December 4, 2017 Producing Oil and Storing CO 2 by Applying CO 2 EOR to the Residual Oil Zone: How Much and at What Cost? Thomas McGuire, PhD. and Derek Vikara KeyLogic Systems, Inc. David Morgan, PhD. National Energy Technology Laboratory
DISCLAIMER "This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof." Attribution KeyLogic Systems, Inc.’s contributions to this work were funded by the National Energy Technology Laboratory under the Mission Execution and Strategic Analysis contract (DE- FE0025912) for support services. 2
Motivation • The residual oil zone is potentially a significant source of oil • Also a significant sink for CO 2 if oil is produced using CO 2 EOR • DOE’s Office of Fossil Energy and NETL need tools to evaluate this potential resource • Update the CO 2 Prophet stream tube simulation program to address limitations • Created an onshore CO 2 EOR cost model to evaluate the economics of exploiting the ROZ • Generated geologic databases for the greenfield ROZ in 12 counties in the Permian Basin • San Andres formation • Grayburg formation • Models and databases are open source to enhance their impact and improve collaboration with interested parties 3
FE/NETL CO 2 Prophet Model • Features: • Originally developed by Texaco E&P for DOE in early 1990s • Stream tube simulation model used to solve multiphase flow equations • Can simulate 30 years of CO 2 EOR operations in 5 to 20 seconds per oil field • Original papers showed predicted oil production matching field data reasonably well • Limitations of original program (version 1): • Too little CO 2 to produce a barrel of oil; consequently, stores too little CO 2 • Makes CO 2 EOR too efficient and too economical compared to field data • Program modified (version 2) to address limitations • Calibrated key variables using field data from oil fields that have undergone CO 2 EOR; these calibrated values applied to ROZ analytic units 4
FE/NETL Onshore CO 2 EOR Cost Model • Newly developed tool for evaluating results of CO 2 Prophet analyses • Field level cash flow analysis of pattern production/injection data based on user specified development schedule • Contains capital costs, O&M costs, severance tax, royalty calculations, federal and state income tax and finance costs • Brownfield (conventional oil field) or greenfield (ROZ) development costs • Pre-tax and after federal income tax calculations • Evaluation of up to 10 oil prices, each at 5 CO 2 costs • Breakeven oil price for specific CO 2 cost also evaluated 5
Assessment Study Area Twelve County ROZ “Fairway” Resource Assessment Study Area in Permian Basin 6 Source: Kuuskraa, V. 2016. Using CO 2 -EOR, the ROZ and Carbon Management for Energy Independence. EOR Carbon Management Workshop.
ROZ Geologic Assessment Methodology • Logs were analyzed for wells which penetrated the San Andres ROZ and Grayburg ROZ • Digital Logs (LAS files) were acquired for wells • Established key volumetric properties and calculate Oil in Place • Working cross sections used to divide each county into geologically similar “partitions” • Porosity logs were calibrated to data from core samples. Pressure core used to calculate “m” and “n” parameters for Archie’s equation used to estimate saturations from resistivity logs • Each partition was divided into high quality and low quality “analytic units” • Required data for the FE/NETL CO 2 Prophet Model and FE/NETL Onshore CO 2 EOR Cost Model were collected for each ROZ analytic unit 7
Analysis Method Diagram of NETL’s CO2 EOR modeling system with software tools utilized ROZ Unit 1 Data ROZ Unit 2 Data Multiple Oil Field Python Scripting Tool Assessment Results, Graphs, Tables User Control Reservoir Data ROZ Unit N Data User Control Data Cost Data Data CO2 FE/NETL Onshore CO2 EOR FE/NETL CO2 Prophet Model Prophet Cost Model Results 8
In-Place Resource for Greenfield ROZ in 12 Counties Estimated In-Place Resource for San Andres and Grayburg Formations in Permian Basin In-Place Resource Higher Lower Formation Total Quality Quality (B Bbls) (B Bbls) (B Bbls) San Andres 195.3 137.7 57.6 Grayburg 18.1 14.8 3.3 Total 213.4 152.5 60.9 • ROZ was divided into analytic units • Higher quality analytic units had oil saturations of 25% or higher and porosities of 8% or higher • All other analytic units were classified as lower quality 9
Technically Recoverable Oil and Potential CO 2 Storage for Greenfield ROZ in 12 Counties Technically In-Place Resource CO 2 in Reservoir Recoverable Oil Formation (B Bbls) (B Bbls) (% OIP) Gtonnes San Andres 195.3 50.1 26% 30.5 Grayburg 18.1 4.3 24% 2.6 Total 213.4 54.4 26% 33.1 • Results are preliminary and • US consumes about 7 BSTB/yr • US produces 3 to 4 BSTB/yr should not be cited • US emits about 3.5 Gtonnes/yr CO 2eq from electricity generation and industrial use 10
Oil Produced and CO 2 in Reservoir as a Function of Oil Price for ROZ in San Andres Formation Average WTI oil price in 2017 • Results are preliminary and • US consumes about 7 BSTB/yr • US produces 3 to 4 BSTB/yr should not be cited • US emits about 3.5 Gtonnes/yr CO 2eq from electricity generation and industrial use 11
Conclusions • Greenfield ROZ in 12 counties in San Andres formation • Potentially significant source of oil (roughly 5 to 25 BSTB technically recoverable oil from $60 to $100 per STB) • Significant associated storage of CO 2 (roughly 2 to 10 Gtonnes from $60 to $100 per STB) • Greenfield ROZ in 12 counties in Grayburg formation • Economic analysis of Grayburg formation is still being reviewed • Initial results suggest the Grayburg ROZ may not be economical to develop as stand- alone greenfield sites with current CO 2 EOR technology and foreseeable oil prices • However, the analysis is preliminary and production strategies have not been optimized 12
NETL Resources • FE/NETL CO 2 Prophet Model, FE/NETL Onshore CO 2 EOR Cost Model and ROZ databases will be available on NETL’s website • OPEN SOURCE – Software, mathematical foundation of models, user manuals and ROZ databases • Reports on the geology and CO 2 EOR resource assessment for the greenfield ROZ in the San Andres formation and Grayburg formation in 12 counties in the Permian Basin in west Texas • Seeking feedback and collaboration with industry, academia and government agencies to test and improve these open-source resources 13
Contributors • NETL federal employees: • David Morgan, Donald Remson, Timothy Grant, Peter Balash (Team Lead), Kristin Gerdes (Associate Director) and Traci Rodosta (Technology Manager for Carbon Storage Program) • NETL site support contractors: • KeyLogic: Derek Vikara, Thomas McGuire, Chung Yan Shih, ShangMin Lin and Tyler Zymroz • Advanced Resources International, Inc.: Vello Kuuskraa, Matthew Wallace, Michael Godec and Robin Petrusak • The CETER Group: Nicholas Azzolina 14
Questions? 15
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