SPE

SPE 12753 Economic Model of Mobility Control Methods for COZ Flooding
by P.K.Pande and J.P. Heller, Mexico Inst. of Mining& New Members SPE-AIME
q

Technology

Now withohiolaska S A Petroleum Co.

19S4 Society of Petroleum Engineers of Al ME

Copyright

This paper was presented at the 19S4 California Regional Meeting held in Long Beach, CA, April 11-13, 1984. The material is subject to correction by the author. Permission to copy is restricted to an abstract of not more than 300 words. Write SPE, 6200 North Central Expressway, Drawer S4706, Dallas, Texas 75206 USA. Telex 7309s9 SPEDAL. ABsTRAm

cost procedureis used to evaluatethe A levelized cost procedureis used to determinethe A levelized under conprofitability of carbon dioxide flooding in differentmobility control alternatives non-waterf looded fields, and of the use of sideration. By definition,levelizedcosts are a thickening agentsfor mbility control. The effects streamof constantannualpaymentsover the life of with the same discountedpresent on production of changing the mbility of the the investment, injectai032 are estimatedby use of a correlation value as the actual stream of payments. When developed Clar by idge [1] from his analysisof the capitalas well as continuing yearly operationand costs are involved,the levelizedcost literatureon developed five-s@ patterns. The maintenance procedure shows that mbility controlcan be a@ied is the sum of the appropriatefixed charge rate +=hlv t-~ earhnn T-IPa++ f~QfM~ , &eater lay plus the levelizedstream times the capitalout . -... ~~Q~@ r~ -~* +2 profits result from operating at lower mobility of annual costs. The use of levelizedcosts pro=: c=-. ..$. :... > .4--*(Lll~ LIIV~UUllUJ L. ratios. The effect of varying criticaloperation --2-- a Ram Vlass Gf ~~ipL ...-- ULLACL &LL strategies; this case, a comitment to a Partiin and financialparameterson the profitability of i carbon dioxide floods is investgated. The ular mobility control altermtive with different profitabilityf the projectis highlydependent o on capitaloutlaysand annualcnst streams. the cost of carbon dioxide. The oil price, oil price escalation rate, carbon dioxide cost In this analysis, FortranIV computer a programwith escalationrate, and discountrate for discounting approximately0 inputvariablesis us- to perform 5 future cost and revenue stream affect the the engineer and economicamlysis. These input ing profitabilityof the project by an order of parameters reiate to operating characteristics magnitude less than the cost of carbon dioxide. (mbility ratio, amount of C02 injected, flood foam, or polymer C02 flood)l HWever, for conventionalcarbon dioxide floods, type - conventional, imti fimficial paramtem. carbon dioxide recyciing is @Jortaiit aiid ths field Ciia~ZCteiiStkS, recyclingaffectsprofits more than the parameters These parametersare initiallyset at base case t just mentioned previously.The cost, concentration,valuesand then alteredto investigatehe effectof and escalation rates of mobilitycontrolagentsare changesin the parameter profit. on important factors which affect the also profitability f mobilitycontrolled o carbon dioxide The program incorporates subroutinesto calculate whichoccursas a functionof time, floods. The fixed charge rate for capitaland the the oil recovery operation and maintenance cost escalation rate capitalinvestment costs, operationand maintenance affect the profitability of the flood but these costs,and crude oil revenueover time. The windparameters play a far less significant ole than any fallprofitstax, royalties, r and stateand localoil of the otherfactorsdescribed above. and gas severance taxesare taken into account. The programfinallylevelizes cost streamsand provides INITiODUCNON levelized(annualized)rofit which can be used to p conparethe differentinvestment altermtives. The EcOnOmiCconsiderationsre inportant a for determin- annualizedprofit does not account for overhead or incometax. ing whetheror not enhancedoil recoveryprocesses expenses the corporate will be appliedto petroleum reservoirs.The cbjective of this Wrk is to providea means by which to The oil recovery mdel incorporatednto the program i ccsneider costs and benefitsof mbility control is basedon the work of Claridge[11. It is assumed the for carbon dioxide flooding. The mbility COntKOl that the rate at which C02 is injectedand the with time. The oil alternativesinvestigatedinclude use of conven- mbility ratio remain invariant tional carbon dioxide flooding,and thickeningthe recovery model is applied to a non-waterflooded field. injectedCX)2 means of an additivesuch as foam by for mbility control[2, 31. or polvmers Fa2feremes ard illustratimsat end of paper. 261

EKXX?XIC ~ELOFIVKBIIJTY CONTROLMEIHCDSFUR CAREC.NIOXIDEFIOXUN D

The structure the programis mdular which allows of for efficien~ly incorporatinghangesto the model. c Futurerevisions capitaland operating to and maintenancecosts can easily be made. Differencesin the resultsfrom use of other oil recoverynmdels can be investigated. A case study for a hypothetical il field about the o size of SACROC in West rexasshowed that it is possibleto mike a profitby usingnmbility control. Profits are most sensitive to the cost of 022. Then, the factorsmost important towardsthe profitabilityfor all 032 floods are in order of importance, the oil price, oil price escalationrate, Q cost escalationrate, and discount rate for discounting futurecost and revenuestreams. These factorsaffectprofitsby an orderof magnitudeless than the cost of CX32. For conventionalC02 flooding,whether or not m2 is recycledand when q recyclingcomences is an importantfactor to the projects profitability. Greaterprofitsare realizedby operatingat 10WeK mcbilityratios. The application Claridges of oil pmdwtiofi rmel in thsze calculaticrsindi-~t.=e that a conventional03~ flood operating in a reservoir where the tiillty ratio is 60 will yield ~P,Q~ ~=~f as much. pc~fika- one with a lighk~ oil: where the nmbilityratio is 5. Greaterprofitscan also be realizd by use of thickenedU32 to artificiallydecreasemobilityratios. Use of foam or CJ22-soluble polymer to reduce the mbility ratio -_21---WUUh neai~x ~~u ~~e from fiVe down to one ... .. s PLOUUCS= profit. The levelized cost conceptused in this analysismay be applied tcwards evaluating other enhanced recovery processes. THE OIL FIEIJ) iin oil field characteristic a West !l&xas~2 of flood is selected to perform the engineeringand economic analysis. The characteristics of the reservoirmust satisfygeneral032 miscibleflooding screeningcriteria. Such criteria,along with +hnee *.. ~~he~ ~. ~r~qses; -have~~t~v been ... *nv discussed raber nd Martin [4] and are su&rized by a in Table 1. In addition, several existinu full scale c!& in5ectionDro%cts listed by &drich [5] haveM-&xsider& [n establishing the following fieldcharacteristics: 0 Reservoir porosity: 25 percent 0 Net pay zone thickness:20 feet 0 Reservoir depth: 7tOO0feet 0 _rature: 140F 0 Watersaturation:25 percent* 0 Production well spacing: 40 acres 0 NunbeKof existing production WellS: 64

SPE 12753 In addition,the oil formationvolume factor,%, is set at 1.10. This value for ~ is typicalof West !rexasfields amenable to C02 flooding. Tne nunberof reservoirbarrelsoccupiedby an MSCF of C02 is set at 0.40 for the pressureand temperature characteristics thisfield. of The field propertiesare assumedto be honmgeneous throughout the reservoir. The nunber of new injection wells which have to be drilled to complete a normal five-spot injection patternfor thisfield is 49. The hydrocarbonpore volume is about 75 million reservoir barrelsfor this field.

