Enhanced Oil Recovery (EOR)

Resultados y Tendencias en el
Mundo
May 21, 2008
Chuck Norman
cnorman@tiorco.com

TIORCO Inc.
 Agenda

Oil Supply/Demand and Distribution of Oil

Reserves
Oil Recovery Mechanisms and EOR Targets
Types of EOR Technologies and EOR Candidates
Worldwide EOR Production
Average EOR Recovery Factors
EOR Economics
Reasons for EOR Failures
Conclusions

TIORCO, Inc The Improved Oil Recovery Company

 Situacion Actual, Mayo 2008

Aspo, la Association for The Study of Peak Oil,

radicada en Europa, con un surcursal en Bs. As.
- La crisis es peor de lo que imaginamos. No
existen posibilidades de incrementar la
produccion mundial por encima de los 85 millones
de barriles por dia.
- Kajel Aleklett, de ASPO
Se calcula que cerca de 50 regiones, entre las que
figura EE.UU, el Mar del Norte y hasta Argentina, ya
alcanzaron la cima y, por lo tanto, produciran cada
vez menos petroleo.

Clarin, May 4, 2008 TIORCO, Inc The Improved Oil Recovery Company
 EOR and Price Expectations

2002: la International Energy Agency (IEA) y

el Dept. of Energy (DOE) de EE.UU proyectan
el precio del barril entre US$22 y US$27 en
2020.

2009 Forecasts
- Lehman Brothers: us$80
- Goldman Sachs: us$200

TIORCO, Inc The Improved Oil Recovery Company

 Oil Consumption and Industrialization
Oil Consumption Increases Fastest During Early Industrialization
35

30

25
Per Capita (Bbls / Year

U.S.
20

15
Japan South
10
Korea
5
China India
0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

TIORCO, Inc The Improved Oil Recovery Company

 Chinese Oil Imports

3,000
50
Net Crude Imports
45
2,500 NYMEX WTI
40
2,000 35

US$/bbl
30
kb/d

1,500
25
1,000
20

500 15

10
0
5
-500 0
1Q93 1Q94 1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05

TIORCO, Inc The Improved Oil Recovery Company

 U.S. Petroleum Production and Imports
12
Domestic Petroleum
10 Production
Petroleum (MM BBLS/Day)

4
Imported Petroleum

0
48 53 58 63 68 73 78 83 88 93 98
Year

TIORCO, Inc The Improved Oil Recovery Company

 Argentina Monthly Oil Rate vs Time
William Cobb (2006)

1,000
900
1,000 BO
800
700
600
500
400
300
200
100
0
95

96

97

98

99

00

01

02

03

04

05

06
19

19

19

19

19

20

20

20

20

20

20

20
TIORCO, Inc The Improved Oil Recovery Company
Regional Distribution of Global Oil Reserves
Others North Sea
112B Bbls - 10% 14B Bbls - 1%
North America
62B Bbls - 4%
Middle East
West Africa 734B Bbls - 64%
46B Bbls - 4%

North Africa
60B Bbls - 5%
South America
62B Bbls - 5%

FSU
78B Bbls - 7%

TIORCO, Inc The Improved Oil Recovery Company

 Oil Recovery Mechanisms
CONVENTIONAL RECOVERY

PRIMARY
RECOVERY Natural Artificial Lift
Flow (Pump, Gas Lift, etc.)

SECONDARY
RECOVERY Pressure Maintenance
Waterflood
(Water, Gas Reinjection)

EOR

TERTIARY
RECOVERY Thermal Solvent Chemical Other

Adapted from the Oil & Gas Journal, Apr 23, 1990 TIORCO, Inc The Improved Oil Recovery Company
 Expected Oil Recovery Efficiencies
OOIP (%)
PRIMARY METHODS
Liquid and Rock Expansion Up to 5
Solution Gas Drive 20
Gas Cap Expansion 30
Gravity Drainage 40
Water Influx 60

SECONDARY METHODS Up to 70
Gas Reinjection
Waterflooding

Sandrea, Oil & Gas Journal (Nov 2007) TIORCO, Inc The Improved Oil Recovery Company
 EOR Targets: % OOIP

LIGHT OILS HEAVY OILS TAR SANDS

Primary Primary
25% OIP 5% OIP
EOR Target Secondary EOR Target
45% OIP 5% OIP 100% OIP
Secondary
30% OIP EOR Target
90% OIP

