than 2%. The
water must be softened because the alkaline agents would cause any divalent cations, such as calcium and magnesium, to
precipitate, and this solid precipitate will plug most formations. The alkali reacts with components of some oils to form
soap that in the right environment will reduce the interfacial tension. The AP solution is injected for 20% to 40% pore
volume and followed by a similar volume of polymer flush.
Alkaline-Surfactant-Polymer (ASP) flooding simply adds surfactant (0.05% to 0.5%) to an AP solution to broaden the
range of reservoir environment in which the ASP process applies. Many light oils do not contain sufficient amounts of
the components that react with alkali to reduce the oil-water interfacial tension sufficiently to overcome capillary forces
trapping the oil. Blending surfactant with the alkali overcomes this barrier.
Many of the field projects conducted in the 70s and 80s were MP projects in spite of the complexity of designing these
solutions compared with the relative ease of SP formulations. This is partly because adsorption by reservoir rock strips the
surfactant from low concentration SP formulations rendering them ineffective as the solutions surfactant concentration
decreases in it advances through the reservoir. One property of alkaline agents is that they change the reservoir rock
chemistry
13
in such a way as to significantly decrease this adsorption. In fact, the very successful Bell Cr. micellar-polymer
field project used an alkaline pre-flush to minimize the surfactant adsorption.
14
Therefore, ASP projects use lower
concentrations of added surfactant than SP projects.
Not every reservoir environment is suitable to all of
these chemical flooding processes, and some environments
are exclusive to some processes. Laboratory design projects
identify the viability of the various processes, and relative
merits of the processes in cases where more than one may
apply. The economics presented herein describe cases in
which all the chemical processes are viable.
Tertiary oil recovery is limited by the remaining oil
saturation in the reservoir. Dilution, dispersion, adsorption,
and reaction of the injected chemicals means that some
portion of chemical injection will be ineffective. This
results in oil recovery curves such as that shown in Figure
1, where a finite injected volume is needed to begin
mobilizing tertiary oil, but little additional recovery is added
beyond some larger volume. This curve was generated
based on average performance of 6 micellar-polymer (MP)
projects.
14,15,16,17

The timing of the response is dependant on the oil
saturation conditions at the beginning of the chemical flood,
relative permeability characteristics, and the final saturation
conditions after the chemical front passes. Oil wet
reservoirs tend to have higher waterflood residual oil
saturations and hence respond more rapidly than the
example shown. We explore the impact of saturation
conditions on the economics later. Prior to developing the
economics, we first define assumptions and discuss costs.
Figure 1: Incremental Oil Recovery versus Total Injected
Volume (micellar, polymer, and water) based on Average of 6
MP field projects.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
Pore Volume Injected
O
i
l

R
e
c
o
v
e
r
y
,

%

C
u
m
u
l
a
t
i
v
e

O
i
l
SPE 113126 3

Costs
A criticism of chemical flooding voiced in
the past is that the economics are always
out of reach because oil price increases
also drive up costs for raw material
proportionally. Figure 2 shows historical
oil and chemical prices. Some correlation
in the trend is seen, though the actual
chemical cost rise is also driven by other
reasons in than the cost of feedstock or
energy. Cost of surfactants used in many
of the field projects run about 100% higher
than for alkyl-benzene sulfonate (ABS).
In spite of current oil prices in excess of
$80/bbl, many operators are using $50/bbl
for economics, though that price was last
seen in mid 2005. We base chemical costs
on 2007 data. Unless otherwise stated, the
costs used in the economics are:
Oil - $50/bbl
Net revenue interest 0.8
Surfactant - $1.85/lb
Co-surfactant - $0.70/lb
Caustic soda - $0.46/lb
Soda ash - $0.11/lb.
Polymer - $1.20/lb
Facility costs depend upon the chemical-flooding process, need for water treatment, and injection rate. Cost for these
facilities has also increased along with the price of oil, with a considerable run up in cost over the past 3 years. We use 2007
pricing unless otherwise stated. The lowest cost facility would be for the SP process, followed by AP, ASP, and MP. The
increase in cost for AP over SP is primarily because of water softening needs. Water softening costs depend upon the total
dissolved solids (TDS) and hardness content of the water. We look at 2 cases in terms of water treatment for processes using
alkali:

Fresh water at 4,000 mg/L (TDS) water with 100 mg/L calcium + magnesium (hardness ions) - $0.03/bbl treated water
Brine at 15,000 mg/L water with 600 mg/L calcium - $1.00/bbl, and plant cost greater than fresh water case.