In this analysis,it is assumedthat the field has not been waterfloodti,o as to avoid use of the oil s -recovery mcxiel outside the range of applicability for which it is intended.
vu
fiTT

.-w,--

Drwmwrmv

hvmmr. .. . . .

AII

oil recovery nndel is used to derivea production schedulefor the CCq flood. The productionschedule is essential for performing the economicanalysis. The basic objective to providea production is scheduleas a functionof nmbilityratio and nunber of hydrocarbon pore volumes C02 injectedinto the reservoir. It is aSSUmSd that the injectionrate (nunber of hydrocarbon pore volumes of C02 injectedper day) does not vary over time and is ~~t~.~~ thzough~gtthe life of Ebe tertiaryoil recovery project. The mobility ratio is also assumedto be invariant over the life of the project. The mcdel used applies to a homogeneous isotropic singlelayerreservoir with viscousforces predominant ver gravityforces. A five-spot o injetionpatternis used.

Methodsthat have been used to pr~ict oil recovery f includethe following:mathematical rontaladvance calculations,otentiometric p studiesnot recognizing viscousfingeringin unstable displacements, experimental studieson dispersion rates for linear displacements,areal sweep efficiency studiesl and computer simulation ork. w Classicalwork that addresseshow mobility ratio influences oil recoveryfor misciblefloodingoperations include the works of Haberman [61t DYest Caudle, and Erickson [7], Caudle, Erickson,and Slobcd [8], BlackWell, RSne, and Terry [91, AKonofskyand Ramey IiOl~ and BKadiey~Heii&-,aiid Odeh [11]. The Model Claridge[11 in a reviewof the aboveand otherwork proposed simplified a oil recoverycorrelation hich w can be used to predictoil recoveryfrom a miscible displacement as a functionof mbility ratio and number of hydrocarbonpore volumes of solvent injectedfor a five-spotwell pattern. Figure 1, reproducedfrom Reference1, summarizesthe result of his model. In it, oil recovery in IOiSCi.ble floodingis shown for a fiv-spot well patternas a functionof mobility ratio and HCPV gas injected.

* Actually connate water saturation for fields whichhavenot beenwaterflooded.

3 P. K. PANDE J. P. HELLER WE 12753 convertingexistingproducingwells to m2 inje~ The mobility ratio is denoted by M, Fi is the existingwater hydrocarbon pore volume (HCPV)of solventinlected~ tion wells, and costs for converting and ~ is the HCPV of oil produced. injection wells to C02 injection wells. In this amlysis, 49 new C02 injectionWellS fOr The correlation shorn in Figure1 a~lies to a fivepatternare to be drilled. idge assumes a homogeneous, the five-spotinjection spot pattern. Clar isotropic, inglelayerreservoir. s For this analysis,no new production wells need to be drilledand existing production wellswill not be to wells. An algebraic set of equationsthat yield the curves converted C02 injection shown in Figure1 is given in Claridges paper [11. AppendixA reproducesthese equationsand extends The fielddevelopment costsare shownbelow in first [ them to enablecomputation the curvesfor cumula- quarter1984/dollars13]:* of tiveproduction and of theirslopes. 0 Drill new C02 injectors: normal cost for drilling,cxxrpleting, equippinginjector** and Recently, Claridge[121 has indicated that the model + incrementalcost of 120,000 + [($1.50)x may not be accuratefor predicting oil recoveryin !f!=~th, ft)j the range of iow mbility ratios (mobilityratio less than 1.0). The equationsconsidered are still 0 Drill new producer: normal cost for drilling, valid,however, for all mobilityratiosgreaterthan completing,nd equipping a well** one.
0 The model does give smoothlyvaryingand reasonable Convert existing producer to C02 injector: normalcost for conversion** incremental ost + c values for the decline in oil productionafter of $120,000 [($1.50) (depth, + X ft)] breakthrough.Because there are minor oscillations in the slopeof thesedeclinecurvesaroundthe time 0 of breakthrough,owever,cautionshouldbe used in h Convertexistingwater injectorto C@ injee comparingthe detailedpredictions this region. in tion: $120,000i [($1.50)x (depth, ft)l The additioml uncertainties are minor and do not affectpractical use of the correlation. m estimate the normalcost of drilling, of completing, equipping wells and normalcosts for converting In this analysis,the outcome of Conventioml C02 wells are requiredin order to estimatethe field floodingis comparedwith those resultingfrom the development osts. Thesecostsare now discussed. c use of thickeners such as m2 foams [21 or any w~ire~.t!hic@wsW [3] whichmy be develomd. WAG Normal CQst of Drilling,Cmmleting, and Equiminq is not includedin the comparison since this mbilWells ity controlmethodcannotbe easilymdelled by the same technique. Estimates for the costsof drilling, completing, and equi~ing wells are made by consultingAPI field CAPITALANDOPERATINGANDMAINTENANCEQ3TS C data [16]. This data sunmrizes by regionand depth ~nterval the coat of drilling, canpletingland equipping wells during 1982. The costs are scaled Discussedfirst below are the costs which apply to all of the differentoperatingalternatives modeled to first quarter 1984 dollars by use of the C2_lP flooding,and for mobility control: conventional inplicit pricedeflator[14]. use of foam or polymers;then the costs specificto each of the mbility controloperatingalternatives In this analysis,for a West Exas field at 7,000 considered are discussed. feet, firstquarter1984 cost of $70.00per foot is used for drilling, ccnpleting,nd equipping well. a a Operatingand maintenance costs are those attributable for the oil production after capitalexpendi- NormalCost for CDnvertinq ells W tures have been made. This includescosts such as labor,power,surfaceand subsurface equipnent maim Existingproductionwells may be reconditionednd a tenanceand repair,etc. The capitaland operating utilizedas injectionwells in a C02 flood. The expenseapresentedin this analysisare estimates cost of using existingwells dependson region,age only and may not be identical to the expenses of the equipment,and well depth. Workover costs an incurred for a particular field,duringa particular are the major mst elementfor converting existing production well to an E@ production well. year, or for a particular oil producer. These costs, hmever, can be representative f expenses o which will be incurredover the life of the C!02 flocdproject.

