Technology Focus: EOR Operations (June 2020)

Abstract

As I write this, I am in Week 4 of working at home because of COVID-19. Like many sectors of the economy, the oil and gas industry is affected by the practical issues raised by social isolation but uniquely so by the dramatic fall in oil price triggered by a reduction in demand and the battle for market share between major producing countries. All this is set against the backdrop of the energy transition and the long-term effect this will bring for our industry’s energy products. In difficult times, there is naturally a focus on maximizing the operational efficiency of existing assets, including enhanced-oil-recovery (EOR) operations and looking for capital-efficient ways to increase the resource base in existing assets. In the longer term, the outlook for EOR, at first sight, might seem to be particularly challenged in the face of the energy transition. This is because of both the effect of an increased focus on the life cycle - or well-to-wheels - carbon intensity of each barrel produced and the expectation of the existence of stranded, unproducible hydrocarbon resources if we are to stay within a global carbon budget and prevent unmanageable temperature rises. While some EOR technologies, particularly thermal, have unfavorable greenhouse-gas intensity metrics, others create the possibility of lower-intensity barrels. The increasing success in large-scale polymer flooding shows that EOR methods can recover more oil at reduced carbon intensity - more barrels with reduced water injection and produced-fluid handling. In the right circumstances, CO2 EOR can enable CO2 capture through the additional revenues it produces compared with pure storage or by producing barrels with a significantly lower carbon intensity that may qualify under low-carbon-fuel standards. Gas EOR, where it is managing associated gas to minimize flaring and venting of methane and CO2, also reduces the intensity of conventional waterflood and depletion barrels. There is an apocryphal curse that says, “May you live in interesting times.” Like it or not, we live in interesting times, times of unprecedented change, challenge, and uncertainty; however, times such as these drive creativity. In the energy transition, there is the opportunity to innovate in EOR technology, deployment, and operations to deliver cost-effective and lower-intensity barrels.