R&D Solutions for OIL & GAS

EXPLORATION & PRODUCTION

Enhanced Oil Recovery—Do You

Have the Right EOR Strategy?

Summary
Research and technological advancements in EOR had been growing at a high rate over the
past 10 years due to growing concern that all the ‘easy oil’ has been exploited and result of high
oil prices, which increased R&D appetite and investment into enhanced oil recovery (EOR).
However, the sharp and sustained decline in crude oil prices has forced many major EOR
projects to be suspended and resulted in diminished investment in EOR R&D as companies
are struggling to bring down both their CAPEX and OPEX costs. But with 1 trillion barrels
of potentially recoverable oil sitting in mature fields, is this right strategy? This white paper
explores the trends and advancements in EOR technologies and discusses strategies of the
leaders and lagers with regard to EOR.
 Do you have the right EOR strategy? Finding the Capital
After a decade of significant strides, The difficulty is finding capital for such a
progress in enhanced oil recovery (EOR) is strategy if you don’t already have some,
slowing. The slowdown comes as swoon- according to Ken Holtgrieve, a former
ing oil prices have forced companies Kinder Morgan Energy Partners manager
to focus on preserving cash instead of for CO2-related EOR projects and now an
wringing every drop of oil out of their res- independent consultant based in Conroe,
ervoirs. The result has been less spending Texas. Holgrieve believes that oil prices
on EOR research and development. in the $65 to $75 per barrel range will
be necessary before new outside capital
But is this the right strategy? Are oil will come into EOR projects. Right now,
prices destined to remain in the dol- outside investors seem interested only in
drums for another generation, making new horizontal wells in prime locations
new EOR projects challenging at best? with time horizons of three to five years.
Or is this the time to capitalize on a tem- By contrast the time horizon for EOR
porary downturn? projects is often 20 to 30 years, with initial
One industry consultant notes that payback times of seven to eight years.
Occidental Petroleum, a leader in EOR, But those who have ready capital and
went on an acquisition spree in the early patience can achieve superior long-term
2000s before oil prices rose to their high- returns by buying properties at substantial
est ever late in that decade. This move discounts now for the day when oil prices
positioned Occidental as the premier return to higher levels.
player in EOR worldwide, according to
Val Brock, former manager of improved However, EOR may be best the most
oil recovery/enhanced oil recovery effective and efficient strategy for
for Holland-based Shell International optimizing returns from brownfields.
Exploration and Production and now According to Ahmed Hashmi, Head of
president of Bismuth Energy, a Houston Upstream Technology at BP, “Enhanced
energy consulting firm. Oil Recovery, presents opportunities to
access and accelerate reserves as fields
Buying when property is cheap is nothing mature... the world has probably reached
new, and it is happening again among sev- a point globally when the potential for
eral oil patch players who are acquiring—at enhanced recovery from known hydrocar-
a discount—fields with potential or actual bon resources exceeds the potential from
EOR operations, Brock explained. new discoveries.”1

1 British Petroleum P.L.C., “Squeezing more from brownfields in a low oil price environment,” (Transcript of Ahmed
Hashmi Speech presented at CERAWeek energy conference February, 2016). Available: http://www.bp.com/en/global/
corporate/press/speehes/brownfields-in-a-low-oil-price-environment.html

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EOR: A Good Long-Term Investment greenhouse gas emission caps will also
Short- and medium-term swings in the influence costs for thermal projects, as is
price of oil obscure the true prospects for the case already in California and Alberta.
EOR, even as both capital and operating For chemical EOR, the chemicals them-
costs remain significant challenges. The selves are the major expense, Alvarado
International Energy Agency and many explained. Expenses can mount more
professionals in the oil industry recognize quickly for reservoirs with temperatures
that the majority of the easy-to-extract oil above 80 degrees Celcius that use poly-
has been exploited. Earlier in this decade mer floods because special polymers for
when oil prices were high, exploration high-temperature environments may cost
units armed with record-breaking bud- three times what regular polymers do.
gets were chasing ever more expensive
and difficult projects in the Arctic, in ultra For CO2 injection, the CO2 itself is expen-
deepwater, and in unconventional oil sive at the beginning of the project. Later,
deposits such as oil sands. when wells start producing, the CO2 can
be recycled. For air and nitrogen injec-
With average recovery rates around 35% tion, the biggest investment comes at
there is a huge bonanza awaiting compa- the beginning, when setting up the plant
nies that can unlock the secret of low-cost to take in air or to extract nitrogen from
EOR. An apt and succinct summary comes the air and pressurize either for injection.
from Russell Ostermann, director of the After that, electricity is the major expense,
Petroleum Engineering Program at The Alvarado explained.
University of Kansas, as he explains the
allure of oil available for EOR: “We know The size of the prize, however, is huge. An
exactly where it is, we have wells drilled estimated 1 trillion barrels of oil may be
to it, and we know how to get the next 20 ultimately recoverable from known fields
percent. Cost is the big issue.” using EOR, according to Gary A. Pope, a
professor of petroleum engineering at The
For thermal recovery, the cost of fuel University of Texas at Austin (UT-Austin)
(primarily natural gas) heavily influences and a consultant to the oil industry. And,
the viability of such projects, accord- this number is only for conventionally
ing to Vladimir Alvarado, head of the extracted light and heavy oil fields.
Department of Chemical Engineering at
the University of Wyoming and a con-
sultant to the oil industry. Increasingly,