FieldDevel Oumentcost Consideredfirst are the capital costs associated with developing the field for carbondioxideflooding. Field developmentcosts include costs for drilling new ~ injectionand productionwells,

* AU costs expressedin first quarter 1984 dollars. Escalated firstquarter1984 dollarsby to use of the W implicit pricedeflator[14,151.
q

* DescKibed latersecticn. in

ECON3!IChKDELOF~BILITY~

MHITKJXK)R CARBONDIOXIDEFIDCDIIFG

SPE 12753

rhe cost of converting an existingproductionwell :0 a C02 injection well is estimatedto be $90,000 ?er well assuming the equipment was installed >etween1961-1970and for a West Texas field at /,000 feet [171. ~e~~kratinfl ~ud ~_inkemnce QStS rhe incremental operatingand maintenance costs for ?roduction wells attributable tertiaryrecovery to ire estimatedat $22,000 per year per production tiell131. [ l?he direct annual operatingexpense for injection iells is estimatedto be $70,000per well per year [18]. ?rovisions for workoversare set at $400,000per year. Lhe well operating and maintenance costsare characteristic a West rexas ieldat 7,000footdepth. of f m Equiment for Project Injection

details). Table 2 shows the values for how many MSCl?C02 is requiredper barrel of oil racovered as a functionof mbility ratio,assumingthat the economiccut-offfor any mbility ratio occurswhen the differentialil recovery o has been reducedto 25 bbl/KSCF of C02 injected. Under the density assumptionsnoted above, this correspondsto the point at which @p/dFi has declined to 0.1. Again,AppendixA shouldbe mnsulted to obtain the fulldetailsfor thisanalysis. TO calculate the percentage reduction in C02 requirementswith the use of foam in the 022 flood, the base case conventional 02 flood mbilC ity ratio is selectedand then the nunber of MSCF m2/bbl oil recoveredis quantifiedfrom Table 2. l!hen the foam 032 flood mobilityratio is selected to determine the reduction in ~2 requirements overconventiomlflooding. The use of foam will require additionalcapital expendituresfor surfactant storage facilities,
~~~~~gi ~~d ~~@c~~o~ SCW~P-f=: Dwn-!mle foam

rhe expense of C02 injectionequipment for the tertiary ret? ?ry project includes costs of all equipmentnecessaryto installa CX32flood in a depletedfield. The major items includedin this estimate are C02 storage facilities, injection plantand accessories, injection lines,and electriEication. This cost is estimatedat $95,000 per injectionwell which is characteristicf a West o Texasfieldat 7,000foot depth. COBTSPECIFIC EACH MOBILITY IQ UXBW3L METHOD Conventional Flooding 03> A (332 gas re~cling plant will have to be installedfor a conventioml flood. The capital cost for a recycling plant is estimated basedon the volumeof recycled gas to be processedin the plant [13]: mpacity 25 millioncubicfeetper day or less: $7,500,000 for 25 FLSCF per day capacity. IAssercapacity scaleddirectly. Capacitygreater than 25 million standardcubic feetper day: $7,500,000for 25 MSCF. Additionalcapacity scaledby 0.60exponent. The operatingcost is set at $0.200 per thousand ~lub~~~~~ of m~ reqded [13], f For this analysis,gas recycling occursafter three yearsof operation.After this time, 50 percentof the q injected recycled. is ~? Flooding with Foam Use of surfactants generatefoam will reduce the to requirements for purchasedQ frctn conventional a Co-2flood. This reductioncan be quantifiedby from Claridges mdel the use of Table 2 calculated for secondary-typefloods (see Appendix A fOr

generation couldbe used to avoid corrosion problems when foam and ~2 mix. However, down-hole foam generation has not been practiced and its costs are not well understood. m alternative down-holefoam generationis to to generatethe foam at the surface and make use of coatings and inhibitors o preventcorrosion. t In this analysis, the use of foam as a mobilitycontrolagentis estimated incura fixedcost of: to
$90,000 + [$4.00

x depth (feet)]Per injection

well The operatingand maintenancecost per injection well is estimated to double over conventional flooding. The operating and mintsnance costs will also includethe costof the surfactant. @ Floodinq with Polymers

If suitable~2-soluble polymersare developedand become availableas direct thickeners,their use would also reduce the requirements for purchased C02. For this analysis,the percentagereduction in 032 requirements which occur with the use of polymeKsas a mobilitycontrolagent is the same as thatwhichoccurswith the use of foam (seeTable2). The use of polymers would requireadditional capital expenditures for polymerstoragefacilities, mixing facilitiesand injection equi-pmnt. III this analysis,the use of polymersas a mbility controlagent is estimated incura fixedcost of: to
$38,000 + [$1.50 x depth (feet)]per injection

well. The lowercapitaland operating and maintenance cost assumption this case than that for foam reflects in SWiii~S iSSdlt@ SoSB2, but Perhapst ail, iiftii m fran the loweredrate of equipment corrosion when no water is injected.

264

The operatingand maintenancemst per ifi jactiofi well is estimatedto increase50 percentover convent ional flooding. The operatingand maintenance costsalso includethe cost of the polymer. CRUDEOIL REVENUE The marketprice of crude oil is one important factor which determines whetheror not a profitwill be realized from the C02 flord project. Crude oil prices determinethe revenuesthat can be obtained fran oil recovered tertiary by recovery and is a key factor in determining the rate of return possible for an EOR project. In this analysis,several factors which influence the revmue which will be obtained from the 032 flood are considered. These factors include the market price of crude oil, oil price escalation rate, royalties,severance,and productiontaxes, and the windfall profitstax. CrudeOil Price,Oil Escalation ate R In this analysis,a first quarter 1984 sweet crude oil price of $28.50per bbl is used [19, 20]. The crude oil escalationrate is tied to the general long-term UnitedStatesinflation rate and is set at 7.5 percentper year [14,201. ROYaltieS, State and Local Oil and Gas Severance and Production Taxes Royalties, stateand localoil and gas severance and productiontaxes, and the federalwindfallprofit tax reducethe crude oil revenuethat the producer ~~+~~p,~ In th.iS~n~~y~~~;fQr a west Texas m~ . flood,a royaltyof 1/8 (12.5%)[211 and state and localoil and gas severanceand production taxes of 4.6 percent[22]are used. Windfall ProfitsTax The CrudeOil WindfallProfit Tax Act (wPTA)passed by Congressin 1980 affectstertiary oil recovery as follows: Under the WPTA, incrementaltertiary oil is taxedwith newly discovered and heavy oil at a rate of 30 percent on net revenue over an averagetax base price of $16.55/bbl[23, 24, 25, 261. The analysis accountsfor thisprovision the WPTA of to tertiary oil recovery.

J. P. -HmLER 5 I.tr 1+-A ~S~ p~~ed~~~ e~~ be Ma to evaluate A &=vs~~e=differentinvestmentalternatives under consideration. By definition, levelized costs are a stream of constantannual paymentsover the life of the investment, with the same discounted present value as the actual stream of payments. When capitalas well as continuing yearlyoperationand maintenance costsare involved, the total levelized coat is the sum of the appropriate fixed charge rate times the capitaloutlay,plus the levelized streamof annual costs The use of levelized . rests providesa mans of comparing different investmentstrategies;in this case, a commitmentto a particularmobility controlmethod with differentcapital outlays and annualcost streams. The conceptof capitalrecoveryis an important one particularly n situations i where the objective to is place capitaland operatingcosts on an equivalent annual basis. Application of the capitalrecovery factor to todayscapitalcosts yields the annualizedcapitalcost (in the absenceof taxesand other complicating actors). For operatingcosts,a diff ferentprocedure calledlevelizations used to pri vide annualizedcosts. This process is described below. Levelization In levelization, seriesof equivalent a annualpayments is derived that are equivalentin present value to a seriesof varyingannualpayments. Operatingcostsare a typicalexampleof payments that can be expectedto vary over time due to escalations in fuel, labor, and materials costs. When such costs for a particularinvestment alternative are expressed an equivalent on annualbasis throughthe processof levelization,hese can be added to the t annualizedcapital costs of the altermtive for COS@ariSOn with the totalannualized costs of other investmentlternatives. a Mathematically,he processof levelization t can be shown as follows. First, todaysdollar equivalent (presentvalue) of varyingannual costs is representedas: Cj(l +Pj) + l+d +=,.
