Middle Eastern EOR, Part 2

Georges Chehade, Booz & Company, Lebanon, David Branson and Anil Pandey, Booz & Company, UAE, argue that it is time for an integrated approach when it comes to implementing EOR projects in the Middle East.

Developing an integrated EOR strategy

As EOR projects are best developed and implemented before fields reach late maturity, Middle Eastern NOCs have a pressing need to develop integrated EOR strategies to maximise the oil recovery from their reservoirs. In developing such strategies they will need to ensure the integration of approaches within the NOC itself through amendments to the NOC operating model, but will also have to consider integration of other stakeholders and activities in the energy sector in their country, and seek integration within the region with other NOCs facing similar challenges. Integration requirements take a number of different forms (see Figure 2) and will require the concerted effort of participants across the energy landscape. In this respect, countries of the Middle East can learn from Oman’s experiences.

Figure 2. Considerations for an integrated EOR strategy. Source: Booz & Company.

Within the NOC

Within the NOC, successful implementation of EOR projects requires that all elements of the operating model – internal processes, resources and capabilities and organisation structure – support the activities required to identify and implement EOR projects. An initial consideration is to ensure an integrated approach to data acquisition, interpretation and management. This allows for detailed subsurface models required for the technical assessment of appropriate EOR techniques to be developed and shared across the organisation. Integration of disciplines across field operations and central support groups, achieved through changes to the organisation structure and/or processes, underpins the development of different production scenarios that allow potential trade-offs between current operations and EOR project implementation to be quantified in a transparent manner. Equipped with this knowledge, the NOC is well prepared to produce plans and associated targets that reflect uncertainties in project outcomes. In the case of Oman, such an integrated approach resulted in PDO consistently screening the entire portfolio of almost 300 individual fields to identify priorities for EOR project implementation, with different EOR techniques often piloted within the same field.

Based on a plan that incorporates scenarios and uncertainties, NOCs can allocate resources in a transparent fashion that recognises both short-term imperatives and those EOR activities that generate long-term value. Where necessary, organisation structures can be amended to ensure integrated approaches between operational and central technical study entities. For PDO, this situation was dealt with by assigning additional staff to the asset operations teams with specific responsibility for identifying longer-term value addition opportunities. Additionally, performance contracts for different parts of the organisation may also require alignment to avoid tension between short-term production targets and long-term recovery optimisation targets.

Within the country

Developing a more integrated approach within the NOC also often requires the alignment of a broader stakeholder community within the energy sector of the country. This is particularly important when expectations need to be managed with respect to expenditure on EOR projects that are only likely to reach fruition in the five to 10 years time frame. In Oman, this involved changing the emphasis with government stakeholders from short-term production targets to long-term sustainability and consciously positioning PDO as a champion of EOR technology. Aligning stakeholders around new realities may result in a revision to high-level NOC objectives. Such stakeholder alignment would also facilitate understanding and acceptance of increased operating costs that may be a logical consequence of increasing field maturity and the implementation of cost-intensive EOR projects.

With miscible CO₂ EOR seen as a potentially viable technique for increasing recovery from carbonate reservoirs, an integrated approach to the sourcing of CO₂ will require alignment with other ministries and government institutions. A common stumbling block to the sourcing of CO₂ from industrial sources is the allocation of costs and benefits among different institutions. Therefore, developing integrated economics to demonstrate the overall benefit of CO₂ sequestration to the country may be important in aligning different stakeholder groups. The implementation of EOR projects, which require specialised facilities and a continuous supply of injectants, may also present opportunities to develop local capabilities within new areas of the oil and gas supply chain.

Finally, as EOR projects are progressively implemented, existing markets and contracts may be affected. This is because implementation involves making trade-offs between short-term and long-term objectives and the composition of hydrocarbon resources that are produced changes and is allocated to different end-uses. To ensure a co-ordinated approach, countries will benefit from developing an integrated energy strategy that will allow activities across the energy sector to be co-ordinated in a way that maximises the overall benefit to the country.

Within the region

Integrating approaches to EOR between the main producing countries of the Middle East has the potential to generate considerable efficiencies given similarities in geology and operating environments. Increased co-operation may take the form of sharing data and experiences. Such collaboration may progress to the pursuit of joint research and development programmes among countries that recognise the constraints on research and development capabilities within the region, and in the industry in general. Oman was early to grasp the importance of research and development, leveraging the experience of international oil company partners in developing the Oman EOR study centre. In an ideal case, joint research and development might lead to joint piloting of EOR techniques to shorten the cycle time until a technical concept is proven and ready for commercial application. Finally, in recognition of common challenges in developing the power and water supplies that are necessary for large scale EOR implementation, Middle Eastern producing countries should not overlook opportunities to integrate power and water infrastructure.

Conclusion

As the NOCs of the Middle East increasingly turn to EOR to sustain and grow their production, they will need to address significant technical and commercial challenges and uncertainties to identify and implement the EOR techniques most appropriate to their reservoirs. As the example of Oman shows, there are also non-technical considerations to be addressed in developing integrated EOR strategies. To achieve success, NOCs will need to complement their technical and commercial evaluations with actions to align activities and resources within the NOC itself around an amended operating model, to align key external stakeholders and other participants in the energy sector, and seek opportunities to integrate activities with regional neighbours. Only through taking a fully integrated approach will companies be able to efficiently unlock the vast resources potential offered by EOR in the Middle East and exploit the opportunities to develop local capabilities that implementing an integrated EOR strategy will present.

Part 1 of this article can be reached here.

Adapted by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/exploration/27122013/middle_eastern_eor_part_2/