Journal of Economics and Engineering, ISSN: 2078-0346, February, 2010 ENHANCED OIL RECOVERY (EOR) POTENTIAL IN NIGERIA O.A.

Olafuyi*, M.C. Chukwuma, E.S. Adewole Department of Petroleum Engineering, University of Benin, Benin City (NIGERIA) *lekanolafuyi@hotmail.com ABSTRACT This work seeks to consider EOR technology application in Nigeria based on econo mic, technological, legal and environmental feasibilities. It also seeks to identify some o f the problems, which would possibly prevent Nigeria from achieving the full benefits of applying EOR techni ques. Possible solutions based on the producing regions are highlighted and recommenda tions are made in the hope that some time in the nearest future, the country will not only begi n to consider EOR, but will produce oil optimally using the technique(s) which is/are best suited for the co untry s oil producing regions (Niger Delta). The review concludes that EOR is a viable option for increasing o il reserves in Nigeria. Key words: enhanced oil recovery, Niger Delta, Nigeria, oil producing INTRODUCTION Nigeria, according to current figures, is the 6th largest crude oil exporting na tion in the world. Her economy depends on the oil produced for about 95% of her foreign exchange earnin gs. The country is estimated to have about 42 billion barrels of crude oil reserves and most of thi s oil is in the Agbada Reservoir System of the Niger Delta Basin. There are two basins in Nigeria, name ly; Niger Delta (major basin) and Chad (minor basin) The Niger Delta Basin is one of the largest in the world and it is made up of th ree reservoir systems or formations namely; Benin formation, Agbada formation and Akata formation. NIGERIA S CRUDE OILS There are many crude oils in Nigeria generally referenced with respect to the lo cation of the processing centers: Bonny Crude Processed by Shell Nigeria Limited at Bonny Forcados Crude Processed by Shell Nigeria Limited at Forcados Escravos Crude Processed by Chevron Nigeria Limited at Escravos Brass Crude Processed by Agip Nigeria Limited at Brass The basic characteristics of these crude oils are: API Gravity @60oF -27.1 44.4 Pour Point --25oC to -36oC Low Sulphur (Sweet Crude) 0.09 0.3

Gas Oil Ratio (GOR) 350 1500 SCF/Bbl Specific Gravity between 0.70 -0.75 ENHANCED OIL RECOVERY POTENTIAL Presently, average primary recovery in Nigeria is about 34% of Original Oil Init ially in Place (OOIIP). This translates to a potential of about 27.72 billion barrels. Thus, in Nigeria, there is a potential for enhanced recovery of 66% of OOIIP. At present, a few companies have already emba rked on secondary recovery schemes, precisely waterflooding. None is yet to apply any tertiary rec overy methods. Several tertiary recovery processes have been applied before in the literature w hich has the potential of being applied in the Niger Delta. These include thermal processes ( cyclic steam injection,

 Journal of Economics and Engineering, ISSN: 2078-0346, February, 2010 steam flooding and fire flooding), chemical processes (polymer flooding, alkalin e flooding and surfactant flooding), miscible flooding (cyclic CO2 injection and CO2 flooding) and microbi al processes (biopolymers, surfactants, organic solvents and biological gas injection). The success of any of the processes are dependent on several factors as will be discussed later in the paper. The application of EOR to boost oil reserves has certain advantages, for instanc e, exploration costs and risks that have increased substantially in the last few decades are absent i n case of EOR. In applying EOR the areas in which the oil reserves are situated are known. Also, the exploi tation of new discoveries requires sizable new investment, whereas EOR processes use existing facilities m ost times and a few new installations, which usually cost much less than those required initiating the e xploration of virgin discoveries. In both cases, the unproved reserves of both probable and possible categories are being exploited. However, the level of certainty is higher in EOR and such reserves ca n be generally categorized as probable in the broad base. In every EOR process, there are factors which affect the properties of the proce ss, and ultimately the recovery of oil from the reservoir. These factors may relate to t he following: Geological factors include structure type, geologic age, lithology, fractures, f aulting, complexity, continuity, lenticularity, heterogeneity, clay content and turbidities. Reservoir conditions like depth, bottom hole pressure and temperature, dip, perm eability and gas cap. Reservoir volume properties like net pay thickness, number of zones, porosity an d area. Saturations include connate water saturation, initial oil saturation, current oi l saturation and residual oil saturation after primary and secondary recovery Water characteristics include the salinity, calcium and magnesium presence. Oil characteristics like gravity, viscosity, formation volume factor and gas / o il ratio (GOR). Oil volume (Resources/Reserves) includes the original oil in place (OOIP), estim ated primary / secondary recovery and remaining reserves. Oil volume (Production history) include cumulative production, annual production and production decline rate. Field development (Conventional) -discovery year, primary drive type, type of se condary recovery, year of secondary recovery, total wells drilled and latest active wells Field development (EOR) like type of EOR process, year of initiation, current st age of development and acres under development. Also, these factors help in ranking a reservoir for potential EOR application. T

