Upstream Oil and Gas Overview: Reserve Growth For Higher Recovery Efficiency (2009)

Upstream Oil and Gas Overview
Reserve Growth for Higher Recovery Efficiency

February, 2009 Mark H. Holtz
Upstream Overview Business Confidential
Praxair At A Glance
A Fortune 500 company with 2008 sales of 10.8 billion $. One of the largest industrial gases companies worldwide and the largest in North and South America Operations in more than 30 countries 28,000 employees One million customers worldwide
Upstream Overview Business Confidential 2
Praxair Industrial Gases Reach World-Wide
North America
Europe Asia
South America
Praxair operates in countries shaded green

Praxair Core Technologies

Cryogenic air separation Non-cryogenic air separation Hydrogen production Carbon dioxide purification Gas-liquid separations Oxidation technology (combustion) Atmosphere control Gas dissolution Refrigeration
Praxair Gas Supply Options

On-Site/Pipeline Supply Nitrogen, oxygen, hydrogen 15 + year supply contracts Designed & operated for reliability
Liquid Supply Nitrogen, oxygen, argon, CO2, helium, H2 Specialized cryogenic distribution equipment
Packaged Gases Welding, medical, specialty gases Cylinders for the retail market
Upstream Oil and Gas

Enhanced Oil Recovery
Over 30 years experience with Gas Displacement Recovery (GDR)
Nitrogen Carbon Dioxide Methane
More than 25 projects
Well Stimulation Services CO2/N2 EOR Services

Pilots and huff-n-puffs CO2 Capture & Purification
Exxon Hawkins Field, 65 MMscf/d 2,000 psi
GDRs Place in the Market

Number 1 method to add light oil reserves. in the US chemical and thermal EOR projects have been in constant decline since the mid 1980s with gas injection methods as the preferred recovery Methods (Dr. Leonid Surguchev et al. World Petroleum Congress 2006)
Historical US EOR Production

500000 450000
Oil production (STB/D)
400000 350000 300000 250000 200000 150000 100000 50000 0 1985 Thermal (STB/D) Chemical (STB/D) Gas (STB/D)
1990
1995
2000
2005
2010
Years
7
N2 Reserve Growth Applications

Pressure Maintenance
Pressure maintenance condensate and retrograde condensate gas reservoirs
Miscible Displacement Gas Assisted Gravity Drainage Immiscible Displacement

Oil Gas cap gas
Mixed Gas Applications

Driving agent for slug/buffer Mixed gases for density control
Gas Condensate Pressure Maintenance

Effects of Pressure Depletion:
Reduction in gas permeability and well productivity Lower ultimate hydrocarbon recovery by 10 to 40 % Allows water encroachment
Application Screening Criteria:

Dew point pressure High condensate yield typically > 175 bbl/MMSCF produced, High liquid dropout rate with liquid condensation from 20 to 40 % of the hydrocarbon pore space.
Anschutz Ranch E. Field

Gas Condensate Pressure Maintenance Example
Reservoir Characteristics
1) Dew point pressure is near the original reservoir pressure, 2) Condensate yield of 175 bbl/MMSCF produced, 3) high liquid dropout rate 20 to 40 % of the hydrocarbon pore space.
CARTER CRK
Nugget ss, WY 10 % porosity 3 md perm. 5,600 psi injection pressure N2 & CH4 injected Pi = 5,310 psi Pdew= 5,080 psi
OVERTHRUST BELT
WHITNEY CANYON RED CANYON RYCKMAN CRK CLEAR CRK PAINTER E PAINTER
Wyoming
Utah
CR
FO RD
YELLOW CRK
AW
GLASSCOCK HOLLOW
ANSCHUTZ RANCH PINEVIEW ELKHORN LODGEPOLE A OK AR BS A
ANSCHUTZ RANCH E.
DARB Y
CAVE CRK
MTNS
0 6 12 18
TA UIN
MILES
From Kleinsteiber et al., 1983

10
Anschutz Ranch E. Field

Gas Condensate Pressure Maintenance Example
Cumulative Oil Recovery, %OHIP
Injection scheme
1) Inject 0.1 HCPV of 35% N2 and 65% wet gas 2) Chases with pure N2
100 90 80 70 60 50
9 COMP
80-acre inverted 9 spot pattern 50 MMscf/day 6,200 psi injection pressure
40 30 20 10 0 0.0 0.5 1.0
17 COMP
1.5
2.0
Cumulative N2 Injected, HCPV

Fig. 3-Recovery comparison from 1-D nitrogen displacement simulations
From Kleinsteiber et al., 1983 Wendschlag et al., 1983

N2 Miscibility Displacement
Results in high displacement Injector efficiency at the pore level There are three types of miscibility including;
First-contact miscibility Multi-contact miscibility Vaporizing masstransfer miscibility
Producer
Praxair
12
Jay Field Miscible WAG