We assume a project size of 10,000 MBBL pore volume for ease of scaling. The average total injected volume (micellar
solution followed by polymer followed by water) of the projects averaged in Figure 1 is 1.5 PV, or 15,000 MBBL. The
project life used is 10 years for 1.5 PV of injection yielding an average daily injection rate of 4,110 bbl/day. Typically
injection rates decrease when injecting the relatively viscous polymer solutions compared with water, and the amount
depends upon the polymer concentration, which in turn is dictated by oil viscosity. For the economic model used, we assume
injection rate decreases to 60% of water rates while injecting chemicals. This presumes that injection is at or near some
maximum allowed pressure during waterflooding, which is not always the case, and that no additional injection wells are
added for the chemical flood. Initial water rate injection is 5,000 bbl/day, which is needed to estimate the facility cost. For
this size facility and based on recent actual costs for 7 ASP plants of varying capacity, we estimate facility cost by process
below:
MP - $5,500,000
SP - $ 1,500,000
AP fresh water - $ 2,800,000
AP brine - $3,200,000
ASP fresh water - $3,000,000
ASP brine - $3,400,000
All economics are based on incremental oil recovery and cost, assuming ongoing waterflood operations are economic.
We include no benefit for accelerating the production of waterflood oil that would be recovered along with the incremental
oil. We do include incremental operating costs of $10,000 month (manpower) and $0.05/bbl fluid lifted (operations). We
also assume a cost of $700,000 for laboratory and engineering design required to implement a project.

Historical Oil and Chemical Costs
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00
1980 1985 1990 1995 2000 2005 2010
$
/
l
b

c
h
e
m
i
c
a
l
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$
/
b
b
l

o
i
l
Surfactant (ABS)
Caustic Soda
Soda Ash
Oil
Figure 2: Historical Crude Oil and Chemical Cost
4 SPE 113126
Assumptions
Assumptions related to cost and injection rate are given in the prior section. Table 1 lists the assumed injection
concentrations. Using these concentrations and the
costs already provided in the prior section, the costs
of the injected solutions are compiled in Table 2. In
Table 2, the lower cost alkali is used with fresh water
that costs less to soften, whereas the more expensive
caustic soda is used with brine that is more costly to
soften. This is only to provide a range of ASP and AP
costs and not a reflection of what alkaline agent works
best in a particular water. Tables 1 and 2 provide cost
basis for the economic runs, but can also be used to
estimate cost for a particular project. For instance,
from Table 2 the gross chemical cost for applying the
MP process in our example 10,000 MBBL reservoir
is:

10
7
x $3.75 = $37,500,000

For recovery of 0.1 PV of oil, the
chemical cost per barrel of
incremental oil is:

bbl / 50 . 37 $
1 . 0
75 . 3 $
=

Our example 10,000 MBBL
field has 6,000 MBBL OOIP, so
this recovery represents 16.7%
OOIP.

Economics
The costs and assumptions
presented are used to estimate
economics for the various
processes. In the first comparison,
we hold oil recovery constant to
compare economic parameters
over a range of oil price. Results
are summarized in Table 3 for
$50/bbl oil price. The calculated
rate of return is shown for this oil
price and two others in Figure 3.
Economic performance
correlates with the injected cost
times injected pore volume listed
in Table 2. The best economic
performance has the lowest cost.
Note that the breakeven point for
micellar-polymer (MP) flooding is
at about $40/bbl oil, and for
surfactant-polymer (SP) at about
$24/bbl. These economics for the SP process are consistent with the thorough simulation based sensitivity analysis presented
by Anderson et. al.
18
ASP flooding was performed economically in 1993 when oil prices were about $16.50.
19

