Enhanced oil recovery

Jan van Buitenen, director of Oman’s Enhanced Oil Recovery Directorate, describes how the country is using the latest technology to boost output

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By  David Ingham Published  August 1, 2005

I|~|manbig.jpg|~|Jan van Buitenen: “We have reviewed 90% of [Oman’s] fields, and have realised that most of them require advanced techniques of oil production.”|~|Petroleum Development Oman (PDO) is witnessing a gradual decline in its oil output. In 2003, its oil production averaged 702,000 barrels per day. That figure fell to 661,000 bpd last year and the company has set itself a modest target of 635,000 bpd for this year. However, the state oil company is far from giving up on oil production. Having set up a separate directorate for Enhanced Oil Recovery (EOR), PDO is investing large amounts in ensuring that it gets the most it can out of existing wells. Oil&Gas Middle East caught up with Jan van Buitenen, director, EOR Drectorate, in Oman to understand the challenge the country is facing in increasing production.

Petroleum Development Oman (PDO) set up its Enhanced Oil Recovery (EOR) directorate in 2004. What exactly is EOR and why has Petroleum Development Oman set up a separate directorate for this method of oil recovery?
That is a difficult question as there is not yet a complete definition for EOR. If you go around the world asking people what EOR is, you will get different responses. While some people see it as a search for more oil production, others see it as the most advanced oil recovery technique. I like to define EOR as involving the introduction of elements that are not naturally found into the reservoir, like steam or polymers, to change the physical or chemical characteristics of the oil so that it flows more readily to the producing wells.
To make this clearer, if you go to Harweel, one of the largest fields brought under EOR, we bring gas into the reservoir, where it behaves like a liquid that pushes the oil out of the reservoir.
PDO had been producing a large amount of oil over the last 40 years. New oil from new fields is becoming scarcer, as there has been so much exploration activity in the past. So, now what we have to focus on is what we have, and how much we can extract out of the available fields. At this point, the oil price also decides if the initiative is worth it.
If you look at the producing countries, people get 35% of the available oil out of the ground on average in normal, not too difficult circumstances. After this, you have to work harder to pump the oil out.
PDO has actually been working at EOR project definitions for quite a few years, but now we have come to the conclusion that EOR is absolutely necessary to continue oil production. The whole world has to turn to EOR at some point in the future, if they want to sustain oil production.
Of course, EOR techniques are much more expensive than normal oil recovery methods. The use of steam, like in Mukhaizna, is very capital intensive, as the production of steam itself is very costly.

Could you tell me about Mukhaizna and what really is so difficult about that field and why it has been reassigned to another company?
Well, it is the oil in Mukhaizna that is difficult. If we were to put the oil of that field in a coffee cup and turn it over, the oil would remain in the cup for hours. It gets very close to being solid in room temperature. So, we have to heat it up quite a bit to get the oil out of the ground. The only way to develop this field is by steam, which goes into the reservoir, and when the steam condenses, it will heat up the reservoir, as the heat is transferred from the steam to the oil. We had initially started the development of Mukhaizna, now another company has taken over; the reasons are for PDO’s shareholders to discuss.

So, will the Enhanced Oil Recovery Directorate have anything to do with Mukhaizna at all?
No, we will not have anything to do with the development of the field. We have worked on it, we have the definition of the project, and we know how we would have developed it. But now, Mukhaizna Occidental will develop it. They will look at our research, but as a company they will have their own set of ideas and conclusions to draw from it. One thing is for certain: only steam can bring Mukhaizna oil out, so whichever company develops it has to use steam to enable production from the field. So, I guess there will only be differences in the execution of the project, but the EOR technique applied will not change.

What percent of Oman fields require EOR and which other fields are you currently working on?
We have reviewed 90% of the fields, and have realised that most of them require advanced techniques of oil production. We are currently working on a combination of gas/oil gravity drainage and steam injection in a carbonate reservoir. For the first time ever in the world, these two different kinds of recovery processes are being combined to produce oil from Qarn Alam.
The first massive project will begin in 2007, in Marmul. Harweel by itself is also a very big project, as it consists of many different fields and each of the fields is huge. So, within the next couple of years, there will be eight to ten projects within Harweel itself. We are right now tendering the second project in Harweel; the first one — a conventional development — came on stream last year. Every year, from now on, we hope to tender for a new project in the Harweel area. Within the next six or seven years, we should be able to get about 100,000 barrels per day of oil out of Harweel.
We are spending a lot of money and manpower and there is a huge effort going on in making EOR project definitions. For the future, EOR and Oman will be one and the same.

Qarn Alam, as you mentioned, is the first of its kind. Could you explain the reservoir structure of this field and what is unique about the tools you are implementing there?
Qarn Alam is a low-permeability carbonate reservoir filled with moderately viscous oil. We can get the oil out of it, but it would take hundreds of years with normal recovery methods. If we inject sufficient steam into it, however, we could bring the oil out by enhancing the natural recovery process, which is known as gas/oil gravity drainage.
Reservoir engineering-wise, developing the field in this way is extremely complicated. Modelling these reservoirs and making a forecast of fluid movement is also very difficult.

