Energy Oil__________Of Note:Despite the engineering advances of the past century, nearly two-thirds of crude still gets left in the ground.
So oil companies are raising the ante, investing billions of dollars in cutting-edge technology to increase the amount of
crude they can tap.
The potential rewards are huge.
"Peak oil" theorists believe the world's oil and gas supplies are fast running out. ____________________________________________________________________________________________
To access my current posts, click the following link:Notes From a Cyber Trader__________________________________________________________________________________________________________________________________________Squeeze That SpongeNearly two-thirds of crude still gets left in the ground.
With enhanced oil recovery, companies are determined to lower that number.
April 27, 2009
By GUY CHAZAN
Wall Street Journal
Often stymied in their quest for new crude, Western oil companies are squeezing more out of the reserves they already have.
Despite the engineering advances of the past century, nearly two-thirds of crude still gets left in the ground. So oil companies are raising the ante, investing billions of dollars in cutting-edge technology to increase the amount of crude they can tap.
The potential rewards are huge: Raising the average recovery rate world-wide to 50% from 35% would boost the world's recoverable oil by about 1.2 trillion barrels -- equal to the whole of today's proven reserves
, the International Energy Agency says.
"It's the prize for the next half-century," says Howard Mayson, vice president for technology at British oil giant BP PLC, which relies heavily on enhanced-recovery methods. Among the processes BP uses: flooding reservoirs with polymers that expand like popcorn when they come into contact with hot rocks, thus flushing more oil out of difficult-to-reach nooks.Higher Costs
Intense effort and the most advanced brainpower in the oil industry will be required to get at these hard-to-extract hydrocarbons, insiders say. The Paris-based IEA says it could take more than 20 years to raise recovery to 50%. Yet the global recession has lowered demand for oil, which could deter some of the investment necessary. Meanwhile, energy prices are higher than they were just a few years ago, making enhanced-recovery methods -- which are energy-intensive -- more costly. The IEA estimates that the cost of the additional oil is between roughly $20 and $70 per barrel, depending on the method. Some require fuel to create heat, others involve the production of chemicals.
The benefits of enhanced recovery are cited regularly in the debate about how much oil is left to pump. "Peak oil" theorists believe the world's oil and gas supplies are fast running out. Champions of enhanced recovery, by contrast, say this isn't so, and point to steady upward revisions in estimates of the world's recoverable hydrocarbon reserves as the industry invents new ways to pump hard-to-get-at oil
Enhanced recovery is a lifeline for the biggest oil companies, such as Exxon Mobil Corp.
, which are under intense pressure from shareholders to keep ramping up production and gaining access to fresh reserves. But that's hard to do when the companies are shut out of the oil-rich Middle East and places like Russia
. So they rely more and more on existing fields, some of which have been producing oil already for decades.
"Big Oil is constantly looking for ways to squeeze the sponge, to get the next trillion barrels,
" says Bob Fryklund, an oil consultant at IHS Inc., a business information and analysis group based in Englewood, Colo. Some smaller energy companies, too, such as Apache Corp.
and Occidental Petroleum Corp.
, have carved out niches in this field. "It's their bread and butter," says Mr. Fryklund.Pumping Gas
One method of improving oil recovery could become a vital weapon against global warming: Some companies are pumping carbon dioxide into reservoirs to flush more oil out of the ground.
The technique could become increasingly attractive as the world seeks to reduce greenhouse gases. Why not put the carbon dioxide to work, the thinking goes, rather than simply storing it in disused oil reservoirs, as is also done currently
"It feels like a waste parking it underground when it has a terrific impact on oil recovery," says Mr. Mayson, who was involved in using natural gas to increase oil production back in the early 1980s as a young reservoir engineer at Prudhoe Bay
, on Alaska's North Slope
. Prudhoe, a big source of oil and gas for BP
, had been in production just a few years at the time, and presented the company with a problem: what to do with the huge amount of natural gas being produced along with oil.