able 1. shows a quick look selection chart for suitable EOR process applicable to a reservoir based on properties discussed above. Based on this chart and with the characteristics of the crude oils in Nigeria, t he following EOR methods may find potential applications: CO2 Flooding Surfactant Flooding Enriched Gas Injection EOR POTENTIAL IN NIGERIA Presently, most crude oil production from reservoirs in Nigeria is by primary re covery. In addition, the potential of applying EOR methods in Nigeria will greatly depend on the foll owing: FINANCIAL CONSIDERATIONS A relatively stable financial atmosphere has to be created so as to encourage in vestment in enhanced oil recovery. This is one with low inflation rates, low interest rates on loans and general price stability. The fulfillment of these conditions will help to assure private indiv iduals and companies and encourage them to invest in ventures aimed at enhancing oil recovery. Government subsidies on equipment, machinery and chemicals needed in enhancing oil recovery will cause t hese individuals and corporate bodies to place more interest in producing and obtaining oil by enhanc ed oil recovery. It is paramount that tax policies which provide a sort of constraint to the deve lopment and progress of enhanced oil recovery in Nigeria be annulled or adjusted to reduce the degree of uncertainty perceived by the private sector in future enhanced oil recovery activities. Implementation of a new tax alternative will

 Journal of Economics and Engineering, ISSN: 2078-0346, February, 2010 also affect private sector decisions on the development of specific enhanced oil recovery reservoirs or modify decision regarding which process should be installed. Some of the new proposals could be: (i) Alternative regulated market price level; (ii) Price and/or purchase guarantees for enhanced oil recovery over the lifetim e of a producing facility. (iii) Public investment subsidies which ensures that Government of Nigeria pays a certain percentage of private investment costs; (iv) Alternative taxation policies including changes in depreciation methods, in vestment tax credit rates and expensing rules for various categories of investment and operating cos t. (v) Alternation of lease terms for reservoirs located on the public domain to en courage enhanced oil recovery installations at an optional point in the production time horizon. This requires data not only on enhanced oil recovery costs and production profil es but on synergistic effect with primary and secondary production. These suggestions are proposals which attempt to reduce the effects of unfavoura ble tax policies on the private decision process, modify private market decision and remove barriers to enhanced oil recovery developments. TECHNOLOGICAL CONSIDERATIONS It is also very important to by enhanced recovery. This means that enhanced oil and provided to private and public bodies at the intensive training and recruitment of personnel who overy process and ensure that there is optimal invest in technology that is needed to produce oil recovery equipment and machinery should be obtained subsidized prices and there should be investment in will monitor every stage of the chosen enhanced rec production of the crude oil.

More research projects sponsored by both the Nigerian Federal Government and pri vate bodies, aimed at discovering and improving new enhanced oil recovery processes which yie ld greater oil production, should be carried out periodically and the discovered technology imp lemented and then exported to other nations which do not possess such knowledge. The sooner this i s done, the sooner Nigeria will begin to reap the benefits both technological and economic, of enha nced oil recovery. ENVIRONMENTAL CONSIDERATIONS It is beneficial for Nigeria to seriously consider the environmental issues whic h arise as a result of

the implementation of enhanced oil recovery in oil -producing communities. As me ntioned in the preceding chapter, the oil-producing regions of Nigeria are at the moment in strife over w hat is perceived as the indifference of both the Federal Government and the exploration companies over t he low living standards in these areas. There are complaints of the non-availability of basic education, motor-able roads, electricity, primary health care services, jobs for the indigenes, pipe-borne wa ter and other community services in these oil-producing regions. This has led to violence and hostage -t aking incidents in the NigerDelta. There has also been wide-spread vandalism of pipelines and other installa tions. These have led to the incessant halting of oil producing operations in the Niger-Delta which Niger ia dollars each day in lost man-hours and halted oil production. As a solution to this, it is suggested that the Federal Government of Nigeria and the various indigenous and multinational exploration companies in th ese impoverished oilproducing regions of Nigeria take serious actions aimed to improve the standards of living of the inhabitants and as a results, provide an ultimate solution to the on-going dispu tes in these region. These include the building of schools, hospitals and clinics and the provision of basi c social amenities which would make life much easier to live. It is also paramount for the Federal Government of Nigeria to consider other env ironmental issues which enhanced oil recovery methods impose on these oil-producing communities. B ecause enhanced oil recovery ensures that plenty more time is spent at a producing well than during primary recovery, there is that fact that more chemicals are used, there is more noise pollution and there are more emissions in form of exhaust gases from these producing fields and these can have a drastic effect in areas where urban development encroaches on these established oil fields. Efforts must therefore b e made to limit the negative effects of these potentially hazardous discharges on both the workers a nd the inhabitants in the urban areas. Chemicals used in enhanced oil recovery must be handled and stored in specific s torage tanks to avoid leakages into the soil and underlying aquifers and also to avoid the risk of explosion. These storage tanks must be inspected regularly to check the risk of run-off and any chemicals which are no longer

