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Enhanced Oil Recovery: Can Chemical EOR Take Off?


In the second of three articles on enhanced oil recovery, research firm Visiongain looks at the prospects for chemical EOR, outlining why the least prominent of the enhanced oil recovery (EOR) methods is beginning to see significant growth.

Chemical EOR: A Checkered History

Chemical formulations act as a displacing fluid, thus lowering the interfacial tension or increasing the mobility ratio to enhance oil recovery. The use of chemical EOR methods hit its peak in the mid-1980s when a vast number of pilot projects were active, particularly in the United States. High levels of research and development (R&D) and rocketing oil prices encouraged abundant pilot projects focusing on a range of chemical formulations, including both polymer and surfactant testing. Yet, when oil prices plummeted in the 1980s’ oil glut, the costs of implementing a chemical EOR project became economically unfeasible. After the resulting fall in the number of projects, the chemical EOR market struggled to recover over the following two decades.

While thermal and gas-based EOR solutions have begun to contribute significantly to global production over the past decade – driven by oil sands development in Canada and carbon dioxide (CO2) EOR projects in the United States respectively – chemical EOR lags behind. According to Visiongain, thermal EOR techniques account for just over two million barrels per day globally, while gas EOR methods supply around 750,000 barrels per day. By contrast, chemical EOR contributes only 375,000 barrels per day, with just over 300,000 barrels per day of this figure stemming from China.

High Costs Tapered by Technological Breakthroughs

Historically, the chemical EOR market has been restrained by the high costs of setting up and operating a project, which can run into the hundreds of millions of dollars range, depending on the scale. Projects taking place in more complex environments, such as offshore, are more expensive still. With projects also needing to be customized to the individual reservoir characteristics, many companies have seen chemical EOR development as both costly and risky.

However, technological developments have enabled a significant shift in the economic balance in recent years, which, along with high oil prices, has helped to usher in a wave of new projects. The three key developments that have facilitated a reduction in the cost of chemical EOR projects are:

  • The concentrations of chemicals required, particularly surfactants, has been reduced substantially
  • The cost of the chemical per unit has fallen
  • The chemical EOR process is much better understood with increased efficiencies and enhanced reservoir characterization abilities

Chemical cost reductions and efficiency improvements have ensured operating costs have fallen to sub-$10 per barrel in some regions. With increasing efforts being put into R&D – both by oil companies and universities – and a number of pilot projects currently in operation, costs are likely to reduce further as more knowledge and experience is gained.

A Shift in Regional Activity

Alongside attitude changes towards the economics of chemical EOR projects, a shift in regional activity has also been witnessed in recent years. Despite possessing a commanding stake in chemical EOR projects in the 1980s, United States now ceases to contribute any significant production. Instead, China has become the global leader, with large-scale projects taking place in Daqing and Shengli fields, operated by CNPC and Sinopec respectively. Though China will maintain its dominance of the chemical EOR market over the coming decade, there are now 60 active chemical EOR projects taking place in a range of countries, including pilot projects and a few larger field developments.

In Canada, CNRL and Cenovus both operate commercial-scale projects in Pelican Lake, both of which have been in operation for more than nine years. These projects are unusual within the chemical EOR market in that they take place in a 14-degree API heavy oil field. In addition, Canada has 15 currently-active pilot projects, predominately located in Alberta.

Oman is embracing chemical methods as part of its EOR portfolio encompassing all three types of EOR technique. Petroleum Development Oman (PDO) commissioned the development of a polymer flooding project at the Marmul field in 2010 and has plans for expansion in two phases. The company operates three further active chemical EOR pilots and has several other prospective projects on the horizon.

Other countries with ambitious plans for chemical EOR development include India, Malaysia, Indonesia and Russia.

Chemical EOR: Potential is Vast

In terms of current spending and production figures, chemical EOR will remain the smallest segment of the EOR market for the immediate future. Yet the potential for chemical EOR development is vast in terms of both size and regional scope. Chemical EOR already surpasses both thermal and gas EOR methods in terms of the number of countries with active projects (14), while double-digit spending growth is anticipated over the next five years as pilot projects are set up and expanded. As such, chemical EOR is set to emerge from the shadow of its rival EOR methods to become an important technology on the global scale.

Matthew Jones is Energy Reports Manager at Visiongain where he writes and edits in-depth reports analyzing a wide variety of segments within the global energy industry.

Laura McIntyre is an Energy Industry Analyst at Visiongain. Her focus is primarily on offshore oil & gas developments and EOR.

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2 Comments on "Enhanced Oil Recovery: Can Chemical EOR Take Off?"

  1. rockman on Fri, 31st Oct 2014 8:51 pm 

    Just caught this story. Kinda boring. And I suspect many already understand that “chemical EOR” is many decades old. And actually there’s no such thing a chemical EOR per se. Chemicals have been used in conjunction mostly with water floods or steam injection. So those are the primary EOR methods. The chemicals just boost their efficiency some.

  2. Nimigje on Fri, 11th Nov 2016 4:14 pm 

    Chemical EOR are attracting more attention after China Polymer Injection field scale application and after Canadian field application on Pelican Lake heavy oil field.
    The polymer injection EOR combined with surfactants or alkaline need attention because the chemicals will be adsorbed from the rock and decrease the efficiency.
    The chemical adsorption from the rock will increase the IFT and the displacement efficiency will decrease significantly.
    The chemical EOR surfactant/alkaline and polymer injection work very well on laboratory only, because the adsorption is low on short cores. When we go on pilots on the fields, the well distance is high and the adsorption, mainly surfactants/alkaline composition will be consumed.
    The polymers may increase the oil recovery from conventional oil reservoirs by reducing the fluid mobility on more permeable portion of the reservoir, which are swept during water injection, and divert the polymer solution on other parts of the reservoir where water has not penetrated.
    The polymer injection may increase the recovery factor somewhere around 5-10% but with high injected volumes of polymer solution and water.
    Polymer solution EOR work better when the reservoir is developed with horizontal wells, rather than with vertical wells.
    Better displacement of oil happens when we use CO2 injection on miscible EOR.
    The polymer EOR can be used on conventional oil reservoirs where water injection has proved to be successful. The polymer injection can not be used on fractured oil reservoirs or on conventional tight oil reservoirs developed with horizontal wells and multifractures.
    The main challenge on EOR is the premature breakthrough of the injectant which lead on poor effectivity or on failure. This challenge can be solved with new EOR which are not disclosed and are under possession of a group of consultants who work on the oil industry and are making efforts to enter on cooperation with oil industry.

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