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Oil prices drive projected carbon dioxide enhanced oil recovery

Hydrocarbon Engineering,

In its 2014 Annual Energy Outlook (AEO2014), the US Energy Information Administration (EIA) projects that the price of oil will largely determine whether to use carbon dioxide enhanced oil recovery (EOR) technologies to extract additional crude oil from existing producing fields.

The injection of CO2 gas into oil reservoirs at high pressure forces the CO2 to mix with oil. This reduced the oil’s viscosity and causes the oil to increase in volume. The result is an increase in the total cumulative volume of oil produced and in the percentage of oil-in-place that is recovered. The decision by a producer whether or not to employ this technique depends on a number of factors, including the geophysical properties of the reservoir, the oil within that reservoir, the cost of applying CO2 EOR and the revenue received from the additional production.

The injection of miscible CO2 into old oil fields to recover more of the oil-in-place is expensive. The cost of the CO2 itself can add US$ 20 – US$ 30/bbl of oil produced. In addition, the producer must pay for surface facilities to separate the CO2 from the production stream and compress it back into the oil reservoir. The producer also incurs the financial cost for the time delay associated with repressurizing old reservoirs. Oil prices thus play an important role in determining whether the additional production resulting from applying EOR to old fields is sufficient to make this process commercially and economically feasible.

In the AEO2014 High Oil Price case, the West Texas Intermediate (WTI) crude oil price rises to US$ 202/bbl by 2040, 45% more than in the Reference case. This higher oil price increases the number of old fields that can profitably produce oil using CO2 EOR technology. Oil production in this case reaches 960 000 bpd by 2040, 30% more than in the Reference case, in which it reaches 740 000 bpd.

In the AEO2014 Low Oil Price case, with WTI prices reaching only US$ 73/bbl by 2040, CO2 EOR production reaches on 480 000 bpd by 2040 (35% less than in the Reference case). In the Reference case, CO2 EOR production accounts for 10% of total US crude oil production, versus 12% in the High Oil price case and 8% in the low oil price case.

The High Oil and Gas Resource case projects CO2 EOR production of 650 000 bpd in 2040 (12% lower than in the Reference case). In the Low Oil and Gas Resource case EOR production is more profitable and higher oil prices lead to CO2  EOR production that reached 770 000 bpd in 2040 (4% higher than in the Reference case).

Adapted from a press release by Emma McAleavey.

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