(1 + d)N

Cj(l+Pj)(l+Pj+ (1 + d)2

1) +...

Cj(l +pj)...(l +pj +N) (Equation 1)

where: FINANCIAL PARM4ETERS LEVELIZED 013T The financial parameters necessaryfor the economic analysisincludethe discountrate for discounting future cost and revenuestream, fixed charge rate for capital, O & M and materials cost escalation rate, cost of C02, and nunber of years the analysis C@+&s. The analysis is on a pr-tax and current dollar basis. Cj pj N d=
~j

n-<..;. y~~ - ~f tvlc+ v~~~~h~e ~e~ng = -=Y~~u-l~Y evaluated initial in year j = Price escalationof that variabie iii year j = Number of years over which levelization is performed Average discountrate over time period considered Present value of variablebeing evaluated in initial year j
.

. ;

ECCN141C MlX3LOF~CCNTIKIL

M131HOMFOR CARBCNDIQXIDEl?LCKD~ cost of mz

SPE 12753

Once the presentvalue has been cbtained,the process of annualizing (levelizing)proceeds as before. That is, the Presentvalue is simly multilevelized cost. Thus: ~. . (CRF)x (Ftij) where: LC is the levelized cost i(l + i)N factor= CRF is the capitalrecovery (l+i)N-1 An equivalentway to derive levelizedcost is to Calcuiatea levelization factor that, when multiplied by the cost in initialyear j, will yield the levelized cost. This levelizationactor is calcuf latedby usingthe following formula: (Eq&3tioii 2)

- ---.s m~ For tinis analysis,a deliveredaiidculllp~=aaul cost of $2.50 per MSCF for the base case is used [24]. This value is currentlytypicalfor a West Texas q flood. The cat assumes use of a 032 pipelinefrom a major C02 production area close to W-t Texas. Periodof Analysis A projectanalysisperiod of 10 years is used for the base case. This time frame is typical for investmentevaluationsof the type consideredin thisanalysis oil companies. at n.fi6.i + ..&*.

The annualized profit is calculated by subtracting the levelized capitalcost and levelized & M cost o from the levelized revenue. RESULTS

on 3) where: IF is the levelizationactor f

p is the annualprice escalation rate for entire ~~~ p@~~@_~; COnStankover entire levelization First, the objective of the model is reviewed period below Guidelinesare provided to help keep the . resultsin perspective: The FixedChargeRate The total annualized cost is conposedof annualized capital costs (also called fixed capital charges) and annualizedoperatingcosts. Annualizedoperating costsare obtainedby levelizing the streamof yearlyoperating costs associated with an investment alternative. The fixed charge rate is the rate that,when mltiplied by the total investment mat, yields the annualizedcapitalcost associated with Sriinvestment altematiw. Fm &lis afirysis,ile t fixedchargerate is set at 19 percent.
CI.-1.L:-.. --1. wwLaL&ulL ww n.& -Lea .

A description the oil field,oil recoverymdel, of capitaland operatingand maintenance costs, crude oil revenue, financial parameters, and cost levelizationhas been provided. A FortranIV computer prgram incorporating the items discussed has been appliedand pertinent resultsfran case runs of the mdel are provided. These resultsare used to make conclusionsregardingmobility control for carbon dioxideflooding.

The basic objective this work is to provide of a means by whiclidifferentmbility control alternatives or an oil field can be compared. f The use of levelized costs providesthe means of conparingthese differentinvestment strategieswith different capitaloutlaysand annual cost streams. In thi.c nnibl iti ie assull. khak when a par---..----; ticular mobility control method is applied under a ~rticuiar set of operatingconditions it will work with no problem. Whetheror not this will actuallyhappen, of course, is the subject of a detailed reservoir engineering study for the particularfield in question. This point must be consideredwhen conparing A466 -6-!. t-8--= c .1 +4,, uALAeLG&, =.8,-..%. LThe capitaland operating and maintenance costs presentedin this analysisare estimatesonly and may not be identical the expensesfor a to particular field,duringa particular year, or for a particular producer. The -.. 1-. -s: ~LvLL.=e.~mssed Lo t!!is m~lysis my net representthe actualprofitsobtainedfrcxn the investment.First,the profitsderivedare the outcanebased on premiseswhich are assumedto a five to twenty year time be valid over tram. me chancestmt theseassumptions ill w

For this analysis,the base case cost of materials will escalateat the same rate as the long term inflatim rate of 7.5 percent[14, 19]. These escalation parametersinciude those for khe cost of Q, operation and maintenance coats, cost of surfactants and polymers, and the oil price.

* The terms annualizeand levelizemay be used interchangeably. However, here we generally speakof level~zed operating costsand annualized capitalcosts.

266

SPE 12753

P. K. PANDE&J. P. HELJ.ER

actuallyhold true over this time period are very low. This analysisdoes not account for ccmpny overheadexpenses and the effectof the overhead corporate incczne tax. -ny expenses are not accounted for in this analysis because they vary widely depending upon the firms size and operationsefficiency. The corporate incometax is not considered since a profit (or loss)from a firmspetroleum operaby the loss (or profit) ti~p~ an be offset frcm other activitiesof the firm. In this analysis~ is not possibleto accountfor the it profitor lossfrom theseotheroperations.
0

7 Total capital costs are approximately 36.2 million dollars. Approximately percentof this mpital 65 cost is requiredto drill, Con@ete, and equip new C02 injectionwells. The capital cost for injee tor equipment for the @2 flood and for C02 recycling facilities represent about 13 percentand 3 percentof the totalcapital cost respectively. Operationand maintenance costs total approximately 51.8 million dollars per year while C02 is not recycled. After a)2 recyciing Camnences tie , O & M costs are reduced by shout 34 percent to approximately4.4 milliondollarsper year. O&M 3 costs for injection and incremental & M costs for O productionwells total about 3.8 million and 1.4 milliondollarsper year respectively.This reprsentsapproximately.3 percentand 2.7 percentres7 pectively of the operation and maintenancecost while C02 is not recycledand 12.5 percentand 4.6 percent respectively the operationand maintenof ance costwhen C02 is recycled. Levelized(annualized)rofit is approximately 0.5 p 5 milliondollarsper year. The levelized cost ~ nentsare as follows: 0 0 0 0 Levelized revenue: 114.9milliondollars Levelized capitalcost: 6.88milliondollars Levelized & M cost: 57.5milliondollars O Annualized profit: 50.5millicmdollars

The last Point concernsa basic Principleof this analysis. In this analysis;profit is used as a guidelinefor choosingan alternafzcters esse~.kialo choosing the t tiVE. ql,h,~ best altermtive could be maximizing production or extendingproduction over a longer time period. Maximumprofitsdo not alwaysprcduce maximumproduction.

At this juncture, the parameters for the base case analysis-areeviewed.r Base CaseParameters for OmwentionalCO? Flood and It is usefulto have a base case for describing capering the resultsfrom the computernmdel. The and base case parameters have alreadybeen specified are summarized for reference:
c
0 0 0 0

0 0 0

0 0 0 0

Conventional32 flocd 0 Mobility ratio: 30 1 C13Z injected: O.10HCPV/yr,8,622M4SCF/yr after3 years 50 percent~7 recycled wells, 64 produe wdi data: 43 nti injection tionwells Reservoir properties: depth of 7,000 feet, 40 acre spacing, net pay thicknessof 20 feet, porosityof 25 percent,connatewater saturationof 25 percent Oil Price,escalation rate: $28.50/bhl, .5%/yr 7 Royalty: 1./8, 12.5percent State and local severance and production taxes: 4.6 percent Discountrate: 15 percent FixedChar9eratefOr capital: 19 percent Analysis period: iil years ~ cost, escalation rate: $2.50/MSCF, 7.5%/yr @st of drilling, completing,and equi~ing well: $70/ft O & M cost escalation rate: 7.5%/yr