In those days, oil companies in many remote parts of the world would simply burn the gas off into the atmosphere while producing the oil. But the BP team, of which Mr. Mayson was a part, worked to inject the gas back into the reservoir to increase pressure and so boost recovery. BP now injects more natural gas each day into its Alaskan oil reservoirs than the domestic gas market of the U.K. consumes.
Prudhoe's recovery factor today is expected to be more than 60%, compared with less than 40% when production began in the late 1970s. At the start of the 1980s, the field was expected to last about 30 years
, Mr. Mayson says. Now "there could easily be another 50 years to go
," he adds. "It's very long-legged, and a lot of that is down to technology." Prudhoe's total recoverable reserves are now estimated to be several billion barrels more than what was envisaged when production started.Chemicals and other gases, such as nitrogen, have also been used to improve recovery.
These additives lower the viscosity, or stickiness, of the oil and improve its flow rate -- like adding detergent to a greasy saucepan. "It dissolves the oil from the rock face, almost like dry-cleaning it," says Mr. Mayson.After the FloodThe oldest and still the most commonly used method of increasing yield is flooding:
This involves injecting water into an oil reservoir to maintain pressure and to sweep oil that is trapped in porous rock structures toward the well. Flooding has been used in the industry for decades. BP now gets 60% of its oil output this way.
One problem with the technique is the injected water can flow into highly permeable layers of rock, known as "thief zones," bypassing much of the oil in the reservoir. To fix this, BP
uses a technology called Bright Water
, a process involving a chemical which, when cool, is a tightly bound polymer particle, but, when exposed to heat, expands tenfold -- like popcorn. When it enters a thief zone, it encounters hot rocks and "pops," plugging up the zone so that following water will flow elsewhere.
was patented in 2002 by Nalco Co., a small Naperville, Ill., specialist provider of chemicals, and developed by BP
and Chevron Corp
. Trials began in Alaska in 2004. The process has since been used by BP
in Argentina and Pakistan. BP says the additional oil the new technology will produce over the next 20 years is roughly equivalent to finding a major new field.
Like other companies, BP is also experimenting with microbes
that reduce the viscosity of heavy oil and help trapped oil move more freely.Another new technology: LoSal
, a flooding technique that uses water with reduced salinity, unlike the salt water many oil companies use. BP
has discovered that less salinity in the water can improve recovery rates.Eyes Underground
Meanwhile, real-time monitoring of oil reservoirs
helps companies see how effective flooding is and whether there are still pockets of oil that engineers can go after. The technique is often called 4D
, because it not only shows what the reservoir looks like in three dimensions but illustrates how it changes over time. One company noted for its successful use of 4D
is Norway's StatoilHydro ASA
. At its Norne field under the North Sea it has carried out repeated seismic surveys to discover changes in subsurface structures and to monitor flow rates of water, gas and oil in real time. Such techniques have helped lift the recovery factor at Norne to 52% from 40% and extend the field's life past 2015.
Advanced sensors that indicate pressure, temperature and flow rates in real time are increasingly being installed on equipment. This gives engineers a live view
of how an oil well is performing, and more timely information about how productivity can be improved.The wider uptake of 4D technology will depend on addressing issues of repeatability, the quantifiable benefits it offers and achieving integration with other technologies.Carbon sequestration at the Sleipner field: for more than 10 years,StatoilHydro has protected the natural environment by injecting millions of tons of CO2 into the Utsira Formation. 4D seismic expertise has been used to monitor and analyse the behaviour
International Business Machines Corp. is one company at the forefront of such techniques. It integrates sensors, accesses and analyzes the information they provide and makes recommendations based on the data.
Jon Starkebye, regional director of chemicals and petroleum at IBM, says engineers often use production data that's weeks old. That's not as useful as the "live" data IBM can access
, he says.
The advanced sensors allow engineers to "communicate with the reservoir in real time...so they can make the right decisions," he says.
The Wall Street Journal
http://online.wsj.com/article/SB124050418449248573.htmlThanks for dropping by
. Red Mars