Middle East waking up to EOR

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Slow to develop in all but Oman, EOR is catching on in region, says DNV GL’s Moss Daemi

It is widely agreed that the age of so-called ‘easy oil’ is over as onshore and shallow-water fields deplete across the world. Indeed, it seems that production by international oil companies (IOCs) has already peaked.

Some Middle Eastern national oil companies may also be running out of ‘easy oil’. DNV GL data for Kuwait, Qatar, Saudi Arabia and the UAE shows that between 2000 and 2013 their production grew 33%, yet well numbers grew by 109%: more drilling but less incremental oil.

Results indicate that, to meet target production, these countries will need to increase wells drilled per annum from 1,156 in 2013 to 1,558 in 2020, a rise of 35%. “Enhanced oil recovery (EOR) therefore has a bright future in all Middle Eastern oil producing countries,” said Moss Daemi, director for DNV GL’s oil and gas business area in the Middle East, North Africa and India.

The current high and stable oil price is one major enabler of EOR. “It means our customers can expect a good return from the heavy investment needed,” said Daemi. “Other drivers include the need to arrest the decline in natural production, maximise recovery of oil and increase the return on existing assets.”

Small wonder that 54% of oil and gas companies worldwide are investing in EOR and similar techniques, according to research commissioned by DNV GL earlier this year.[1]

While these drivers apply to EOR in general, deployment in the Middle East is nuanced by the challenge of production from complex geology, as is the case in Oman.

“Oman is more advanced than a number of other Western countries in applying EOR,” Daemi said.

“Aside from Oman, Gulf Cooperation Council (GCC) states have not been much engaged in EOR historically. They enjoyed high rates of natural production from conventional, lighter oils. Saudi Arabia, for example, has some 250 billion (bn) barrels of conventional oil.

There are signs of change, however. Daemi sees EOR playing a prominent role in addressing three key issues for the Middle East as it plans to meet continued global demand for its oil; complex geology; a drive to access heavier crudes; and the need to prolong production from existing reservoirs. The prize is 970bn barrels of known reserves of heavy and extra-heavy oil, most of it undeveloped.

EOR uses gas injection, chemical injection or thermal recovery to improve the sweep efficiency in the extraction process. “There is no ‘one-size-fits-all’ EOR solution across the Middle East,” Daemi said. Neither is it easy or quick. “You need to gather a lot of data from the reservoir in a pilot scheme,” he explained. “It takes time to characterise a reservoir to select the most appropriate EOR method. Then it can take between five and 10 years before increased production offsets the additional cost of EOR.”

In Abu Dhabi, a 75-year onshore concession to foreign oil majors finished in January 2014. But a new concession has not yet been awarded as the Emirate ponders how to get commitments from would-be partners for maximum extraction of oil over the next 40 years. It is understood that the government is pressing for commitments of 60% or more oil recovery compared with a global average of around 22% for a typical oilfield.[2]

While full scale EOR implementation in both Abu Dhabi and Saudi Arabia is some way off, both are looking to carbon dioxide injection techniques to boost recovery, Daemi said.

“The Saudis are looking at gas injection and are very much involved in getting the best data out of their reservoirs so decisions about EOR methods will be easier.”

Kuwait is rebalancing production from high dependence on light oils to include more heavy oils from sandstones in the north of the country. A thermal EOR scheme, a full field steam injection project led by Chevron, is developing in the Wafra field in the Partitioned Neutral Zone between Kuwait and Saudi Arabia. The first phase of steam injection is expected to begin in 2017 to produce 80,000 barrels per day (b/d) with subsequent phases boosting this above 500,000b/d.

As an experienced organisation that has been involved in a number of EOR projects for customers, DNV GL can offer support on the best methods for a particular area and on the best sources of gas for injection. “We can carry out feasibility studies, helping the customer in decision-making for deployment of EOR,” Daemi said.

[1] Challenging Climates: The outlook for the oil and gas industry in 2014 can be downloaded HERE.
[2] Ivan Sandrea and Rafael Sandrea: GLOBAL OIL RESERVES-1: Recovery factors leave vast target for EOR technologies; Oil and Gas Journal, 11 May 2007