In this base case analysis,levelized operationand maintenance costs are approximately 8.3 times grea~er th levelizedcapital costs. Levelized profits* are about44 percentof levelized revenues. Sensitivity of OperationParameterson Profit for Conventional Flood (X37 The effect of varyingcriticalWrameters on costs and profits is now investigated the base case on conventional CCq flood described ahove. The parameters investigatedinclude mobility ratio, amunt of C02 injectedf oil price, oil price escalation rate, mmber of years analysiscovers, discount rate, fixed charge rate for capital,cost of 032, C(32 cost escalationrate, number of years until C02 recycling comnences, amount of C!@ recycled when CO? recycling comnences, and the raEe, 0 s H CCSt esealatxm All values are maintained those set at the base to case except the parameterbeing changed. Mobility ratiois consider~ first. Figure 2 shows the percentageoil recoveredand annualized profit as a functionof nnbilityratio. The annualized profit increasessharplywith lower mbility ratios. FOr eXZU@e, profitswill decrease 50 percentfor m~ floodingoperby approximately ationsin fieldsoperating a nmbllityratioof 60 at

Pertinentresults for this base case analysisare now cmsidered. Base @se Resultsfor Conventional@ Flood C The field under consideration has approximately 75 millionreservoir barrels of oil in place prior to 51 the C02 flood. Approximately percent of this oil is recoveredover a ten-yearperiod. Table 3 shows the oil recovery schedule,amount of 032 injected, MS@ C02 requiredper bbl oil recovered, and finaloil revenues a year-to-yearasis. on b

* Note that profits do not include overhead expenses and effectof the corporate incometax.

267

CCMTU3L~R2RCARBCXNDIEa3NmIc mDEL OF IK)BILITY

~DING

SPE 12753

vs. 5, 175 vs. 60, and 285 vs. 175. The profit shown for a particularmobilityratio can only be realized if the mobility ratio indicatedon the figure can be attained for a conventional032 flood. Figure 3 shows the effect of varyingthe amount of c02 injected on annualizedprofit. The mobility ratio is maintainedat 30. It can be seen that there is a point at which the amount of C02 injectedcreatesoptimalprofits. This occurs when approximately 0.112 HCPV of C02 is injectedper year for this conventioml032 floodanalysis. Also shown on Figure 3 is the trade-offbetween C02 cost and oil revenue (or oil recovery). More oil is recovered as rrore C02 is injected, but the cost of co2 increasesas more mz is injected. After the maxima in Figure 3, the additioml crude oil revenue obtained by increasedoil recovery, which occurs by injecting more C021 does not offset the increasing ~ cost which results in decreasing profits. The leveliz~ oil revenue is a direct functionof crudeoil price. Levelized oil revenues and annualized profit increases approximately3.2 million dollarsfor every dollarper barrel increasein the oil price. This represents approximately 6.3 pera cent increase in annualizd profit over the base case for each dollarper barrel increasein the oil price. A changein actualoil priceover an assumed oil price in the economicanalysiscan affect rev+ .4:s:n...4. ~l~e~
a+WLAUW&.

the annualized profit by nearly 0.90 million dollars. This representsan increase in annualized profitof about1.8 percentover the base case. The fixed charge rate for capital directlyaffects the levelizedcapitai cost and annualizedprofit. For our base case amlysis, total capitalexpenditures were approximately6.2 milliondollars. The 3 levelizedcapitalcost is abut 6.88 million dollars. The levelized capitalcost increases approximately $362,000for each percentage point increase in the fixed charge rate. This represents an increase of about 5.3 percent in the levelized capitalcosts and decreasein annualized profit of about0.8 percentfrcm the hse case. The cost of COz directly affects the levelized operationand maintenance cost and annualiz~ prrepresentsfrom about 89.9 percent of fit. T the tota O & M cost when C02 is not recycledto 82.8 percent of the total O & M cost when CQ2 is recycled. The levelizedoperationand maintenance cost increases about 19.2 milliondollarsfor every one dollar per M8CF increasein the cost of ~2. This decreasesannualized profit by nearly 40 percent from the base case. The C02 cost escalation rate almost directly affects levelizedO & M costs and annualizedprofit. The levelizedO & M cost increasesapproximately 2.14 million dollars for every one percent increase in the C02 cost escalationrate. Tnis decreasesannualizedprofit by about 4.2 percent ~.- +hn -. ken Pa.ae. A.-U ..---022 recyclingaffects the levelizedoperationand maintenance cost and annualizedprofit. Levelized o & M cost increases approximately.2 milliondol3 -- ~~, ~.a iars for each year CC12ii3CC~Ci@ i$ GAZijj&. decreasesannualizedprofit by about 6.3 percent from the base case. Levelized & M costs decrease O approximately402,000for each one percentof 032 $ which is recycled. This increases annualized profit by about0.80percentover the base ~se.

Levelized oil revenueand amualizd profit increase approximately .0 milliondollarsfor each percent3 age point rise in the oil price escalationrate. --This represents approximately 5.9 percxntiiicEease a in annualizedprofit over the base case for each percentage point increasein the oil price escalation rate. !rhus, decreasein the price of oil and oil price a escalation rate by 1 dollarper barreland 1 percent respectivelyan decreaselevelized c oil revenuesand annualizedprofits by about 6.2 miiiion doiiars. This is a decrease in annualized profit of about 12.2percentover the base case. Figure4 showshow the numberof years the analysis covers affects annualizedprofit. w the project life increases, more oil is recovered, but the rate at which oil is recovered declines. Annualized profitsare nuch higherwith a shorterprojectlife, since in this analysis, nest of the oil is recovered two to four years after breakthrough which occurs duringthe secondyear for this base case analysis. ~~nualiz~ profit increases over 65 percentwhen the project life is changed to 5 years frcm the base profitsdecrease case life of 10 years. Annualized a~roximately 30 percent and 50 percent when the projectlife is increased 15 and 20 years respecto tivelyfrom the base case. The discountrate for discounting future costs and revenues directly affects annualizedprofit. An increasein the discountrate of 1 percentincreases

The operationand maintenance cost escalation rate neariydirectiy a.fEeCtShe ieVeiiZed & M 03St aiid t G annualized profit. LevelizedO & M costs increase approximately $371,000 for each percentagepoint . ~n t.IIe u a LT Vwb -- . =..1.+;- rake. ~*~~ ~~p~~ -SA=.L=. rise .- L- n . u -.-.+ sents a decreasein annualized profit of about 0.73 percentfrom the base case. Base Case Parameters for Foam and Polymer COZ Floods The base case for a foam or polymer m2 flood parallels the base case conditions specified for the conventional ~~ flcmd with the following inportantdifferences: 0 Mobility ratio: 5 0 Percentagereductionin ~ requirements over conventional floodingwith the use of foam or polymers a mbility controlagent: 29% as 0 Costof surfactant:$500/bbl 0 Surfactantconcentration:1% with foam having 20% water

