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Glimpse Towards the Economic Benefits of Enhanced Oil Recovery

By Praxis Global Research

Feb 10, 2015
 

Interview with Dr. Sola Kasim of Aberdeen Centre for Research in Energy Economics and Finance.

 
 

A large number of oil fields around the globe are maturing and producing less oil, and those affected are looking to Enhanced Oil Recovery (EOR) to maintain or increase their oil production levels. Many countries rely heavily on oil production for their financial health and are becoming increasingly willing to invest in EOR, especially with the growing number of successful EOR projects and with the increase in oil prices which help support research and development schemes.

 

Praxis Global Research had another chance to talk to another EOR expert in the industry – Dr. Sola Kasim of Aberdeen Centre for Research in Energy Economics and Finance, University of Aberdeen in UK. Dr. Kasim is an oil and gas economics researcher and consultant with experience in two hydrocarbon provinces — Nigeria and the United Kingdom Continental Shelf (UKCS). 

 

Dr. Kasim will also join Praxis Global Research and other industry experts to further discuss the challenges, issues and trends in IOR and EOR at the upcoming 2015 IOR/EOR 12th Global Praxis Interactive Technology Workshop on 16 – 18 February in Dubai, UAE.


Praxis Global Research (PGR):

 

Why is enhanced oil recovery (EOR) important to our industry?  Is there a difference between improved oil recovery (IOR) and enhanced oil recovery (EOR)? What are these differences, and how are they related on the other hand?

 

Dr. Sola Kasim:

 

EOR is important because successful schemes improve the economics of oil production as they help increase an oilfield's recovery factor (by as much as 20%) and extend field life.  Evidentially, small improvements in recovery factors can yield billion barrels of incremental oil. 

 

EOR and IOR investments or technologies both aim to achieve maximum economic recovery through boosting the recovery factors of mature fields beyond what are possible using conventional methods.  EOR is a particular case of IOR, as it mainly targets the relatively hard-to-reach immobile oil among the remaining reserves while IOR targets both bypassed mobile and immobile oils.

 


Praxis Global Research (PGR):

 

What is CO2-EOR and how does it work? What are its economic benefits to the oil industry?

 

Dr. Sola Kasim:

 

CO2-EOR is the injection of captured and compressed CO2 into oil wells to enhance well productivity and hence oil production.  Injected CO2 flows through (rock) fractures, permeating the rock structure and swelling to occupy pore spaces.  The swelling pushes oil out of the rock, through fractures, into production wells.  The CO2 in the produced oil is separated, recycled and re-injected to continue the CO2-EOR process.

 

The incremental investment in CO2-EOR has not only direct or micro benefits to the oil industry but economy-wide macro benefits as well.  CO2-EOR investments create more jobs, increase oil production and defer field decommissioning.  The industry's supply chain, too, benefits through enhanced orders from the field operators. 


Macro economy-wise, the increase in oil production and prolongation of field lives translate to higher tax revenues to the government and for longer.   The multiplier effects of the resultant additional government and oil industry spending contribute significantly to economic growth and stabiliy. 

 


Praxis Global Research (PGR):

 

What is your current research projects related to improved and enhanced oil recovery? Can you give us a brief summary of the emerging issues and trends in IOR & EOR based on your research?

 

Dr. Sola Kasim:

 

Globally, there are recognized barriers to the widespread deployment of IOR, in general, and CO2-EOR, in particular.  These include financial and techno-economic risks due to multifaceted uncertainties.  Broadly, my research seeks to contribute to rational attempts at de-risking and encouraging CO2-EOR investments, using the UK and UKCS as case studies.


A major issue militating against the first-of-a-kind CO2-EOR project in the UK is that it can only legally be deployed in an offshore oilfield.  Lacking an offshore source of naturally-occurring high-concentration CO2, the required anthropogenic CO2 feedstock must be sourced onshore. 


This operating restriction not only raises the potential project cost but leaves the UK in a virtual unique position as there is almost no other country in the world with a similar operating restriction whose lessons of experience it can learn from.  My research has investigated and continues to investigate:

 

(i)  Some of the ways in which project costs can be reduced through:

  • the least-cost capture of anthropogenic CO2; and, 
  • optimisation of the carbon capture and storage (CCS) value chain including optimally matching CO2 sources and sinks (for permanent storage or EOR followed by permanent storage).

 

(ii)  Appropriate pricing of CO2 for EOR:

  • by proposing a trading business model in which the EOR operator pays for CO2 during the EOR phase and receives payment for storing it post-EOR.

 

(iii)  The commercial and fiscal incentives required to:

  • reduce investment  and O&M costs; and,
  • remove uncertainties about the stability of the fiscal regime

 

 

Praxis Global Research (PGR):

 

What are the latest techniques being explored in IOR?

 

Dr. Sola Kasim:

 

Continuous CO2 recycle process in EOR.

 

 

Praxis Global Research (PGR):

 

Where are the hot locations currently in the world investing in IOR?

 

Dr. Sola Kasim:

 

The hot locations for CO2-EOR are Canada, UAE and the USA

 


Praxis Global Research (PGR):

 

What are the latest trends in IOR that you are personally keeping an eye on and are looking forward to seeing them progress?

 

Dr. Sola Kasim:

 

I am keeping an eye on the increasing use of the alternatives to CO2 flooding including:

  • polymer flooding;
  • surfactants flooding;  and,
  • miscible hydrocarbon gas injection.

 


About Dr. Sola Kasim

Dr. Kasim began his career in Nigeria as a university lecturer in petroleum and natural resources economics before transitioning to full-time consultancy in energy and petroleum economics. He is currently a faculty member of the Aberdeen Centre for Research in Energy Economics and Finance, University of Aberdeen, UK, and has been working generally, since 2005, on the materialization of the carbon capture and storage (CCS) value chain in the UK and, currently on how best to encourage the introduction and deployment of CO2-EOR in the UKCS.

 

Dr. Kasim has also co-authored several papers which include 'A Futuristic Least-cost Optimisation Model of CO2 Transportation and Storage in the UK/UK Continental Shelf (UKCS)', 'An optimised illustrative investment model of the economics of integrated returns from CCS deployment in the UK/UKCS', and ‘The Economics of CO2-EOR Cluster Developments in the UK Central North Sea/ Outer Moray Firth' published in 2009, 2010 and 2012 respectively. 

 

 

About Praxis Global Research

Praxis Global Research is dedicated to serving the needs of oil and gas professionals through a range of platforms and events addressing technical, career or training issues. By bringing together leading industry thinkers and practitioners, Praxis Global Research aims to share knowledge, build communities and create networks across the industry worldwide. Visit www.praxisglobalresearch.com for more details.

 

 
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