The Best Time for EOR is Before You Produce a Drop of Oil

The sad truth of working in oil companies is that being assigned to work on enhanced oil recovery ("EOR") projects is sometimes considered career death. All the glamour jobs are on the big discoveries, putting in place billions of dollars of plant and equipment and bringing on hundreds of thousands of barrels per day of production. EOR is thought about as fields decline and managers are looking for some way to stave off decommissioning or being assigned to the "Acquisitions and Disposals" basket.

Even the terminology we use consigns EOR to the difficult end of field life. Primary recovery (just let the oil flow), secondary recovery (well we better pump some water in then) and tertiary recovery (EOR, or darn it that hasn't worked so well what else can we try). That sounds like a logical sequence, but that isn't the way it should be at all.

All EOR techniques are really about trying to reduce the residual oil saturation below that which you would get with a waterflood. I don't count infill drilling as an EOR technique, in fact most people would call that Improved Oil Recovery ("IOR"), infill drilling is just a sensible way to phase the drilling schedule so that you know more about the reservoir when you drill half of your wells, it makes sense to do that after producing most of the easy oil. However, by implementing EOR projects late in field life we defer, by twenty years or more, the extra production we get from the reduced residual oil saturation and because we have replaced all of the easy oil with water we make the new displacing agent (fresh water, carbon dioxide, steam, polymer thickened water, whatever) work two or three times as hard. That's because it has to displace the water we injected as well as the little bit of extra oil we hope to get. No wonder most EOR projects don't pass economic thresholds.

Conversely, do it from the start, as BP is doing on Clair Ridge, and we intend to do on Pilot, and you get the extra oil early and therefore the economic benefits are magnified. Doing it from the start helps reduce the costs too. Retrofitting a reverse osmosis plant on an offshore platform would cost many times more than building it into the platform in the construction yard. Doing it from the start gets the most value possible from the technology.

So why doesn't this happen, why are the EOR sections of most companies websites talking about what they might do some time in the distant future? Why isn't EOR built into development plans right from the start?

The answer is that the oil industry is very conservative, and especially cautious when designing new projects. With good reason, oil fields are uncertain beasts, just as likely to disappoint as to do what we expect. Implementing a different sweep mechanism means taking a risk, it means doing something that your predecessors haven't. In fact the industry has designed a series of project evaluation processes designed to hammer risk out of projects, the trouble is they tend to steer us all towards the conventional option, the well travelled path. Innovation is stifled, opportunities bypassed, just like the oil we will leave behind.

Applicability of selected EOR techniques, after figure on page 8 of  Shell's 2012 EOR brochure

Applicability of selected EOR techniques, after figure on page 8 of Shell's 2012 EOR brochure

Most of the technologies aren't that new, low salinity water is a recent technique, but most of the rest have been around since the sixties and seventies. We all know that carbon dioxide injection would be a massively successful EOR technique for a typical light oil North Sea reservoir, but there isn't a single project trying to take advantage of that benefit. Neither of the carbon capture projects mooted in the UK are doing anything other than pumping the carbon dioxide into the ground to store it, there seem to be no plans to take advantage of its magical oil recovering powers.

For some fields, there are good justifiable reasons why no-one is taking up this opportunity. Existing wells and process systems in a lot of currently producing fields don't have the metallurgy capable of coping with corrosive carbon dioxide. But for other fields where the original oils were sour with high carbon dioxide content, fields such as Brae, Miller, Trees, T-Block and Kingfisher, the process systems are ready to deal with carbon dioxide breakthrough and there is no good technical reason not to try a carbon dioxide flood. There is even carbon dioxide available nearby from Sleipner. But because people have delayed thinking about EOR until the end of field life, the margins on the incremental barrels are smaller, and the opportunities are slipping away from the industry.

So implementing EOR needs to be in every new field development plan, right from the start. That should be part of the new Oil and Gas Authority's mission. The OGA needs to make operators justify why the techniques, which are effective for the type of reservoir a company wants to develop, can't be applied right now, right at the start of development. The mindset needs to change from having operators justify why EOR will work, to justifying why it can't work.

The industry won't change on its own, it needs a carrot (a decent tax incentive) and it needs a stick (a robust regulator).