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 Unconventional Oil and EOR techniques
Unconventional oil from oil sands and other sources is not included in the 1 trillion
barrel figure. These emerging sources are helping to blur the distinction between EOR
and primary and secondary recovery. EOR techniques are now being applied as initial
recovery methods. One example is steam-assisted gravity drainage (SAGD) which is
being heavily deployed in oil sands deposits.
Moreover, major oil companies such as Royal Dutch Shell have begun to incorpo-
rate EOR into field development planning early on. This innovation is not surprising
because secondary recovery methods, such as waterflooding or gas injection, are often
augmented quickly with chemical EOR methods.
EOR Advances: Superior Chemicals, Combining Methods
EOR researchers report that the generally high prices in the last 10 years (before the oil
price collapse) supported substantial progress that came mostly in two ways—research &
development of superior chemicals for chemical EOR and inventive combinations of the
three major EOR methods: thermal, miscible gas injection, and chemical flooding.3 . 4
Advances in Chemical EOR
Perhaps the most significant strides in EOR in the last decade have come from a host
of new polymers, surfactants, gels, and co-solvents. For example, there have been more
new surfactants created in the last 10 years than in the last 40 according to Pope, and
demonstrated by analysis of trends of EOR research output and patents filed between
1980 to present according to Scopus2.
This is significant because properly formulated and applied surfactants can raise recov-
eries by 20 to 30 percent of the original oil in place (OOIP). This compares favorably
with about 12 percent each for both polymer flooding and CO2 injection. Because the
recoveries for surfactants are in addition to recoveries using other methods, they may
ultimately make a bigger difference in EOR recoveries than all other chemical methods.

Published Research Patents Filed

2003

2007
2005
2001

2013

2015
2000

2011
2010
1998
1988

1996

1999
1986

1989

1994

2008
1984

2006

2009
1992
1982

2004
2002
1993

2016
1983

2014
1997

2012
1987

1995
1985

1991
1981

1990
1980

Figure 1. Published research and number of patents filed between 1980–2016. (Source: Scopus)

2 Scopus is the largest abstract and citation database of peer-reviewed literature: scientific journals, books and conference
proceedings. Delivering a comprehensive overview of the world's research output by universities, research institutes and
agencies and corporations with smart tools to track, analyze and visualize research (https://www.elsevier.com/solutions/scopus)
3 Much of the information and analysis in this paper comes from in-depth interviews with leading enhanced oil recovery
researchers. They include Gary A. Pope, professor of petroleum engineering at The University of Texas at Austin; Vladimir
Alvarado, head of the Department of Chemical Engineering at the University of Wyoming; Russell Ostermann, director
of the Petroleum Engineering Program at The University of Kansas; Shahin Negahban, director of the Tertiary Oil
Recovery Program at The University of Kansas; and Louis Castanier, senior researcher and lecturer, Department of Energy
Resources Engineering at Stanford University. All these researchers have long experience in the EOR field—both as
researchers and as consultants to, or employees of, oil companies around the world.
4 For an excellent overview of EOR methods, see Rifaat Al-Mjeni and others, “Has the Time Come for EOR?,” Oilfield Review
22 (Winter 2010/2011)16-35. Available: www.slb.com/~/media/Files/resources/oilfield_review/ors10/win10/eor.pdf.

