Waiting for the EOR Boom:

What Happen in the Mean Time

EOR potential has been predicted over the past three decades
After crude oil price collapse in mid 80s, EOR activity slow down
drastically
Majors decided shut-down research centers and number of students
enrolled in reservoir/petroleum engineering and in geoscience also
dropped in Universities
Since 2007 EOR activity start showing a growing trend having Canada,
China and the U.S. as the countries with the largest EOR production
CO2 EOR/storage started to get lot of attention due to new environmental
regulations
Lack of expertise and prepared work force is one of the key factors
constraining EOR evaluation and implementation
EOR offshore is still at early stages of evaluation (will require 1 to 2
decades if EOR becomes economically attractive)

EOR projects in the U.S. & Average

World Crude Oil Price
Source: Oil & Gas Journal

Evolution of EOR
projects in the U.S.
(1976-2010)

Source: U.S. Department of Energy

Historical world average

crude oil price
(1980-2009)

Worldwide Oil and EOR Production

(billion barrels)
World Oil Production

Gas and thermal methods

represents 60-70% of
worldwide EOR production
Chemical flooding
represents up to 27% of
total EOR production

World EOR Production

SOURCE: Department of Energy, U.S.

Energy Information Administration. Calculated
and estimated by SBI Energy, April 2010

Percentage of EOR Production by

Country in 2009 ( 1.1 Billion bbl)

SOURCE: Industry Sources. Calculated and estimated by SBI Energy

EOR Market Value

EOR Market Value
(2005-2009)

The EOR market value rose

from over $3.1 billion in 2005 to
almost $62.5 billion in 2009
Drop observed in 2009 is not
related to EOR production
decrease but an approximate
$30 per barrel drop in oil prices

One of Multiple
New EOR
Predictions
6

Projected EOR Potential:

2009 - 2015
Market study in 1998 total EOR
production was estimated in 1
Billion barrels by 2005 (Fredonia)
Recent market study for EOR
predicts a steady increase in world
oil production based on energy
demand and economic growth of
China, India, Russia and the U.S.
(SBI Energy 2010)

Projected Total Oil Productio

(Billion Barrels)

Projected EOR Oil Production

(Billion Barrels)

World EOR production was

forecasted in approx. 12 billion
barrels by 2015
EOR market value was projected to
reach $US 1.3 Trillion by 2015
SOURCE: Industry Sources. Calculated and estimated by SBI Energy

EOR Projected Market Growth Based

on Oil Price Per Barrel

Averag
e Price

$US/b
bl

Low

55

Referenc
e

92

SOURCE: Department of Energy, U.S. Energy Information Administration and industry

sources. Calculated and estimated by SBI Energy.

Projected EOR Worldwide Market

Share of Production by 2015 ( 12
Billion bbl)

SOURCE: Industry Sources. Calculated and estimated by SBI Energy

Two EOR Cases:

CO2 vs. HPAI
10

Trend of CO2 Floods and Oil Prices in

the U.S.

Sources: O&G Journal and EIA

North American CO2 Sources and EOR

Areas (Most from Natural Sources!)

North American CO2 Source Deliveries

for Enhanced Oil Recovery Q4 2006

Average CO2 Capture Cost by Source

Source: Industry Sources. Calculated and estimated by SBI Energy, April 2010

Example of CO2 Flood Costs and

Incomes (EOR / Storage)
9.75/tCO2 - 02 Feb. 09
15.34/tCO2 - 21 Aug. 09
14.38/tCO2 4 Nov. 10
$40/bbl - 02 Feb. 09
$74/bbl - 21 Aug. 09
$86/bbl 4 Nov. 10

Costs

Include compression costs

Potential
incomes to
offset CCS
costs

Example of CO2 Purchase/Recycle in a

Large CO2-EOR Project
CO2 recycling limit storage potential of oil reservoirs
(Economic limit of EOR projects). CO2 storage is
also limited by the reservoir storage capacity.

CO2 purchase
decreases with time in
EOR projects
(Economics).

Courtesy of Ron Wackowski, 1997

HPAI vs. CO2 in Northern U.S.

Weyburn
Ongoing HPAI
projects in MT,
ND & SD

205 miles

Great Plains
Synfuels
Plant

120 170 miles

Sources: NatCarb and Dakota Gasification Company

Trend of Air Injection Projects:

Carbonate and Sandstone Fm.

Sources: O&G Journal 1990 - 2010

Cedar Hills Project, North Dakota

Why High Pressure Air Injection (HPAI)?
Low primary recovery ~ 8%
Fluid expansion and rock compaction are main
driving mechanisms
Low permeability ~ 3 md (Dolomitic Reservoir)
High Initial water saturation ~ 35%
Deep reservoir ~ 9,000 ft
High temperature ~ 225 F
No access to cheap CO2
Natural Gas for markets

Cedar Hills Project, North Dakota

HPAI Modeling:
100 sections
API gravity ~30, sweet crude
Carbonate Formation, 8500 TVD
4 feet Upper, 5 feet Lower
Primary recovery from rock & fluid expansion
GOR ~ 350 SCF/STB

Cedar Hills Project, North Dakota

Field Development

Initial (1995 1998)

Open-hole horizontal well completion
640 acre well spacing 84 producers
Primary Recovery
Subsequent (2001 2004)
Infill drilling of injection wells
320 acre well spacing 84 producers; 66 injectors; 150 total
High Pressure Air Injection (HPAI)
Water injection along unit boundary
Current Plan (2005 2009)
Three drilling rigs active
28 horizontal extensions
109 new horizontal infill wells
160 acre well spacing development
Hybrid air and water injection

Cedar Hills Project, North Dakota:

Historical Oil Rate & Well Count

Cedar Hills Project, North Dakota:

Prediction Capability

Challenges & Opportunities

Chemical flooding seems to be the most feasible EOR method for
Argentinean reservoirs. Combined with waterflooding optimization these
strategies can be implemented in a reasonable period of time
Develop an inventory of CO2 sources in Argentina and evaluate its
distance to oil reservoirs candidates for this EOR method
- CO2 availability may arrive to late (depleted an watered out
reservoirs) making difficult project economics
- CO2 volumes required in EOR projects are small compared to CO 2
volumes emitted by power plants. The economics of CO2 - EOR are
based on CO2 purchase / recycle strategies
If EOR expansion is materialized , staffing and availability of large
volume of chemicals, among others, may represent key challenges for
large scale applications
Is HPAI and other thermal methods viable in Argentina?