P. K. PANDE & WE 12753 0 Surfactant cost escalation rate: 7.5%/yr 0 cost of polymer: $100/bbl 0 Polymerconcentration: 1% 0 polymercost escalation rate: 7.5%/yr ymer 02? Flood 6aseCaseResultsfor Foam and Pol Again,as in the case of a wnventional C@ flood, the fieldsize is about75 millionreservoir barrels oil in place prior to C02 injection. Table 4 shows the oil recovery schedule, amount of 022 injected,MSCF ~ injectedper barrel oil recovered and final oil revenueon a year-to-year basis for both the polymer and foam 032 flood. Total recoveryis 69 percentof reservoir oil when poly~r~ or fo~ are USed a,s mobilitycontrolagents, since in this mobilitycontrolled case, a mobility ratio of 5 was used vs. a mobilityratio of 30 for flood. The conventional the conventional ~ C02 flood yieldeda recoveryof 51 percent of the reservoir oil. The total capital costs are approximately40.8 million and 37.4 million dollarswith the use of surfactantand plymer respectively as a mobility control agent. This is an increaseof about 4.6 million (13 percent) and 1.2 million dollars (3 percent) with surfactantand polymer use respectivelyover the capitalcostsfor the base case cmventional ~ flood. ~ratiGn and ~.i~ten~nce costs increasewhen for polymersare used as mobilitycontrolagentsdue to the cost of the surfactantand pOlwr.5. The total annualo & M costswith use of foams or polymers total 47.0 million and 45.3 million dollars and polymer cost are respectively.The surfactant both about5.3 milliondollars per year. m.. -~ -s .u..a..~... ~~ymers represents . but Lne ..L WA .,*.P += += or 12 percentof the total O & M cost. The levelized O & M costs increased from the conventional CD2 flood by about 22 percent and 18 percent respee The tively by the use of foams and plwrs. increaseoccurs since c?22is not recycledand due to the increased & M costs for injection O and prductionwells. HOWeVer,this is offset in part by the reductionof C02 requirements with the use of foamsor polymersfrom convationalflooding. The levelized profit is approximately 60.0 million dollars when foam and 63.3 million dollars when polymers are used for mobility control. The levelizedcost and revenue componentsfor the foam Q floodare: 0 Levelized revenue: 138.3milliondollars 0 Levelized capitalcost: 7.75milliondollars 0 Levelized & M cost: 70.5milliondollars O Annualized profit: 60.0milliondollars For the polymer032 flood, the levelizedcost componentsbreaksdown as tol.bws: 0 0 0 0 Levelized revenue: 138.3milliondollars Levelized capitalcost: 7.11millicndollars Levelized & M oxst: 67.9milliondollaKs O Annualized profit: 63.3 milliondollars

~ J. P. HELLER , Sensitivity of Surfactant and Polymr cost Concentration, Escalation and Rateson Profit At this juncture, the effectof changingsurfactant or polymercost, concentration, escalation and rates on the levelizadO.& M cost, which wiii in tiurn di~eck~yaffe~~ &he annualized Drofit8 is investigated. As in the case of conventionallooding, f all variables are set at the base case valuesexceptthe one being investigated. The cost of surfactants and polymersand their concentration directlychangeslevelizedoperationand maintenancecost and annualizedprofit. The surfactant or polymer cost escalation rate nearly directly affects the levelizedO & M costs. The :--a. levelizedO & M cost increaseper unit Ji~VLC&ein cost, concentration, escalation and rate as sunnnarizedbelow: InCreaSe levelized & M costwith: in O
0 0

0 0

Surfactant cost increase $10/bbl: $159,000 of Surfactant concentrationincrease of O.1%*: $792,000 Surfactantcost escalationrate increase of 1%: $374,000 Polymercost increase ti*O/bbl: of $792,000 0.1%: Polvmer concentration increase of $795,000 Polymer cost escalationat increase of 1%: $374,000

Annualizedprofit will decrease approximately 1.3 percent and 0.6 percent for the unit Chan9eS describd above in surfactantand polymer concentration and cost escalation rate respectively. Annualizedprofit decreasesabout 0.3 percent and 1.3 percent respectivelyfor the unit changes described above in surfactant nd ~lymer costs. a Figure5 shows hcw annualizd profit increases with decreasingmobility ratios for foam and polymer C!02floods. Annualized profits increaseby nearly 30 percentwhen operating a mbility ratio of 1 at vs. 5 for both foam and polymerfloods. Annualized profitsdecrease approximately5 percentwhen oper2 atingat a mobilityratioof 10 vs. 5 for both foam and polymerCD2 floods. The effect of changingthe variables investigated for conventionalQ flooding have a more pronouncedeffectwhen foams and polymersare used as mobilitycontrolagentssince capitalcosts, operation and maintenancecosts, and oil revenues all tend to be much higher than that for conventional C02 flooding. CONCLUSIONS The economicviabilityof a C02 flood is highly dependent upon many parameters.Tables5 and 6 SUmmarize the percentage change in amualized

* Have 20% water in foam.

10

EmFKNIIc NrmrLo I@BILJTYalTrRoL ME!IHmS~ F

DIOXIDEFIOODING

SPE 12753

profitsfor unit changesin the operation and financial parametersinvestigated for conventional 022 floods and for foam or polymer 032 floods respectively. A change in the cost of CX32affects annualized profitsmuch more than a changein any other operation or financialparameterfor conventional, oam f or polymer C02 floods. However,a change in the cost of 032 does not affect annualized profits as much for foam and polymer C02 floods than conventional ~ floods due to the rcxluction in C132 requirements when foam or polymers are used as mobilitycontrolagents. For this analysis,a one dollar per MSCF change in the cost of ~ affects annualized profits6.3 timesmore than a one dollar per barrelchangein the price of oil for a conventional C02 flood. However, in this analysis,for a foam or polymer022 flood,a one dollarper WK!F change in the cost of m2 affectsannualized profits only about 5.1 timesmore thana one dollarper barrelchangein the priceof oil. 61A=. the nther parameters =-. ..- --- ---Far Caricsle Gz .*, icmal nmt crucialto annualized profitsare rankedbelow in orderof importance:

Again, as in the case of conventional W2 fiooding, the oil price escalation rate affectsprofits mre than the C02 coat escalationrate. However, the oil price is nme inportant than the oii price ese~laEiQnEate or the 06 cost escalationrate. A one percent change in the discountrate affects annualized profitsthree timesmore than a cne percent change in the polymeror surf actant concentr ation. A ten dollarper barrelchange in surfactant cost does not effectannualized profitsas much as a ten dollar per barrel change in the polymer cost sincesurfactants are much more expensivethan polymers. A one percent change in the Surf aCtant or polymer cost escalationrate affectsprofits about 11 times less than a one percentchange in the oil price escalation rate. A one percentchange in the fixedchargerate for capitaland O & M cost escalation rate affectsannualized profit about 50 times less than a one dollarper 14SCF change in the cost of 032. Nobilitycontrol for C02 floods can be a profitable venture. A higher annualized profit was r~_~iz@ for a foam or -pol-ymer flood than for (X3.2 a conventional C02 flord for the base case analysis:

0 Annualized profit of 60 and 63 milliondollars Oil Pice 0 Nunberof yearsuntilC02 recycling ccmnences for foam and polymer C!02floods respectively 0 Oil priceescalation rate vs. 50 million dollars for the conventional 032 cost esalation rate CQ flood. 0 Discount rate 0 Amount of C02 recycled when ~2 recycling The levelizedcost procedureused in this analysis ccamnences can also be appliedfor evaluating the economi~ of 0 Fixedchargerate for apital otherenhanced oil recovery processes. 0 0 & M cost escalation rate APPENDIX A For a conventionalCQ2 flood, a one dollar per barrel change in the price of oil will affect IIIthis Appendixare given the algebraicequations AA.. -m A.... w-!. --at++,,+* .riAmal Aal -1 a-=. .. Q W--- [i] =~~ f~~. which Snnlla iizedprofitsa= much aS if the C02 CSCCyCih& hLIa!. plant were delayedone year. lhe price escala- Figure 1 can be calculated. These equationsare oil tion rate affectsprofits nme than the CX12cost also utilizedhere for furthercomputations.They escalation rate. A one percentchange in the digive the oil productionNp from a fiv-spot pattern as a functionof the anmnt of solventinjetted courk rate affects annualizedprofits about two times nmre than a one percentchange in the amount Fi, and Of the tiiiity ratiO ii. Both i% aiid Fi are given in terms of the hydrocartxmpore of 022 recycledwhen 032 recyclingccmmences. A unit. A one percent change inthe fixed charge rate for volume (HCPV) of the fiv-spot Sptry -.. -..: . .,.. 14=. vaL L i*1- are =1= def~m.~and null&L capital and o & m cost escalation rate affects ---- of auAL*Kaby annualized profitsapproximately 0 times less than used These include (Fi 5 . )m, the amunt of SOlvent injettedto the pointof breakthrough: a one dollarper MSCF changein the costof (X)2. For foam and polymer fhods, the parametersother than the ocst of 032 which are most crucial to annualiz~ profits are ranked below in order of importance:
0 0 0 0 0 0

(Fi)~ = [0.90/(M 1.1)1-50 +

(Bquaticn 4)

and ~o, the modifiedmobility ratio introduced by Koval [271: ~oo = [0.78+ (0.22 ( ) MO*25)14*00 (Equation 5)