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“We know exactly where it is, we have wells
drilled to it, and we know how to get the next
20 percent. Cost is the big issue.”
—Russell Ostermann, Director of Petroleum, The University of Kansas

Polymer Floods Go Offshore Before polymer flooding, the field yielded

Chevron has recently begun using poly- only about 4 percent of the OOIP. For the
mer flooding in its Captain field in the area currently under polymer flooding,
North Sea. In conjunction with Finnish the estimated ultimate recovery is now 23
chemical manufacturer Kemira, Chevron percent. About 8 percent has so far been
developed a new polymer designed to recovered according to Canadian Natural.
withstand the high-temperature, high- The incremental operating cost is about
salinity environment found in Captain $3 to $4 per barrel, and the capital cost is
field reservoirs. But there is one more about $13 to $17 per barrel of reserves.
important key to its use offshore. Lack of
Alkali-Surfactant-Polymer Floods
space has always been an impediment to
Operators in Daqing, China’s most prolific
using polymers offshore because dry poly-
oil field, have been using polymers for
mer is normally mixed onsite with water.
more than 30 years. But the explosion of
This new polymer comes in emulsion
new variants in polymers and other chem-
form and therefore does not need to be
icals has made Daquig a hotbed of EOR
mixed, only diluted with water. That can
field trials, including extensive trials of
save a lot of space that would have been
alkali-surfactant-polymer (ASP) combina-
devoted to additional equipment on an
tions.6 When suitable for the reservoir, the
already cramped platform.
alkali can greatly the reduce the amount
New Polymers for Heavy Oil of surfactant needed, thus lowering costs.
New polymers are now being applied to
After a highly successful trial by Cairn
heavy oil in Alberta in Canadian Natural
India in its Mangala field, ASP floods are
Resources’ Pelican Lake Field. A 2013 SPE
being implemented across the entire
paper on the project explains that “Pelican
field, one of India’s largest, in order to
Lake is the first successful application of
maintain peak production.
polymer flooding in much higher viscosity
oil (1,000–2,500cp) and as such, it opens a In conjunction with Petroleum
new avenue for the development of heavy Development Oman, Shell is testing
oil resources that are not accessible to ASP on both sandstone and carbonate
thermal methods.”5 reservoirs in Oman.

5 Eric Delamaide and others, “Pelican Lake Field: First Successful Application of Polymer Flooding in a Heavy Oil Reservoir,”
OnePetro (Society of Petroleum Engineers), last revised on July 4, 2013, accessed September 22, 2016, www.onepetro.org/
conference-paper/SPE-165234-MS.
6 Stephen Rassenfoss, “Daqing: An Old Field at the Center of New EOR Testing,” Society of Petroleum
Engineers, last revised June 5, 2014, accessed September 22, 2016, www.spe.org/news/article/
daqing-an-old-field-at-the-center-of-new-eor-testing.

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 Alkali-Co-Solvent-Polymer Flooding Low Salinity Waterfloods
UT-Austin is pioneering a new combina- Many years ago water was just water.
tion known as alkali-co-solvent-polymer Operators did not think very much about
(ACP) flooding. The co-solvent in ACP the composition of that water and its
is small, simple, and non-ionic, and it effect on recoveries. Now, a new area of
functions more effectively than alcohol, research has opened up as experiments
something that has been used as a solvent with low salinity waterfloods yielded
for more than 40 years. No surfactant is promising results. The best way to think
required, which reduces costs. ACP has about this research is as ion modification.
been tested successfully on heavy oils.7
Under the umbrella of “smart water,”
Hope for Fractured Carbonate Reservoirs researchers and companies are partnering
Half the carbonate reservoirs in the world to explore new electrolyte combinations
are fractured and tend to resist EOR tech- that work better than existing sources
niques. But the new class of surfactants of unmodified water. These new water
holds out hope that higher recoveries can chemistries by themselves yield unspec-
be achieved. Those fractured reservoirs tacular results—a few percent increase
represent 20 to 30 percent of the world’s in recoveries—but do so at very low
oil resources. With recoveries hovering cost. And, they can be combined with
around 10 percent, there is much to be other methods to make both more
gained if the new surfactants can increase cost-effective.
recoveries by another 20 to 30 percent of
Delayed-Action Particles
the OOIP. Small-scale tests suggest that
In conjunction with Chevron and Nalco
they can, but no large-scale trials have yet
(a division of Ecolab), BP has developed a
taken place. Mexico’s supergiant Cantarell
proprietary product called BrightWater.® It
field represents one of the prime targets
contains thermally activated particles that
for such new surfactants.
target injection water thief zones so that
CO2 with Surfactant the waterflood flows to where the oil is.
Not long ago UT-Austin researchers,
with help from Dow Chemical, achieved
something that others had failed to
achieve in 40 years of trying. They
found a surfactant that will dissolve in
supercritical CO2. The combination is
designed to improve the sweep efficiency
for carbon dioxide in high-salinity envi-
ronments up to 120 degrees Celcius.8

7 Robert Patton Fortenberry and others, “Use of Co-Solvents to Improve Alkaline-Polymer Flooding,” OnePetro (Society of
Petroleum Engineers), last revised October 2, 2013, accessed September 22, 2016, www.onepetro.org/conference-paper/
SPE-166478-MS.
8 Yunshen Chen and others, “Switchable Nonionic to Cationic Ethoxylated Amine Surfactants for CO2 Enhanced Oil Recovery
in High-Temperature, High-Salinity Carbonate Reservoirs,” OnePetro (Society of Petroleum Engineers), last revised April
2014, accessed September 22, 2016, www.onepetro.org/journal-paper/SPE-154222-PA.

