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President’s Column

Moving Toward 70% Recovery Factor: Multiple Disciplines, Different Methods, One Goal*

picof spe presidentDuring my 38 years in the industry, I have been dedicated to reservoir and well productivity improvement, particularly focused on enhanced oil recovery (EOR). As many of you know, I have talked about our industry’s need to increase recovery during my many section and conference presentations and have written numerous papers on the topic. I feel that productivity improvement is both one of the industry’s biggest challenges and one of its most promising opportunities, and it is a constantly moving target. The world’s desire for energy will continue to grow. By 2030, our global challenge will be to meet a projected 40% increase in energy demand and to do so in a way that protects the environment.

The often-quoted industry average of 35% recovery efficiency for conventional crude oil raises the question: Can we double it to produce several trillion barrels more? The many technology breakthroughs and thousands of incremental advances in exploration and production since the beginning of oil production have increased oil recovery levels in many shallow heavy oil reservoirs from less than 10% to in excess of 70% by steam injection.

We can add 600 to 900 billion bbl of recoverable oil with only a 10% incremental recovery of oil from the remaining conventional resource base by improved recovery through improved oil recovery (IOR) and EOR technologies. Although by no means an easy task, if we can raise total recovery to 70%, we can add a few trillion bbl of recov­erable oil. The future will be even brighter if we can use IOR and EOR in exploiting unconventional resources, with the potential to defer the impact of “peak oil” far off into the future. Enormous progress is already taking place through the integration of unconventional resource exploitation with horizontal drilling and multistage fracturing. As a result, US oil production is on the rise for the first time in many decades, primarily due to liquids from unconventional reservoirs.

Now, I know what many of you are going to say: “A 70% recovery efficiency cannot be achieved.” I believe it can be. Such efficiency gains are happening today. Many operators are improving recovery efficiencies by being innovative and infusing more technology and know-how, increasing capital, and working with regulators. It is not unreasonable to imagine that implementing advanced IOR and EOR technologies can create another step change for this game-changing resource. When we start thinking of the integration of unconventional resources with the potential of IOR and EOR, the possibilities are mind boggling.

The challenge we must face is how to accelerate innovation and the development of essential technology. Commercializing technology in the oil and gas market is costly and time intensive, with an average of about 16 years from concept to widespread commercial adoption. The key is more collaboration in R&D and sharing innovations among industry, governments, and academic institutions, as well as with scientists outside the E&P industry. We must continue to expand our capabilities through innovation as our industry has relentlessly done in the past.

We all know the supergiant Ghawar field, the largest conventional oil field in the world covering over 8,000 km2. After more than 60 years it is still producing at about 5 million B/D as a result of the application of new technologies and efficient reservoir management.

Here are a few other examples (Next, 2010) of how technology, people, and capital can drastically improve recovery.

  • Kern River enhanced recovery techniques have already captured 67% of this 100-year-old heavy oil field’s estimated 3 billion bbl of OIP. A pilot program to use horizontal steam-injection wells seeks to push ultimate recovery to 75% or higher at this field, one of the largest and most prolific in the US.
  • Tengiz, the world’s deepest producing supergiant oil field, is making excellent progress with an industry-leading pilot project to safely reinject sour gas into reservoirs to yield higher production and boost recovery rates. Sour gas operations at Tengiz began in 2007, with full operations launched in mid-2008. These efforts along with plant expansions enabled Tengiz to double its overall production capacity.
  • At the Agbami Field, a miscible gas and water injection project is being deployed with a novel application of crestal gas injection and peripheral waterflood concurrently. This technique will maximize oil recovery and production by squeezing oil out of the reservoir with a “top down and bottom up” displacement mechanism.
  • At the Minas Field in Sumatra, a pilot project that uses a chemical surfactant-polymer flooding process to recover additional reserves was deployed. The surfactant-polymer project represents ongoing efforts to economically capture more reserves and sustain production at Minas, where secondary recovery techniques have made this field the largest waterflood project in Southeast Asia.

Let us not forget that oil prices are also an important factor that there are several crude oil prices (several types of crude) influences recovery efficiency.  Also, note that large investments and comprehensive competency and knowledge are needed to implement an EOR process. Moreover, reservoir specific research is needed to increase recovery.

I sincerely believe that to truly maximize economic recovery from a reservoir takes an integrated multi-functional and multi-stakeholder team effort. This effort can be facilitated through SPE, with the organization providing the environment to foster collaboration with more in the industry, such as academia, NOCs, IOCs, and service companies. Collaboration and building trust with our collaborators are essential to developing a partnership, and it takes time to achieve this.

I would like to see an increase in well-organized, collaborative efforts such as in-depth discussions and development of standard practices in surveillance and monitoring of fields. Although there are pockets of excellence, this is not happening consistently all over the world, and SPE should take a leadership role in developing best practices in these areas. If we could accomplish this in an organized way, it would provide a valuable service to the entire industry and move us toward the goal of 70% recovery efficiency.

Miscible CO2 flooding now contributes more oil production in the US than any other EOR method. There are over 120 CO2 EOR projects. The CO2 EOR technology is well proven, safe, and economic. In addition, the knowhow and technology from CO2 flooding are applicable to carbon capture and storage. So, the expertise developed from CO2 EOR is also transferable to manage anthropogenic CO2, a great plus for our industry.

Some people would say this is not possible everywhere in the world. I don’t want to get stuck on the literal goal of 70% recovery. It is not always about the goal, it is often about the journey. The journey is to increase recovery efficiency. As I stated in the beginning, an increase of just 10% could give us 600 to 900 billion bbl. That would be an accomplishment, but if we dare to push for 70%, we could gain a trillion barrels of oil. I know some will think the believers are the crazy ones but I believe in the words of Steve Jobs when he said, “Stay hungry, stay foolish.”

As always, I would appreciate your feedback and comments.

*Thanks to the SPE Saudi Arabia Section for using this title as a theme for one of their conferences.

Enticing more from the reservoir. Next* The Next Generation of Energy Technology. Chevron (November 2010) 20–23.