~~~

mice =---_

e
0 0 0

Oil priceescalation rate C!Q cost escalation rate Discount rate SJrf actantcost (forfoam 032 floods) polymercost (forP@ner Q floods) Surfactant polymerconcentrate or icm Surf actantor polymercost escalation rate O & M cost escalation rate Fixedchargerate for capital

Claridgesorigiml formulation of his results is givem in the form: Np -( Fi)BT

= (A)(G)S = c1

(Equation ) 6

- %

Sm 12753 here: 061) A= 1.6/(M~~ G=[Fi - (Fi)~]/[1- (Fi)~]

P. K. PANDE

J. P. HELLER Fi

11 HCPV solventinjettedfor a fivespot well pattern Nunber of HCPV injected at breakthrough, the value of Fi at breakthrough Hydrocarbon ore volume p Levelized cost Levelizat factor ion Mobilityratio (for displacingfluid/ displaced fluid) Kovalsmodified viscosity ratio Nunber of years over which levelization is performed HCPV oil producedfOr a fivespot well pattern operations and maintenance Annual price escalation rate over entire time period N, COnStant over entirelevelization period Priceescalation rate in year j year j Presentvaluein initial WindfallProfitl?ax Act

(Equation 7) (Equation 8) (Equation 9) HCPV Lc (Fi)~

026) s = 1.28/(Mko relation for Np: Ihisieldsan explicit y ~= [~+ (Fi)~]/1 + c1

(Bquation 10) LF (Equation 11) M NO N

that can be differentiated yield to the Slope:

~=~xyp
d?i dC dG m)

= [Ls)(A)(G)*l

V[(C + 1)21

These equationsneed only be expectedto hold for times after breakthrough.Before that point, i.e., for Fi (Fi)~, we can expectthat: Np = Fi dNp = 1 ~ the reductionin 032 requirements For determining with the use of foams or polymers,first the value of NP and Fi when dN~dFi is 0.10 is determined. This is the assumedeconomiccutofffor all floods being compared. Then, for this analysis using 2.5 MSCF per bbl C02, we obtain the results for how many mm ~2 is required per bbl oil recoveredcan be obtained. These resultsare summarizedfor different mobility ratiosin Table2. % = (2.50) ~ BBL Oil Recovered Fi at%=olo . dFi (Equation 15) McF C02 (Equation 13) (Equation 12)

% O&M P

Pj PVj WFTA

ACKNOWLEDGEMENTS The authors are thankfulto New Mexico Petroleum Recovery ResearchCenter,and to SOHIO AlaskaPetroleum Companyfor permission publish this paper. to Most of this work was performd while the first author was at the New Mexico PetroleumR@COVery ResearchCenterof the New Mexico Institute Minof ing and l?echnology, duringwhich time sane support was providedby variousresearchcontractsfrom the U. S. Department Energyand the New Mexico~ergy of Researchand Development Institute the Petroleum to RecoveryResearchCenter. Gratitudeis expressed to theseagencies for theirsupport.