Assumes Soi 85% PV and Sw = 15% PV

Thomas, Oil & Gas Science and Technology (2008) TIORCO, Inc The Improved Oil Recovery Company
 EOR Targets, 2005
Cumulative Production Discovered Unrecoverable by
183 Billion Barrels Current Technology
377 Billion Barrels
(45% already
abandoned)

Target for EOR

Technologies

Target for Advanced

Proven Reserves
22 Billion Barrels Exploration Technology
Undiscovered Recoverable
by Current Technology Undiscovered Unrecoverable
30 Billion Barrels by Current Technology
37 Billion Barrels

US Department of Energy (2005) TIORCO, Inc The Improved Oil Recovery Company
 EOR Targets, 2007
United Rest of TOTALS
States Canada World (B bbls)
Cumulative Production 234 31 813 1,078
OPEC (Middle East) -- -- 662 662
Other Conventional 19 7 378 404
Deepwater 8 3 50 61
Arctic 5 3 110 118
Enhanced Oil Recovery 76 6 510 592
Extra Heavy -- 167 227 444
Oil Shale Extract 500 4 200 704
Exploration Potential 83 15 660 758
TOTALS (B bbls) 925 236 3660 4,821

Jackson, JPT (2007) TIORCO, Inc The Improved Oil Recovery Company
 Definition of EOR

Oil Recovery by Injection of Fluids

not normally present in the reservoir
Excludes waterflooding

TIORCO, Inc The Improved Oil Recovery Company

 Thermal EOR Methods

THERMAL

Hot Water Steam In-Situ Elec. Heat

Steam Conductive Hi Press.

CSS Flood SAGD Heating Forward Reverse Air Inj.

Frac VAPEX Dry

Non-Frac VAPEX + Steam Wet

SAGP W / Additives

THAI

CAPRI

TIORCO, Inc The Improved Oil Recovery Company

 Non-Thermal EOR Methods

NON-THERMAL

Imm. Gas Other

Miscible Chemical Drives

Slug Process Polymer CO2 MEOR

Enriched
Gas Drive Surfactant Flue Gas FOAM

Vaporizing
Gas Drive Alkaline Inert Gas

CO2 Miscible Micellar

N2 Miscible ASP

Alcohol Emulsion

TIORCO, Inc The Improved Oil Recovery Company

 EOR vs. Depth
Depth (feet)
EOR Method 2,000 4,000 6,000 8,000 10,000

Hydrocarbon
Miscible
Deep enough for required pressure
Nitrogen and
Flue Gas
Deep enough for required pressure
CO2
Miscible Deep enough for required pressure
Surfactant Limited by temperature
Polymer

Polymer Limited by temperature

Alkaline

Fireflood Deep enough for required pressure

Steam Drive

Good Possible Fair Difficult Not Feasible

Dr. Larry Lake, Oilfield Review (Jan. 1992) TIORCO, Inc The Improved Oil Recovery Company
 Oil Resources by Depth
TOTAL 12.8 Trillion Barrels
DEEP 21%
2.7 Trillion Bbls
(>10,000 Ft)

INTERMEDIATE 45%
5.7 Trillion Bbls
(3,500 10,000 Ft)

SHALLOW 34%
4.4 Trillion Bbls
(<3,500 Ft)

Sandrea, Oil & Gas Journal (Nov 2007) TIORCO, Inc The Improved Oil Recovery Company
 Distribution of Global Oil Reserves by Depth
Remaining Reserves (1P), 2006
Conventional Non-Conventional

Billion Bbls of Oil % Billion Bbls of Oil %

Shallow 163 14 293 100
(<3,500 ft)

Intermediate 663 58 -- --
(3,500 10,000 ft)

Deep 321 28 -- --
(>10,000 ft)
1,147 100 293 100

HIS, Credit Suisse TIORCO, Inc The Improved Oil Recovery Company
 EOR vs. Viscosity
Oil Viscosity (centipoise at reservoir conditions)
EOR Method 1.0 100 10,000 1,000,000

Hydrocarbon
Miscible
Nitrogen and
Flue Gas
CO2
Miscible
Surfactant
Polymer

Polymer

Alkaline

Fireflood

Steam Drive

Good Possible Fair Difficult Not Feasible

Dr. Larry Lake, Oilfield Review (Jan. 1992) TIORCO, Inc The Improved Oil Recovery Company
 Gravity Distribution of Worlds Oil
TOTAL 12.8 Trillion Barrels
LIGHT 22%
2.8 Trillion Bbls (>35 gravity)