 Journal of Economics and Engineering, ISSN: 2078-0346, February, 2010 needed must be carefully treated before they are released into the surrounding w ater or atmosphere. Better still, isolated sites should be provided for the storage of these no-long er useful, treated chemicals. Emissions (dust, exhaust, off-well gases) must certainly be present and these mu st be monitored carefully to determine the compositions and the levels of these emissions and also to dete rmine their duration periods and hence prove that there are no environmental degradations, or these d egradations are kept to the barest minimum. Work done by the millennium Energy Inc. in the United States of America shows that much of the CO2 emitted can actually be re-used in CO2 flooding and the company is storing CO2 in the reservoirs as a means of taking the greenhouse gas out of the atmosphere. It is hoped that in the near future, this technique will become more widespread in use for reservoirs which p roduce below the economic limit. The pathogenesis of all microbial cultures used in enhanced oil recovery must in fection by microbes and hence avoid the possibility of creating epidemics among the in habitants of the oil-producing community. The health and safety of the workers must also be ensured with the ad equate provision of safety clothing, helmets, both, goggles etc. The exploration companies must also ensure that the men are taught First Aid, fire drill and how to handle equipment and chemicals. This wil l prevent them from being nuisances to themselves and their fellow-workers. There should also be regular m edical check-ups to determine the working fitness of the men, and treatment carried out as soon as p ossible whenever the treatment is necessary. There should also be studies to determine and control th e noise levels which are as a result of oil-production as they are a constant irritant to the host commun ities and may actually injurious to the inhabitants. It was mentioned earlier that for enhanced oil recovery methods like polymer flo oding and steam injections, about 20 barrels of fresh water are required to recover I barrel of crude oil. It is therefore imperative that the exploration companies and the Federal Government of Nigeria look into ways of obtaining alternative sources of water as over-pumping of the fresh water aquife rs will lead to subsidence of lead and hence a reduction in the amount available to humans and animals spec ific studies should be carried out to determine how much water is needed in the enhanced oil recovery, processes to be carried out at specific sites. Studies must also be carried out to determine the possible effects of enhanced o il recovery methods

on the land with a view to reducing the negative effects. The Federal Government of Nigeria should pass into law certain legislature which seriously restrict the; (i) Composition and amount of emission sent into the atmosphere; (ii) Disposal of toxic, useless chemicals and other solid or liquid wastes and (iii) The noise levels emanating from the oil fields. Then, the Government shoul d slap hefty fines on both the multi-national and indigenous oil exploration companies which break these laws. These fines could be in form of cash or some kind of community services to the host communit ies to act as compensation. Clauses should also be stated in the contract of lease which threa ten to withdraw the leases which are issued out to the exploration companies in the event that envir onmental regulations (which should be clearly defined) are disregarded. LEGAL CONSIDERATIONS To ensure economic activity of any kind, it is imperative that the legal environ ment of the Federal Republic of Nigeria is conducive for business. By this means, the legal environm ent must be suitable for the exploration companies to operate in. the terms of lease issued must fair to all parties and the law must prevail without bias, over all the parties involved in enhanced oil recovery. Wh en ever necessary, justice not be denied or delayed and the Government must ensure that law and order are m aintained by apprehending and punishing offenders of the various legislation and laws which g uide production by enhanced oil recovery. Community participation should also be encouraged to supp ort officials of the Government law enforcement agencies-setting up locally organized and Governmentrecognized vigilante groups will go some way in ensuring safety of life and property in both the dril ling areas and the urban settlements which host them. Before enhanced oil recovery is carried out in Nigeria, it will be very relevant for the representatives of the exploration companies to have a firm grasp of the various laws and regula tions which govern the drilling and exploration of minerals within the Federal Republic of Nigeria and any unclear or misunderstood areas of the constitution relating to drilling and exploitation sh ould be interpreted by the legal representative(s) of the federal Government. By so doing, the responsibili ties of the Federal Government and the exploration companies are well known to each party and to avo id legal disputes, they both work to live up to these responsibilities. Each party should be well aware of the fact that failing to fulfill its duties could lead to legal action and the some instances, production could b e disrupted during the