N2 miscible WAG 3:1 ratio Line drive pattern Pi = 7,850 psi, Tr = 285 F 51 API gravity oil
0 52
00 51
Well pattern and Structure
Phi= 0.14, K= 20 md Reserve growth of 10 -13% OOIP (80MMSTB)
Oil producer WAG injector Water injector
0 30 15
0 153 0
151 00
Lawrence et al., 2003

Gas Assisted Gravity Drainage

The Most Common Gravity Drainage Processes are:
Double Displacement Process Oil Saturation 2000-01-01
1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0
Gas assisted gravity drainage ( no water present) N2 injector Double displacement process ( water present)
Producer
Double Displacement Process (DDP). The process of gas displacement of a water invaded oil column. The double displacement process consists of injecting gas up-dip and producing oil down-dip
14
Gravity Drainage Double Displacement Process (DDP)

Up dip gas injection into a dipping reservoir is one of the most efficient recovery methods.
Recovery efficiencies of 85 % to 95 %
Increases Sweep Efficiency Increases Displacement Efficiency

Oil film flow is an important recovery mechanism
Film flow connects the isolated blobs of residual oil in the presence of gas
Strong water wet Oils with positive spreading coefficient
Modified from Ren et al., 2000)

Hawkins Field Double Displacement Process

Double Displacement Process Schematic
Gas Oil
Discovery 1940
Project Start-up 1994

Gas Injector
Current
Gas Injector Shut In
Ultimate Drainage
Gas Injector
Asphalt
Water
Oil Producer
Water-invaded Oil Column
Shut In
Shut in Oil Producer
Shut In
Shut in
Water Withdrawal Well
Oil Producer (Ultimate Drainage)
Lawrence et al., 2003

Immiscible Flooding
Recovery Mechanisms Oil Swelling Oil Viscosity Reduction 3 Phase Flow Oil Mobilization (Kr effects) Improved Volumetric Sweep Efficiency
N2 occupies 23% more space than CH4 at set pressure N2 and CH4 Viscosities are similar
17
Gas Cap Injection
Modified from Fernandez and Pascual. 2007 Spe # 108031

Mixed Gas Applications N2 as Driving Agent (chase gas)

Nitrogen CO2 Flooding
In a CO2 flood, the use of nitrogen to displace the CO2 slug and its miscible oil bank Might be desirable due to the lower cost of the nitrogen
Viscosity of oil is reduced providing more efficient miscible displacement.
Air Separation Plant Carbon Dioxide Injection Well Injection Compressor Centrifugal Air Compressor Produced Fluids (Oil, Gas and Water) Separation and Storage Facilities
Production Well
Nitrogen Displacer Gas
CO2 Slug
Miscible Zone
Oil Bank
Additional Oil Recovery Barsonic Energy Technology Center
18
Project Types
Full Field Floods
Cryogenic plant
Single Reservoir Compartment

Small cryogenic nitrogen plant Non-cryogenic membrane plant
Pilot Projects
Small cryogenic nitrogen plant Liquid transport vessels
Offshore Gas Lift Applications

Membrane plant for platform Liquid transport vessels for platform or ship
Huff n Puff Applications

Pumping equipment Liquid transport vessels
The Key to Full Field Projects: Reservoir Characterization Work Flow

Start
Determine Reservoir Architecture Determine Reservoir Architecture
Feed back Loop
Establish Fluid-Flow Trends Establish Fluid-Flow Trends
Develop a Reservoir Model Develop a Reservoir Model
Identify Reserve Growth Potential Identify Reserve Growth Potential
20
GDR Pilot Project Design For Reserve Growth

Key is Proper Planning
Determine goals, objectives, and strategy
5 Major Steps Include:

1. Initial reservoir characterization
Identifying reserve growth method
2. Monitoring program 3. Facilities design 4. Proper implementation 5. Postmortem evaluation
21
Praxairs Portfolio of GDR Projects

Miscible Displacement
Block 31, TX, USA Painter Field, WY, USA Binger, OK, USA Flomaton, AL, USA Vealmoor Field, TX USA Odessa, TX USA Douglas, WY, USA Glenrock WY, USA
Amoco 50 MMcfd / 6000 psig
Gas Assisted Gravity Drainage

Hawkins, TX, USA Samaria, Mexico
Pressure Maintenance
Samaria, Mexico Anschutz, WY, USA Bakersfield CA, USA Iraan, TX, USA Tatums, OK, USA Colorado, USA 2 Kansas, projects USA
Enhanced Coalbed Methane

