Page 217 - Primer on Enhanced Oil Recovery
P. 217

204                                           Primer on Enhanced Oil Recovery


         fluids, the reservoir conditions and make many laboratory tests. Feasibility studies
         need to be undertaken. Similarity data (data on application for the very close condi-
         tions), if accessible, are one of the best implementation guidance. The gathered
         information will make a solid foundation for the application and will allow to
         reduce the risk premium.
           Challenges are both, technical and financial. What is completely clear that the
         Enhanced Oil Recovery from the formation will add to the price of barrel of oil and
         might reduce the profit margin, at least on the short run. There are too many price
         and tax variables in the overall financial model to make the general statements of
         encompassing long term profitability. Many EOR processes require time to develop
         and one needs to project production, investment and financial returns for a quite
         few years ahead.
           Much information on costs were published by the companies on EOR results.
         The amounts are spread roughly from 10 to 40 US$ of additional cost per barrel.
         The EOR project is big investment and it requires decent financial modeling. It is
         prudent to plan for failure at the initial stages of implementation. It is much better
         if the initial plan accounts for possible “not as good as expected” results and has
         clear strategies to return to the planned oil production.
           Environmental concerns ought to be addressed by all industries, the oil produc-
         tion and further processing are no exception. It is impossible to make outright
         judgement on the overall impact of new technologies as all commodities, equipment
         and taxation policies change constantly. It is clear that the oil extraction will con-
         tinue for the foreseeable future. New technology and all processes will re-balance
         and will eventually find an average value which will reflect in the price of crude.
           Crude oil is probably the most volatile commodity. The oil price and production
         costs vary nationally and internationally. In many cases taxation regime makes
         from big to huge difference on the overall project returns. This is especially impor-
         tant for the Enhanced recovery. Environmental concerns will make significant
         impact on the whole oil business and this in the much greater extend will affect
         Enhanced Oil Recovery and its place.
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