 Journal of Economics and Engineering, ISSN: 2078-0346, February, 2010 period that the court cases last. Such occurrences would surely have a negative effect on the incremental oil production obtained from enhanced oil recovery. It has been seen that rule of capture can result in great loss of resources and excessive production of oil and as a result, legislation should been enacted to modify it. To prevent excessive drilling, the Government should authorize regulatory commissions to promulgate well spacing ru les, limiting the number of wells that can be drilled in a given area. As a general rule, it recom mended that there be only one well every 40 acres. Well spacing alone might not be enough to overcome the problem of excessive prod uction, as a producer might continue to produce at an excessive rate in such a manner as to d eplete prematurely the natural drive of the reservoir or in quantities the market might not be able to absorb. As a result, the Federal Government should set limit to the amount of oil that produced in any mo nth from a field or well. Also, national regulation of well spacing and production can cause significant p roblems that must be overcome by the producers themselves or by additional regulation. If there can b e only one well within a given area and there are several parcels of land with different owners, some det ermination must be made as to who will be able to drill a well and who will be entitled to receive proce eds from the production from the well. The integration of the various interests within the area for the purpo se of creating a drilling unit for development of a well and sharing of the proceeds is known as pooling . The Federal Government should have compulsory pooling statutes which can apply when the parties involved are u nable to reach an agreement for voluntary pooling. Laws should also be passed to make enhanced oil recovery a compulsory technique for oil production in Nigeria and the leases of operators who fail to comply with these directives should be withdrawn. CONCLUSIONS AND RECOMMENDATIONS As one of the world s largest producers and exporters of crude oil, Nigeria stands to gain both economically and technologically if and when the country takes concrete steps to produce additional quantities of oil through enhanced oil recovery techniques. Economically, assumi ng a fairly stable price of enhanced oil recovery equipment and other chemicals and an oil price in the gene ral range of $50 -$70 a barrel, also with the potential of 66% (27.72 Billion Barrels), the country will

potentially gain a lot of money accrued from internal sales and exports to other countries. Technologically ,the country will gain the infrastructure and experience which will be required to further research better ways of obtaining oil through enhanced recovery techniques. However enhanced oil recovery is highly capital intensive and special attention should be paid to the technological development and advancement (including specially trained manpower) in order to determine the best methods of enhanced oil recovery to use in the oil producing regions of Nigeria Having considered the environmental, technological, legal and economic issues wh ich affect the adoption of enhanced oil recovery techniques in Nigeria, it is recommended that: Since enhanced oil recovery is very capital intensive and technically demanding, desired projects will require extensive economic evaluation and forecasting .This is because of t he fact that in spite of the large initial investments and careful monitoring of the methods during applicati on, the rate of incremental oil recovery is low and extended over long periods of time .i.e. there is low ra te of return on initial investment; Emphasis should be placed on the training and acquisition of highly skilled prof essionals because the skilled man power is required at all phases of the implementation of enhance d oil recovery; The exploration companies and the federal government of Nigeria should encourage research into cost effective and improved enhanced oil recovery techniques with the aim of inc reasing the amount of oil recovered; Research should also be made into developing and improving enhanced oil recovery techniques so as to make them environment-friendly so as to reduce the hazards to humans, a nimals and plants associated with waste products and toxic emissions; Reservoir geology and other vital characteristics should be known before the pro jects are undertaken so that the specified enhanced oil recovery technique required can be implemented instead of using trial and error methods which can further increase production costs; Instead of just abandoning wells which can no longer produce commercial quantiti es of oil using primary and secondary recovery, the operators should make legal arrangements to lease out the wells to the operators of smaller exploration companies who will produce the wells as mar ginal wells.

 Journal of Economics and Engineering, ISSN: 2078-0346, February, 2010 REFERENCES 1. Igun, T. Adegboyega: A Feasibility Study on the Application of Enhanced Oil Recov ery Processes in the Niger Delta , University of Ibadan, Sept., 1997. 2. Iyoho, A. W.: Selecting Enhanced Oil Recovery Processes , World Oil, Nov. 1978. 3. Ofurhie, M. A., et al.: How Nigeria Looked at Fiscal Terms Prospects , Oil and Gas Journal, Nov. 1991. 4. Brasher, J. P. et al.: Incentives, Technology and EOR; Potential for Increased Oi l Recovery at Lower Oil Prices , JPT, February, 1989, Vol. 41, No 2. 5. Jubril Aminu: Oil and Gas Industry in the 1990 s in the Production Country of Niger ia , 13th WPC, Buenos Aires, 1991. 6. Omole, O.: Enhanced Oil Recovery Possibilities in Nigeria , Proceedings of Workshop : Developments of Petroleum and Petrochemical Industries in Nigeria; Published by Industrial Coordination Unit. Faculty of Technology, University of Ibadan, 1987. 7. Iwayemi, A.: Present Pattern of Energy Use in Nigeria , Department of Economics, University of Ibadan, Nigeria. 8. US Department of Energy: Enhanced Oil Recovery Potential in United States of Amer ica , http://www.eia.doe.gov

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