The comparisons made so far assume oil recovery is the same for each process. This is not realistic for a specific field, as
there would be some variation in performance. Table 4 compares oil recovery required to get a 30% rate of return (ROR) for
each of the processes. This shows a very broad range in recovery ( 11.2% to 54.8%) needed to get the same economic
benefit. Performance for optimized systems within each process type are expected to vary by no more than 5% OOIP
provided the process is applicable for the particular reservoir setting.
Table 1: Injected Solution Composition
Low Tension "slug"
Process Alkali, %
Surfactant %
Co-
Surfactant
%
Polymer
mg/L
Polymer
flush,
mg/L
MP 7.0 1.5 1200
SP 1.0 0.5 1200 1200
Na
2
CO
3
AP 1.0 1200 1200
ASP 1.0 0.20 1200 1200
NaOH
AP 1.0 1200 1200
ASP 1.0 0.20 1200 1200
Table 2: Injected Solution Volume and Cost
Low Tension
"slug" Softening Injected Cost
Polymer
flush
Injected
Cost
Process
Injected Volume $/bbl $/bbl
Injected
Volume $/bbl
Injected Cost
$/bbl * PV
MP 0.07 49.00 0.63 0.50 3.75
SP 0.30 8.20 0.40 0.50 2.66
Na
2
CO
3
fresh water
AP 0.30 0.03 0.92 0.40 0.50 0.49
ASP 0.30 0.03 2.21 0.40 0.50 0.87
NaOH brine
AP 0.30 1.00 3.11 0.40 0.50 1.44
ASP 0.30 1.00 4.41 0.40 0.50 1.82
Table 3: Model Economics of Chemical Flooding Processes at $50 oil
Incremntal Oil
Incremental
Cost
Present
Worth @
15%
Added Oil
Cost Payout
Process
%OOIP M$ M$ $/net BBL Years ROR, %
MP 25.0 45,677 -9,806 38.07 7.3 6.90
SP 25.0 30,777 4,948 28.20 5.8 21.80
Na
2
CO
3
fresh water
AP 25.0 10,250 21,462 8.54 3.4 74.50
ASP 25.0 14,331 18,102 11.94 3.9 56.00
NaOH brine
AP 25.0 17,235 15,680 14.37 4.4 46.20
ASP 25.0 21,321 12,317 17.77 4.8 36.10
SPE 113126 5



Oil recovery obtained by applying a chemical flooding
process increases as the injected volume increases, reaching
an unrealistic maximum if all the residual oil is recovered.
The response is similar to that seen in Figure 4. The most
benefit is gained where the slope is the greatest, or where a
small increase in injected volume gains the greatest
additional recovery. This is also the point where there is the
most economic benefit in terms of $/bbl of added oil when
only chemical costs are considered. One would consider the
process to be uneconomic when cost of additional oil
recovered for some increment of additional injection exceeds
costs that oil could be obtained by other means, such as
acquisitions, or a finding and development cost threshold.
Economics are calculated for the ASP process (fresh
water) using the injected volume and response curve of
Figure 4 and assuming $50 oil price. Results are shown in
Figure 5 for a range of injected slug volumes and
recoveries. Similar trends would be observed for any of the
other processes, though the magnitude would be shifted as
per Figure 3. For instance the SP flood peaks at about 25%
ROR for 0.3 PV injected and begins to decrease thereafter.
A final consideration is the flooding process time or
injected pore volumes per year for a chemical project.
Response to chemical injection is delayed because the
injected chemicals must contact the oil to develop an oil bank
that is then mobilized to the producing well. Cost for chemicals, such as listed in Table 2, are incurred for some time before
the response to injection is seen at a producing well. In the response curve shown in Figure 1, the 0.2 pore volume injected
where incremental recovery is measurable, requires 1.3 years for our example 10 year project. Greater residual oil saturations
translate to a more rapid oil response, and therefore, improve the present value of the chemical flooding project. Figure 6
compares response for higher residual oil saturation conditions (in the dashed line) with response curve for an 8, 10, and 12
year ASP projects, all obtaining the same oil revenue. The earlier response favorably impacts the economic parameter rate of
return even if the cumulative cash flow remains unchanged. Similarly, greater well spacing means the pore volume of a
pattern is larger which reduces the process rate if injection rate remains unchanged. A lower permeability reservoir would
also be flooded at reduced process rate, all other things being equal. Figure 6 lists rate of return for the same cumulative oil
recovery recovered over a range of times. The associated costs are also spread over the appropriate pore volume injected for
this base case ASP flood used in prior examples. Thus, if ROR is the principal economic factor driving a project, it might be
possible to reduce process time by adding additional wells and reconfiguring patterns to improve present value at the
expensive to the bottom line cash flow.

- 20
0
20
40
60
80
100
20 30 40 50 60 70 80
Oi l Pr i ce, $/ bbl
MP
SP
AP f r esh
ASP f resh
AP brine
ASP br ine
Figure 3: Rate of Return vs. Oil Price for Chemical
Flooding Processes
Table 4: Oil Recovery at $50 oil
Required for 30% ROR
Incremntal Oil
Process
%OOIP
MP 52.4
SP 30.7
fresh water Na
2
CO
3
AP 10.1
ASP 14.4
brine NaOH
AP 17.5
ASP 21.7
Figure 4: Recovery of Remaining Oil in Place vs. Injected
Slug Volume
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0.0 0.2 0.4 0.6 0.8 1.0
Pore Volume Injected
O
i
l

R
e
c
o
v
e
r
y
,

%

R
e
m
a
i
n
i
n
g

O
i
l
6 SPE 113126
























Conclusions
1. Chemical flooding processes can be economic if applied to the proper reservoir setting.
2. Economic performance is dominated by oil price, cost per barrel of injected solution, and duration of chemical injection.
3. Those processes with the lowest cost per injected barrel such as alkaline-polymer flooding (AP) or alkaline-surfactant-
polymer (ASP) can incur higher water treatment and facility cost and still have better economics than processes with
higher injected barrel costs.