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 Evolution and maturity of EOR

Steam
Miscible Gas
Thermal Gas-Oil Gravity Drainage
Steam-Assisted Gravity Drainage

Deploy & Repeat

Polymer Flooding

Low Salinity Waterflooding

Alkaline-Surfactant-Polymer
Process Maturity

High Pressure Steam Injection

Develop Contaminated/Acid Gas

Demonstrate
Optimize
Solvents

In-Situ Combustion / High Pressure Air Injection

In-Situ Upgrading (Heat)

Discovery

In-Situ Upgrading (Catalytic)

N2/CO2 Foam

Microbial
Hybrid Processes

Time

Source: Gary A. Pope, Professor of Petroleum Engineering, The University of Texas at Austin

New Directions in Thermal Recovery

Thermal recovery methods, such as steamfloods and in-situ combustion, have a long
history. The basic approaches have not changed much in decades. But one thing that has
changed recently is a new source of energy for steamfloods. It is a simple marriage of
renewable energy with EOR.
California-based GlassPoint Solar has been a leader with solar thermal installations to
power steamfloods in Oman, Kuwait and California. The company claims to reduce fuel
costs and carbon emissions by up to 80 percent. Interest in this approach is due in no
small part to increasing restrictions on greenhouse gas emissions. But rapid advances in
the technology are raising efficiencies and lowering costs to make it ever more competi-
tive with operations that burn natural gas.
Regarding in-situ combustion, improved pumps with tolerance for high temperatures
coming out of SAGD development may help revive a practice that produces very hot gas/oil
combinations in production wells.

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Future Directions for EOR R&D The Simple Ideas
Future directions for EOR R&D range Almost all EOR methods already in
from the exotic (for example, nanopar- widespread use have been designed
ticles) to the surprisingly simple (for with vertical wells in mind. Today, drill-
example, carbonated water). Right now ing horizontal wells is routine, and the
EOR projects contribute a mere 2 mil- industry continually increases its skill in
lion barrels per day to world production. doing so. But drilling horizontal wells
Of that amount, about 400,000 barrels to advance EOR is just in its beginning
come from polymer floods, between phase. This one simple idea could greatly
300,000 and 500,000 barrels from CO2 increase the oil available for EOR. The
flooding, and about 1 million barrels indications are that all existing technolo-
from thermal recovery. This total is larger gies will work better in horizontal wells.
than some other published estimates Of course, for existing fields without
because many projects remain under horizontals, there is the extra cost of
wraps while development proceeds. drilling them just for EOR operations.
But often new wells must be drilled any-
Given the estimated 1 trillion barrels way for most types of EOR.
thought to be ultimately recoverable
using EOR from existing conventional Another simple idea, carbonated water,
light and heavy oil fields, there is consid- seems too obvious and simple to be con-
erable value available—anywhere from sidered part of the future of EOR. In fact,
around $40 trillion at current prices to the idea has been around for decades,
over $100 trillion if the high prices of and a body of research already exists.
the early part of this decade return. Of With the proliferation of smart water
course, if oil prices remain low, EOR technologies, however, carbonation
costs would have to come down signifi- might now be taken seriously as part of
cantly for this value to be realized. a list of desirable traits for water used in
future waterfloods. The incremental gain
may be small, but the cost would be cor-
respondingly paltry.

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Nanoparticles
Perhaps one of the most exotic areas of EOR research is in nanoparticles. In general,
the idea is that nanoparticles could make current EOR chemicals more robust, for
example, make them less subject to degradation and adsorption. In the case of surfac-
tants, nanoparticles could help create more stable foams.
Nanoparticles could also pave the way for timed-release additives to EOR fluids. With
timed-release chemicals, well operators could not only get the effects they want but also
get them when they want them.
The timing of release is not the only consideration. In some cases releases might be
better keyed to pressure, temperature, and pH and other fluid characteristics.
CO2 Floods and Carbon Sequestration
With the new emphasis on reducing carbon emissions, government funding has
shifted away from fossil fuel research. What little research there is tends to be related
to sequestering carbon in existing reservoirs. Some CO2 is already being sequestered
by current reservoir floods. Research that demonstrates how more CO2 can be seques-
tered might receive government support in the future.
Look for any progress in this area from the major players in CO2 flooding including
Occidental Petroleum, Denbury Resources, and Kinder Morgan.
More Stable Chemicals
As companies drill in deeper and hotter formations, the EOR chemicals they use will
have to withstand temperatures up to 150 degrees Celcius Companies will also be drill-
ing in formations that will be increasingly saline, another challenge to those chemicals.
Though not revolutionary, incremental advances in stability brought about through
research will lower costs and expand the number and type of reservoirs that can be
targeted for EOR. Major players in this area include French giant SNF; Shell Chemicals,
a division of Royal Dutch Shell; and U.S.-based Stepan Company.