MEDIUM 44%
5.6 Trillion Bbls (26-35 gravity)

HEAVY 1%
1.4 Trillion Bbls (<26 gravity)

EXTRAHEAVY 23%
3.0 Trillion Bbls (<10 gravity)

Sandrea, Oil & Gas Journal (Nov. 2007) TIORCO, Inc The Improved Oil Recovery Company
 EOR vs. Permeability
Permeability (md)
EOR Method 10 100 1,000 100,000

Hydrocarbon
Miscible
Not critical if uniform
Nitrogen and
Flue Gas
Not critical if uniform
CO2
Miscible High enough for good injection
Surfactant
Polymer

Polymer

Alkaline

Fireflood

Steam Drive

Good Possible Fair Difficult Not Feasible

Dr. Larry Lake, Oilfield Review (Jan. 1992) TIORCO, Inc The Improved Oil Recovery Company
 Chemical EOR Processes

Typical Ultimate
Recovery Typical Agent
Process (%OOIP) Utilization
Polymer 5 1 lb polymer /
Incremental bbl

Micellar / Polymer 15 10-25 lb surfactant /

Incremental bbl

Alkaline / Polymer 5 35-45 lb surfactant /

Incremental bbl

TIORCO, Inc The Improved Oil Recovery Company

 Gas (Miscible and Immiscible)

Typical Ultimate
Recovery Agent
Process (%OOIP) Utilization

Miscible 10 - 15 10 MCF /
Incremental bbl

Immiscible 5 - 10 10 MCF /
Incremental bbl

TIORCO, Inc The Improved Oil Recovery Company

 Thermal Recovery Processes

Typical Ultimate
Recovery Agent
Process (%OOIP) Utilization

Steam 50 - 65 0.5 bbl /

(drive and soak) Net Incremental bbl
Combustion 10 - 15 10 MCF air /
Incremental bbl

TIORCO, Inc The Improved Oil Recovery Company

 EE.UU EOR Production, 2000
800
Nitrogen Injection
HC Gas Injection
Production (M BBLS/Day)

600

Flue Gas Injection CO2 Injection

400

Thermal
200

Chemical
0
1984 1986 1988 1990 1992 1994 1996 1998 2000

Year

Moritis, Oil & Gas Journal (2000) TIORCO, Inc The Improved Oil Recovery Company
 EE.UU EOR Production, 2008
800
TOTAL

600
Production (M B/D)

Thermal
400

Gas
200

Chemical
0
1986 1990 1994 1998 2002 2006

Thomas, Oil & Gas Science and Technology (2008) TIORCO, Inc The Improved Oil Recovery Company
 Est. Worldwide EOR Production, 1990
(M Barrels / Day)
Country Thermal Miscible Chemical EOR Total %

USA 454 191 11.9 656.9 42

Canada 8 127 17.2 152.2 10

Europe 14 3 -- 17.0 1

Venezuela 108 11 -- 119.0 7

Other S.A. 2 NA NA 17.0 1

USSR 20 90 50.0 160.0 10

Other (estd.) 171* 280** 1.5 452.5 29

Total 777 702 80.6 1,574.6 100

SOURCE: Oil & Gas Journal (1990)

* Mainly Indonesia
** Mainly Algeria and Libya TIORCO, Inc The Improved Oil Recovery Company
 Est. Worldwide EOR Production, 2007
Other Canada
17,800 B/D 325,500 B/D
22% 14%

Venezuela Indonesia
365,600 B/D 220,000 B/D
16% 10%

China USA
166,900 B/D 649,300 B/D
7% 30%

Mexico
500,000 B/D
22%
Percentages are those of total
Thomas (2008) EOR production of 2.5 MM B/D TIORCO, Inc The Improved Oil Recovery Company
 Canada EOR, 2006

1 2
4 3
3
21 2
Acid Gas 10 1
CO2
Combustion
Hydrocarbon (Natural Gas)
Steam
Nitrogen Oil & Gas Journal (April 2006) TIORCO, Inc The Improved Oil Recovery Company
 EE.UU EOR, 2006
11 Alaska