References


1
Uren, L.C. and Fahmy, E.H.: Factors Influencing the Recovery of Petroleum from Unconsolidated Sands by Waterflooing Trans.,
AIME (1927), 77
2
Calhoun, J.C., Stahl, C.D., Preston, F.W. and Nielson, R.F.: A Review of Laboratory Experiments on Wetting Agents for
Waterflooding, Producers Monthly: Jan. 1951.
3
Reisberg, J. and Doscher, T. M.: Interfacial Phenomena in Crude Oil-Water Systems, Producers Monthly, Sept., 1956.
4
Holm, L. W. and Bernard, G.G.: Secondary Recovery Waterflood Process, U.S. Patent No. 3,082,822 (1959).
5
Csazar, A.K.: Solvent Waterflood Oil Recovery Process, U.S. Patent No. 3,163,214 (1961).
6
Gogarty, W.B., and Olson, R. W.: Use of Microemulsion in Miscible-type Oil Recovery Procedure, U.S. Patent 3,254,714, (1966).
7
Oil and Gas Journal: Price Seen Key to Enhanced Recovery, May 5, 1975, pp 160-161.
8
Earlougher, R.C. Jr., ONeal, J.E. and Surkalo, H., Micellar Solution Flooding: Field Test Results and Process Improvements, SPE
4753 Presented at the SPE-AIME Improved Oil Recovery Symposium, Tulsa, OK, April 22-24, 1974.
9
Gogarty, W.B.: Oil Recovery with Surfactants: History and a Current Appraisal, Improved Oil Recovery by Surfactant and Polymer
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of Chemical EOR Processes Evaluation for Malaysian Oilfields, SPE 10093, 2006.
11
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Didler Pavone: Observations and Correlations for Immiscible Viscous-Fingering, SPE Reservoir Engineering, May 1992, pp 187-194
13
Kon Wyatt, Malcolm J. Pitts, and Harry Surkalo: Mature Waterfloods Renew Oil Production by Alkaline-Surfactant-Polymer
Flooding, SPE 78711, 2002.
14
L.W. Holm: Design, Performance, and Evaluation of the Uniflood Micellar-Polymer Process Bell Creek Field, SPE 11196, 1982.
15
Howell, J.C., McAtee, R.W., Snyder, W.O., and Tonso, K.L.: Large-Scale Field Application of Micellar-Polymer Flooding, SPE 7082,
Journal of Petroleum Technology, June 1979, pp 690-696
16
W.B. Gogarty, W.C. Tosch: Miscible-Type Waterflooding: Oil Recovery with Micellar Solutions, JPT, December 1968, pp 1407-
1428
17
O.J. Aguey: Field Performance Analysis of Micellar Polymer Pilot Flood, Prepared for DOE under Contract No. DE-ACO3-
77ET12044
-10
0
10
20
30
40
50
60
70
0.0 0.2 0.4 0.6
Pore Volume Injected
R
O
R
,

%
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
C
u
m
u
l
a
t
i
v
e

N
e
t

C
a
s
h

F
l
o
w
,

M
$
ROR
Net Cash Flow
Figure 5: Economics for ASP in Fresh Water versus injected
ASP Volume.
Figure 6: ASP Project Life versus Cumulative Incremental Oil
and % Rate of Return.
0
200
400
600
800
1000
1200
1400
1600
0 2 4 6 8 10 12
Years
C
u
m
u
l
a
t
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v
e

O
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l
,

M
B
B
L
77.0% ROR 56.0% ROR 39.6% ROR 80.7% ROR
SPE 113126 7

18
G.A. Anderson, M. Delshad, C.B. King, H. Mohammadi, and G.A. Pope: Optimization of Chemical Flooding in a Mixed-Wet Dolomite
Reservoir, SPE 100082, 2006
19
Jay Vargo, Jim Turner, Bob Vernani, Malcolm Pitts, Kon Wyatt, and Harry Surkalo: Alkaline-Surfactant-Polymer Flooding of the
Cambridge Minnelusa Field, SPE Reservoir Evaluation and Engineering, 3 (6), Dec. 2000, pp 552-558