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EOR and the Shale Revolution proceeding with upgrading—and being
The so-called “shale revolution” has able to stop if prices fall without worry-
put U.S. oil production definitively ing about servicing debt often associated
on an upward trend for the first time with a large capital investment in surface
since Alaska’s Prudhoe Bay field began upgrading facilities.
producing in earnest.
We already know that enough heat in the
Along with that revolution comes a whole reservoir can cause some upgrading. But
new area of research for EOR. Recovery so far, this has not proven practical for
rates from these shale deposits are very widespread application. The addition of
low, in some cases only a few percent. catalysts might enable in-situ upgrading to
Little EOR research has been done on reach commercial viability. Just what those
these deposits, in part because their catalysts would be and how they would
exploitation has been so recent. But the be delivered to the reservoir are research
potential is huge—and so is the major subjects that could provide rich returns.
challenge: extremely low permeability.
Microbial EOR
Low oil prices have kept investors and com- Microbial EOR, either through introduc-
panies focused on drilling new wells in the ing novel microbes into the reservoir or
most economical areas of shale plays. Until inducing certain native microbes to grow
these sweet spots are exhausted and prices preferentially, has been a topic of research
head higher, any progress on EOR in shale for decades. But, there are few compelling
is likely to be stalled. But with 95 percent or results. A breakthrough here would be
more of the oil left behind, shale will remain significant because of the potentially low
a tempting target. cost—existing infrastructure could end up
being largely sufficient—and low environ-
In-Situ Upgrading
mental impact.
If oil, especially heavy oil, can be
upgraded while in the reservoir, com-
panies can avoid the expense of an
upgrading facility on the surface. In
addition, an operator can upgrade the oil
where and when it chooses, possibly even
in smaller reservoirs that would never
have justified the building of surface
upgrading facilities. The big advantage is
being able to wait for high prices before

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 Obstacles and Opportunities for EOR total R&D costs and commercialization
Several obstacles are slowing EOR investment costs in short-term and long-
research and development, chief of term; a win-win for a company’s bottom
among them low oil prices. While there line, academia and research institutes,
is little anyone can do about prices, other and industry.
obstacles are largely institutional. When oil prices rise again, those com-
Major EOR opportunities include building panies with a long-term outlook that
onto the existing CO2 infrastructure in have developed an EOR strategy based
the U.S. to expand CO2 flooding; offshore on collaboration and partnerships, and
areas such as the Gulf of Mexico that offer positioned themselves properly will be
new frontiers for EOR; and the Middle able to reap the rewards that EOR can
East, where national oil companies are provide. And as BP, Occidental and others
now requiring contractors and partners such as Pioneer Natural Resources are
to provide an EOR strategy as part of new proving through their success with EOR,
field development plans. the benefits do not come by chance and
are the result of incremental improve-
However, EOR research is fragmented. ments and optimization over time.
Researchers working in different areas— Therefore, the benefits can only be reaped
thermal, miscible gas, chemical and by companies who are prepared to rethink
microbial—do not communicate with their short-term and long-term strategies
one another well. If the last decade of and incorporate sustained discipline and
successes in EOR has demonstrated commitment to invest in research, devel-
anything, it is that combining approaches opment and scaling of EOR technologies.
from different areas can produce out- With a prize of 1 trillion barrels of oil
sized, synergistic results, and significant and expected increase in future demand,
progress in this field is made through col- perhaps the time to invest is now.
laboration and partnerships, which often
bring the best minds together, reduces

Figure 2. Physical effects of EOR methods. © Schlumberger. Reprinted with permissions from Schlumberger from Rifaat Al-Mjeni et. al., “Has the Time
Come for EOR?,” Oilfield Review 22 (Winter 2010/2011) 16-35. Available: http://www.slb.com/~/media/Files/resources/oilfield_review/ors10/win10/eor.pdf.

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December 2016