5 3

3
1 9 3

1 1 1
39
2 5 1

6
2 14 50 1 1
Steam
Water 2 1
Combustion
CO2
Gas
Oil & Gas Journal (April 2006) TIORCO, Inc The Improved Oil Recovery Company
 Central and South America EOR, 2006

8 5
38
3
2

CO2
Hydrocarbon
Steam
Nitrogen

Oil & Gas Journal (April 2006) TIORCO, Inc The Improved Oil Recovery Company
 Rest of World EOR, 2006

1 CO2
1 17 2 19
1 Combustion
5 Steam
Microbial
a Polymer
2

Oil & Gas Journal (April 2006) TIORCO, Inc The Improved Oil Recovery Company
 Summary of Active EOR Projects, 2006

Number of Production Depth API Gravity

Type Projects (Bbls/Day) (Feet) ()

Steam 119 76 220,000 350 5,740 8 26

CO2 94 100 35,000 1,900 10,900 19 43
HC Gases 38 10 80,000 4,040 14,500 15 45
Combustion 21 100 8,100 1,640 9,500 18 38
Polymer 20 53 4,900 1,063 4,626 21 34
Nitrogen 5 1,000 500,000 4,600 15,400 16 - 51

OGJ Worldwide EOR Survey, 2006 TIORCO, Inc The Improved Oil Recovery Company
 Major EOR Projects and Production
700
Total
Thermal
Gas
500
Chemical
Production (M B/D)

300

100

0
USA Mexico Canada Venezuela Indonesia China

Thomas, Oil & Gas Science and Technology (2008) TIORCO, Inc The Improved Oil Recovery Company
 Comparison of EOR Techniques
60
Incremental Oil Cost ($/BBL)

50

40 Surfactant

30

CO2 Injection
20
Thermal
Polymer
10
Waterflood MEOR
0
0 10 20 30 40 50 60 70 80

Total Recovery (% OOIP)

Simandoux et al. IFT Journal (1990)
TIORCO, Inc The Improved Oil Recovery Company
 2006 Global EOR Average Costs
15

13

11
US $ / Barrel

1
Exploration & Acquisitions Capex Capex Capex
Development Deep Water Heavy Oil EOR

Sandrea, Oil & Gas Journal (Nov. 2007) TIORCO, Inc The Improved Oil Recovery Company
 Reasons for EOR Failures

Low Oil Prices

- oil price instability
Insufficient description of Reservoir Geology
- Underestimated Reservoir Heterogeneity
Inadequate understanding of EOR mechanism
- Bad Candidate Selection
Unavailability of Chemicals in large quantities
- Insufficient Budget (lack of commitment)
Heavy reliance on lab experiments
- And too much reliance on simulation
Poor post treatment evaluation

Comments in white from S.M. Farouq Ali (2007) TIORCO, Inc The Improved Oil Recovery Company
 Ideal Enhanced Oil Recovery (EOR)
Produced Fluids(oi, gas, water)
Separation and Storage Facilities Production
Carbon Dioxide Injection Well
Well Water Injection
Pump

Drive Water Miscible Addl Oil

Water Zone Recovery

CO2 CO2 Oil Bank

TIORCO, Inc The Improved Oil Recovery Company

 Real World EOR
Produced Fluids(oi, gas, water)
Separation and Storage Facilities Production
Carbon Dioxide Injection Well
Well Water Injection
Pump

TIORCO, Inc The Improved Oil Recovery Company

 Texaco Polymer Flood Study

Matzen

Daqing, PT

Daqing, PO

Courtenay, Expansion

Rapdan

Dagang

Marmul

Eddesse-Nord

Courtenay, Pilot

Oerrel, WB

Hankensbuettel

Oerrel, MB

US

0 100 200 300 400 500 600 700 800

PV x ppm

R. Braun, E. Debons, Texaco (1989) TIORCO, Inc The Improved Oil Recovery Company
 How to Convert EOR to IRR (TIR)

1) Consider reservoir heterogeneity

2) Predicting results is difficult
3) The more you inject, the more you get
1) Single well pilots usually not successful
4) Detailed Evaluation is essential
5) EOR is not a panacea, but will play an
increasingly important role in the future
1) 70% of current oil production from mature
fields

TIORCO, Inc The Improved Oil Recovery Company

Enhanced Oil Recovery (EOR)
Resultados y Tendencias en el
Mundo
May 21, 2008
Chuck Norman
cnorman@tiorco.com

TIORCO Inc.