EOR will grow and change in an era of recovery and technological advancement

In the midst of recovering oil prices, EOR is set for a big boost thanks to Big Data

Upstream, EOR, Enhanced Oil Recovery, Deloitte, Oil production

In the midst of the oil downturn, it was difficult to see a future for enhanced oil recovery (EOR). But with rising oil prices, EOR has found new growth and opportunity. It is not terribly complicated—when operators have money to spend, investing in EOR makes sense.

“At the end it’s an economic decision,” says Bart Cornelissen, leader of energy and resources at Deloitte. “You stop a field not because there’s no more oil, but because it’s no longer economically viable to extract the oil and process it.”

He also notes that extra barrels of oil recovered through EOR are worth less at $40 a barrel than at current prices, since the cost of extraction is closer to revenue per barrel. As a result, operators get a poor return on investment on EOR when oil prices are low. Cornelissen says this is particularly true of larger operators.

“If you’re a large NOC or IOC you also have a large overhead,” he says. “The larger operators’ fields need to be relatively significant for that to be economically viable.”

He notes that in some regions, like the North Sea, large operators sell fields that are nearing end of life to smaller operators.

Given that oil prices have risen, it makes sense to invest into research and development for EOR to maximise the value of hydrocarbon reserves.

In January, Abu Dhabi National Oil Company (ADNOC) said it would launch four EOR pilot projects, mostly involving water, gas and chemical injection at their fields. The company plans to increase its use of carbon capture, use and storage technology to boost oil recovery.

Meanwhile, Saudi Aramco won this year’s Oil & Gas Middle East and Refining & Petrochemicals Middle East award for HSE Initiative of the Year because of its CCS and CO2 EOR Pilot Project, another carbon capture initiative.

But the true game-changer is big data. With new technology, it has become easier than ever to get in-depth, real-time data about well performance.

“The combination of cheap sensor tech, larger data storage possibilities and better networks and also the possibility to process all that data, not just store it,” Cornelissen says. “We can use that to improve our production and extend the life of our reservoirs and that’s what EOR is all about. The big trend is digitalisation.”

But Cornelissen says the potential for big data extends past EOR—it’s about better understanding the reservoir, where oil remains and how to best extract it throughout the life cycle of the well. The more data is available, the less trial and error is required, which cuts costs and increases efficiency.

“The emergence of AI and digital-based solutions is the next natural step for the oil and gas sector to drive efficiencies,” says Simen Eldevik, principle research scientist with DNV GL Risk & Machine Learning, in an August 2018 report on artificial intelligence in the industry.

But including sensors and automating systems in oil and gas operations comes with risks; data breaches come in many forms, and could jeopardize the business, lead to system downtime or even compromise employee security.

Still, having a constant stream of data leads to better-informed decision making. Cornelissen recalls a time before digital technology, noting that operators were not able to understand reservoirs the way they can today.

Whether or not companies pursue EOR is heavily based on economic considerations—there is little else that would make oil and gas companies leave more than half of their product and potential revenue in the ground.

Having consistent, detailed and accurate data to inform decisions on well operations is key; Cornelissen says EOR isn’t a standalone subject.

“Enhanced oil recovery is part of an integral perspective on how to manage your reservoir in the most economical way,” Cornelissen says. 

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Oil & Gas Middle East - December 2018

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