Farmington, NM, USA Trinidad, CO, USA
Pemex 190 MMcfd / 3000 psig

22
Project Example Samaria Oil Field

190 MMcfd nitrogen at 3,000 psig 15 year injection requirement Remote location Praxair Scope
Samaria
Turnkey project Build / Own / Operate Pipelines to injection wells 24 month project schedule
Mexico
Salama nca, Guanaj uato Tula, Hidalgo
Cadereyta, NL Ciudad Madero, Tamaulipas
Minatitlan, Vearcruz TABASCO STATE PEMEX SOUTH REGION 25 KMS FROM VILLAHERMOSA CITY
PEMEX projects that N2 will double the ultimate recovery

Project Example - Samaria Oil Field

Project Management & Execution Design Engineering Equipment Construction Risk Mitigation
24
Advantages of Nitrogen Gas Displacement Recovery (GDR)

Proven Oil Recovery Method Cost Effective On Site Nitrogen Plant Nitrogen
Can replace recycle hydrocarbon gas Is inert Is non-corrosive Is dry Is oxygen free
25
CO2 & N2 Well Stimulation Services

Benefit of Using Gas
Solubility and viscosity Less damaging Easier cleanup Greater effective frac length Foaming ability Excellent surface tension reduction Praxair Services Supply liquid CO2 & N2 Logistic services Dedicated primary pressure pumping Strategically located plants
Well Stimulation Services

Gas Supply and Service Provider
Well Head
Pump Trucks Praxair N2 2 / CO2 2 Vessels
Water Tanks Proppant Truck Praxair Pump Trailer
N2 // CO2 N2 CO2 Vessels Vessels
27
Praxair EOR Services

Identification of Potential Oil and Gas Fields for Gas Displacement Recovery Assist & Facilitate with Project Development
Reservoir engineering services Selection of gas injectant Recovery process simulation Optimization of gas supply system
Short Courses and Seminars on GDR Support EOR Pilot Projects Provide Gas Injection Requirements
28
Praxair CO2 EOR Pilot Projects

On Site Storage Pumping and Heat Equipment
Injection Analysis
29
CO2 Sources for Capture and Purification

Praxairs Approach: Choose a source with the cleanest gas stream possible which meets the supply needs.
Typical Sources Refineries Natural sources Natural gas processing Chemical plants Ethanol plants Ammonia fertilizer plants Grain fermentation Hydrocarbon combustion
Summary: N2 Reserve Growth

Field
Chunchula Block 31 Szeged Moravaros Jay/(LEC) Lake Barre Fordoche Wilcox 8 & 12 Fordoche Wilcox 5 Field B* Anschutz Ranch East
EOR Application
Pressure maintenance Miscible displacement N2 Pressure maintenance Miscible displacement Pressure maintenance Miscible displacement Pressure maintenance Immiscible displacement Pressure maintenance
Additional Recovery (fraction OHIP)

0.31 0.6 (total) no secondary 0.12 0.13 0.19 0.195 0.19 0.46 0.36 0.45-.53
* From Clancy
31
Conclusions
Future Reserve Additions in Large, Light Oil, Mature Fields will Primarily come from GDR. Reserve Additions Will Occur Through: 1. Pressure maintenance 2. Miscible displacement 3. Immiscible displacement 4. Gas assisted gravity drainage 5. Mixed gas applications: driving agent/density control GDR Typically increases both Sweep and Displacement Efficiency in Oil and Gas Reservoirs. Reserve Growth Targets can range from 10 to 45 % of OOIP/OGIP
Praxair Contacts
Mark H. Holtz,
Director, EOR Global Business Development mark_holtz@praxair.com, Cell 512-217-4833
Venezula
Antonio Chacin, antonio_chacin@praxair.com, Cell 584146450593
India

Colombia
Alejandro Aldana, alejandro_aldana@praxair.com Leonardo Pinzon, leonardo_pinzon@praxair.com
Atul Nagarkar, atul_nagarkar@praxair.com Subhash Kaipa, subhash_kaipa@praxair.com
Mexico
Arturo Garcia, arturo_garcia@praxair.com Amado Polo, amando_polo@praxair.com
China
Jet Yang, jet_yang@praxair.com
Eastern Europe
Nevio Corna, nevio_corna@praxair.com, Cell +393473922524
South America
Marcelo Maron marcelo_maron@praxair.com
Argentina
Dario Bompani, dario_bompani@praxair.com, Wk +541147366104

Upstream Oil and Gas Overview: Reserve Growth For Higher Recovery Efficiency (2009)

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Upstream Oil and Gas Overview: Reserve Growth For Higher Recovery Efficiency (2009)

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Upstream Oil and Gas Overview

Reserve Growth for Higher Recovery Efficiency

Upstream Overview Business Confidential

Praxair Industrial Gases Reach World-Wide

Praxair operates in countries shaded green

Praxair Core Technologies

Praxair Gas Supply Options

Upstream Overview Business Confidential