Since the processes are so very complex, what is the kind of reservoir monitoring that would be required for these projects in Oman?
Normally, if an effort of “x” is required to do reservoir monitoring, then in this case we need to put in an effort of about “5x”. We are adding a lot of valuable substances to the reservoir.
We need to know what the stuff is doing in the reservoir, as, if it is not doing anything, we are only wasting money. So, in the case of EOR as compared with normal developments, it becomes even more critical to know what is happening in the reservoir. We drill observation wells, solely to monitor the reservoir; normally, you would not do that. Through the observation well, we have to ensure that the steam injected is moving in the right direction or the gas injected is helping fluid movement by behaving in a manner intended. Apart from not yielding favourable results, steam or water movement in the wrong direction can make it very complicated to actually find out where the oil is.
Heating an underground reservoir causes it to expand, resulting in the surface moving up by a few millimetres. So, measurements must be taken all over the field to check whether there are any notable changes in surface elevation.

So, does that mean EOR projects need more manpower?
It is not necessarily more people that EOR demands. Actually, rather than more people we need people with higher education levels to understand the dynamics of this operation.
The tools of operation are a lot more complex. You need to be extremely efficient to bring the cost down on EOR projects. Operators are also exposed to health and safety risks, as high pressure gases are involved, sometimes gases (some toxic) are being injected at around 500 times atmospheric pressure. So, apart from robust facilities, you need people who understand the risks that are associated with the project.

Are you then training people specifically to get involved in the EOR projects?
We have had a programme for Mukhaizna. But, now we are setting up very extensive training programmes and are going to send people all over the world to gain experience. It will be a two year training programme that they have to undergo before working on any EOR programme in PDO.

What about the quality of oil that is pumped out of the fields using this method of recovery?
The oil related to steam recovery methods would be very viscous. Since the oil is heavy, we will not get the same price for it as we would for the lighter oils. So, we have to take that into consideration before embarking on a project. In Harweel, the oil has an API of about 40 degrees, so it is lighter than most of the oil produced from the other fields in Oman like Mukhaizna or Qarn Alam, from where the oil is not as light.

||**||II|~||~||~|What about flowlines and pipelines for heavy oil — do they have to be a different kind? Will the oil need any special treatment to be transported?
No, but we have to take into consideration how the oil flows. For instance, the oil from Mukhaizna, once you’ve pumped it out and it cools, will not flow but only clog up the flowlines. So, you look at the best mixing possibilities. For example, if the Mukhaizna crude is mixed with a limited amount of a lighter crude, then the viscosity of the mixture will drop.

What about refining Oman crude?
Oman is building a refinery in Sohar to refine the crude that is produced in Oman. We also have the Oman Refinery Company, which can refine Oman crude.

There have been reports suggesting that techniques like EOR will alter the structure of the reservoir and may even cause rapid depletion. What do you have to say?
In essence, if you do EOR, there is no structural change. Steam may give you a bit of change to the reservoir, but water or gas will effect no change. I don’t think this technique necessarily depletes reserves any faster than normal methods do. In the past, people had all kinds of rules on what you can and what you cannot do, like only 6.5% of the reserves per annum can be extracted. But I think there are no hard or fast rules on oil extraction any more. I think with regard to EOR, we need to consider what are economical rates of production.

With regard to an EOR project, are you worried about its feasibility when prices come down?
Irrespective of the price of oil, we are continually trying to reduce costs. We try to keep the difference between the conventional oil projects and EOR projects as minuscule as possible. EOR is definitely expensive, so every EOR project has to continuously monitor costs. But having said that, I must point out that we are not embarking on EOR projects just because of a US $60 barrel oil price. We only do a project if it passes the screening process, and the screening criteria approved by the shareholders is far below the US $60 mark. So, on every project, before we set out, we do gauge if the project will make money, even if things go wrong.

What is the cost of extracting oil using EOR as against using the conventional methods?
At low oil prices, below US $20 a barrel, a company using EOR still needs to make money. So, I would say about two or three times the conventional costs. In the future, however, conventional oil recovery will become more expensive, with fields hitting maturity, and EOR will also become cheaper with larger fields and more projects.
Among the EOR projects, steam is most expensive. Gas injection is also quite expensive, as gas can be sold, and instead of selling it you are putting it in the ground. Polymer recovery is a bit cheaper when compared to the other two methods of recovery.

How is the Middle East region progressing with EOR?
All companies in the world, including state oil companies like Saudi Aramco and National Iranian Oil Company (NIOC), will have to resort to EOR; it is just a matter of time. Saudi Arabia has a wealth of fields, so they may not have to resort to it for the next five or ten years. Oman has to do it now, but in twenty years from now, all countries will have to resort to EOR if they want to recover oil.

When will PDO have to completely rely on EOR?
I do hope that it will be many many years from now. But EOR is here to stay and there will be no PDO without EOR.


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