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4| CO ₂ - Enhanced Oil Recovery

The study assessed how enhanced oil recovery ( EOR) by CO ₂ flooding (CO ₂- EOR) might either benefit from or be a benefit to CCS. It identified oil fields within the Scottish Renewable Energy Zone, in which CO ₂- EOR was technically feasible, and a more detailed technical and economic assessment of a single field and field cluster was carried out (an exchange rate of $1.4/£ was used).

CO ₂- EOR offers potential of economic gain through additional oil production as well as storage of the CO ₂. On average, primary and secondary oil recovery by water flood from North Sea oilfields accounts for 45% to 55% of oil originally in place, although in some fields it has approached 70%. The residual oil is trapped as by-passed droplets in the rock pores or as a film on the rock grains and may occur as localised significantly higher saturation areas. EOR processes, employed as a third phase of oil field development, seek to mobilise this oil and move it in a 'bank' towards the production wells. However, CO ₂- EOR is one of a number of competing 'Enhanced Recovery' techniques and to date has not been applied in the UK offshore.

Figure 14
Oil fields suitable for CO ₂- EOR. Blue ovals show extent of detailed EOR study.

The majority of CO ₂- EOR projects worldwide to date have been implemented onshore in North American oilfields since the 1970 s and it is experience from these for which most relevant guidelines have been drawn up. No projects have yet been undertaken in the North Sea, although the Miller oilfield was recently considered for CO ₂- EOR. Most existing North American projects have exploited natural CO ₂ transported over extensive long-distance pipeline networks. Under these circumstances, an additional recovery of 5% to 15% of oil originally in place is typically achieved. The technique may not be as productive in North Sea oilfields, because secondary water flood recovery techniques are more widely applied, and wells are drilled further apart than on land.

A high level desk-top review of all oil fields with an estimated CO ₂ storage capacity of >50 Mt was carried out to identify those fields suitable for CO ₂- EOR. The 14 fields are shown in Figure 14 and their details are tabulated in Table 7.

Table 7
Oilfields identified in a 'desk top' review as having potential for CO ₂- EOR.

To gain a more quantitative feel for the application of CO ₂- EOR in North Sea oil fields, a technical and economic assessment of a single large field, the Claymore Field, was carried out (highlighted in Figure 14). Additionally, a 'cluster' of three large fields, Claymore, Scott and Buzzard (highlighted in Figure 14), were assessed as an 'integrated' CO ₂- EOR project. In all cases CO ₂- EOR was assumed to begin in 2017 (although Buzzard will not become available until 2023).

The oil in Claymore is contained in four separate reservoirs. The total oil initially in place was
1439 million barrels. For this study two possible scenarios were considered, a less likely scenario (30% probability) and a more likely scenario (70% probability) with the former yielding an optimistic and the latter a pessimistic recovery of additional oil. Starting in 2017, CO ₂ would be injected at ~ 3.8 Mt/year with produced and recycled CO ₂ eventually negating the capacity to take 'new' CO ₂. Overall, the project would store 49.2 Mt CO ₂ and produce between 119 and 163 million barrels of oil (Figure 15; Table 8).

Figure 15
Estimated CO ₂ injection and recycle gas injection profiles for the Claymore Field.

Capital costs ( CAPEX) are derived from the cost of converting existing facilities and the drilling and refurbishment of new and existing wells. Total capital investment is estimated to be around £1.1 to £1.2 billion. Operating and monitoring costs ( OPEX) are estimated to be around £90 million per year.

Using an oil price of £ 50 ( US$70) per barrel, and assuming that the project neither receives a subsidy nor pays for the CO ₂ received, the internal rate of return is 12%-16% and the net present value at a 10% discount rate is £206-£703 million (lower and upper values correspond to the lower and upper values of additional oil recovered). All analysis is before tax and any benefit from deferral of abandonment of the facilities is not included.

Table 8
Claymore Field - additional oil production and CO ₂ usage for 70% and 30% probability scenarios.
^*amount of oil produced from CO ₂ alone without contribution from associated waterflood.

Sensitivity (to CAPEX, OPEX, oil price and CO ₂ price/subsidy) calculations on the discounted cash flow analyses showed that project economics were most sensitive to oil price, then CO ₂ price/subsidy, then CAPEX, and relatively insensitive to OPEX. Although oil and CO ₂ price are subject to market forces, this analysis showed that project economics can be improved considerably by refining the design and thereby reducing capital costs and risks associated with conversion of facilities and wells to CO ₂ flooding.

4.1 Claymore, Scott and Buzzard cluster evaluation

An analysis of CO ₂- EOR as an integrated project was carried out using the Claymore, Scott and Buzzard fields (highlighted in Figure 14).

The Scott Field has two oil reservoirs divided by faults into several isolated blocks. The field is significantly overpressured. Total oil originally in place was 946 million barrels. Note that the CO ₂ use is much higher in Scott than for Claymore because of the significantly higher pressure in Scott and so higher CO ₂ density (Table 9).

Table 9
Scott Field - additional oil production and CO ₂ usage for 70% and 30% probability scenarios.

Capital costs for the Scott Field are estimated at £1.2 billion with operating costs, excluding tariffs, of around £45 million per year.

Buzzard is located in the Outer Moray Firth. Fluids are contained by a combination of structural and stratigraphical trapping. Total oil originally in place was 1077 million barrels, taken from published information. Forecasts have been downgraded by 40% in the economic analysis over concerns that the CO ₂ may not mix with the oil in a way beneficial to the EOR process (Table 10).

Table 10
Buzzard Field - additional oil production and CO ₂ usage for 70% and 30% probability scenarios.
^* amount of oil produced from CO ₂ alone without contribution from associated waterflood.

The presence of facilities for dealing with hydrogen sulphide or 'sour gas' is likely to reduce the cost of adapting Buzzard to CO ₂ injection so, for the purposes of this analysis the capital cost of conversion, is estimated at £ 700 million. The operating costs for Buzzard, excluding tariffs, are estimated at
£55 million per year.

Aggregated results for this cluster of large fields give an additional oil recovery of 237-331 million barrels for around 155 Mt of CO ₂ stored. The aggregated capital cost of the cluster redevelopment would be around £3.1 billion with total operating costs over the project lifetime of £2.6 billion. Using a £50 ( US$70) per barrel oil price, and assuming that the project neither receives a subsidy nor pays for the CO ₂ received, the internal rate of return is 13%-18% and the net present value at a 10% discount rate is £409-£1717 million.

The economics of exploiting CO ₂- EOR in the northern North Sea have been examined in some detail. The combination of high capital requirements, high operating expense and relatively limited amounts of remaining oil gives rise to considerable sensitivity to both oil prices and the cost of CO ₂ used for injection. CO ₂- EOR may act as a stimulus for CCS especially if developers come to expect that the price of oil will remain over US$100 per barrel for the period of their investment. Higher oil prices would make CO ₂- EOR projects more commercially viable and with that, the independent development of CCS. To date, the closest CCS has come to being realised in the UK is through a proposed CO ₂- EOR project (Miller Field) - but the project was ahead of the political process and the field had to move to decommissioning before a government decision on policy support . However, development of CCS could lead to the application of EOR, since this reduces costs and uncertainties related to CO ₂ supply.

Power stations will produce a fairly constant supply of CO ₂ over many years. This study examined the CO ₂ supply required for Enhanced Oil Recovery projects for a cluster of three large oil fields. Taking the three fields together, the supply of CO ₂ required was substantial, approximately 11Mt/year for
13 years, and comparable to the output from a power station source.

CO ₂-enhanced oil recovery-key conclusions

• Ignoring risk premiums, and if the CO ₂ is not a cost to the project, CO ₂- EOR may be economic in North Sea oil fields at an oil price of US $70 per barrel.
• If CO ₂ is a cost to projects in the £20-£40 ($28-$56) per tonne range, an oil price of US $80-$110 per barrel will be required to break even.
• If a subsidy is available for the CO ₂ stored then the project could be economic at an oil price significantly lower than US $70 per barrel.
• Taking risks into account, it is unlikely that CO ₂- EOR will be commercially viable in North Sea fields at an oil price less than US $100 per barrel.
• The redevelopment of a mature North Sea field for CO ₂- EOR is a major undertaking equivalent in complexity, scale and cost to the original development; each project will need to be the subject of detailed engineering design and economic appraisal including a full assessment of the risks.
• CO ₂- EOR has never been applied offshore so early projects will carry significant additional financial risks.
• The total CO ₂ storage capacity of all fields to which CO ₂- EOR might be applied is ~1000 Mt.

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