The percentagereductionin ~ requirements with the use of foam and PIPS may be calculated by selecting the base case conventional032 floOd nmbility ratio and reading the nurber of KS@ Q@bl oil recoveredin Table 2. Then the foam or polymer 032 flood nobility ratio is selected frcm which and the reductionin CS22requirements over conventional100ding f can be determined.

Formation volumefactor Beginning year cost in initial year j Capitalrecovery factor AVeragedisc~l~n~ rake over time -period considered

. REFERENCES .

ion of Recovery in Claridge,E. L.~ Predict UnstableMiscibleFlocding, Societyof PetroleumEngineers Journal, April~~. Heller,J. P., Lien, C. L., and Kun~kkula, M. S., Foam-Like Dispersions for MobilityCOntrol in C02 Floods,-SPE 11233 presentedat the 57th Annual Fall MSetin9, New Orleans, Septenber 1982. Heller,J. P., Dandge,D. K., card~R. Jor and for MobilDonarmwa, L. G.? DirectThickeners ity Control in C02 Floods~ SPE 11789 presented at the SPE International Synposiumon Oilfield and GeOthe~l Chemistry, Denver, June 1983. Taber, J. J. and Martin~ F. D.t Technical ScreeningGuides for the EnhancedRecoveryof Oil, SPE 12069 presentedat the 58th Annual Fall TechnicalConferenceand Exhibition, San Francisco, October5-8, 1983.

13. National Petroleum Council, EIIhanCed Oil Recovery, 1976,pp. 148. 14. Survey of Current Business, United States Department of Cbmnerce, Bureau of ECOn~iC Analyses, December1983. 1.5. Survey of Current Business, united States Department of Comnerce, Bureau of Econ~ic AMlyses, June 1976. 16. American Petroleum Institute, 1980, Joint AssociationSurvey On Drilling Cbsts, M= ber 1983Edition, December 1983. 17. National Petroleum Council, Enhanced Oil 1976,PP. 86. Recoveryl 18. National Petroleum Council, Enhanced Oil 1976,pp. 82. Recovery,

I ,.

).

1.

5.

6.

1 r.

Energy 19. PetroleumEconomist,The International JouKnal,PetroleumPress Bureau Ltd., IDndOn~ England, January1984. Goodrich, John H. (principal Investi9ator)l Gruy Federal Inc., TarcIet ReservoirsfOr 032 Miscible Flooding - Final RePOrt, voiume I: 20. U.S. Departmentof ConmercelBureau of Labor Statistics,Division of Consumer Prices and Discussionof CO InjectionProcess, volume : Full Scale and PilotTests,DOE ReportNo. Price Indexes, Washington,.C. D ~E/MC/08341-17, October1980. R A 21. rexasailroadcommission?ustin~Texas. Haberman, B.~ The Efficiency of Miscible Displacement a Functionof MobilityRatio, as State and r.ocal 22. AmericanPetroleumInstitute, Oil and Gas Severanceand ProductionTaxes, TransactionsIME 219 (1960)# A m. 264-272 November 1981. ~. nT,amA % , Palliila. u.. ~g)~ Erickson -------; -. -.--.-, ~=~f, Oil Production After-~eakthrough As 23. Bushell,Gary, Branscorkand Millert PrlCinq, Taxation for Tertiary Projects,Oil and GIS Influencd By Mobility RatlO, Transactions JOUKIEdt June 30, 1981,PP. 98-102. ~201 (1954), PP. 81-86* Caudle, B. H., Erickson,R. A., and SIObod, R. L., The Encroachmentof Injected Fluids Beyond the Norti Well Pattern,Transactions ~204 (1955), PP. 79-85o Blackwell,R. J., Rawer J. R., and Terryt the Efficiencyof W. M., FactorsInfluencing Miscible DiSplaC~ent, Transactions AIME 216 (1959), PP. 1-8. CharlesW., Fuller, Keith L., and 24. Bloonquistl Maranville, Michael B., MiscibleGas mhanced Oil RecoverYEconomics and Effectsof the Windfall Profit TaX~ SPE Paper No. 10274, October 1981. 25. Burke, Jr., F. M., and BowhayI R. W.~ ~ Income Taxationof NatUralReSoUKces,chapter 31, PrenticeHall, Inc., EnglewoodCliffs,New Jersey. 26. 96th @ngress, UnitedStatesof America,Fublic J.dW96-223 - WindfallProfit Tax on Domestic CrudeOil, April 2, 1980. the Per27. KOVal,E. J., A Methodfor Predicting formanceof UnstableMiscibleDisplacement in H$SteKOgt3N2WSMedia, SoC. Pet. Enq. J. 3 (1963)145-154. 28. Pande,PankajKumar,EconomicModel of Mobility controlMethodsfor CarbonDioxideFlooding - A Thesis, New Mexico Instituteof Mining and !lethnology, September 1982.

8.

9.

Lo. Aronofsky, J. S.~ and RaIIISYt J., Mobility H. on or Ratio Its Influence Injection Produe , tion Histories in FiveSpot Water Flood PPO 205-21O* TransactionsIME 207 (1956), A H. 11. Bradley~ B.~ Heller~J. P.~ and Odeht A. S.t A Potentionetric Study of the EffeCtS of Mobility Ratio on Reservoir F1OW Patterns? Society of PetroleumEngineersJournal, Septenixri96i,~. i25-i29. 12. Claridge, E. L.~ Personal Communication, ---University Houston,AugustlYtKZ. of

TABLE
C02 FLOOD
Smmccess:

1
CRITERIA BASE CASE

TABLE

4
C02 FLOOD RESULTS

SCREENING

FOAM AND POLYMER

C02F100ding
Swsest ed value or Characteristics Percent Earrds cm 3S4%P >26~ (>30. F3NAL OIL ~ilc&z%&z%rti($) Revenue

Oil Prce rtiea API OraVity(l) Vismsity, C@) .o)qaWitial(l)

preferred)

Year

Recovered Recovered

Meted

<15

(C1O is preferred)

stgh percentage of inteme2irJte (q-q(l), VItilr %-Q hydmcacton is *ired

1
2 3 4 5 ? 8 1?3 mtal : 3: 8 7 : ; m am 26,771,932 5,4S8,720 4,891,922 3,939,938 3,167,086 2,571,455

Remrvoir ammcteristics m of POtmtic+t(z)

Swested
sandstme

Value or or

Characteristics

13,227 13,227 13,277 13,277 13,277 13,277 13,277 13,277 13,277

1.98 2.34 2.71 3.37 4.19 5.16 %=

634,347,243 142,280,229 130,170,451 321,234,636 94,9U,809 81,910,107

with mmatial(z~ miniam fracturesand high-pe~ility streaks

carbui.at e

Mpth,

ft.(l)

>2,000 ft--deq pressure

T.3pmture,

-h

to AUOU

hi@

Reservoir

< 250F tqature ~mc~i~i~d

(messure

remired

increases with

Averw

PmmeaM2ity,

ml

jif suffIcimt inj6ctim rates can

TABLE
oil saturat im lhicknms of Pay zone,
ft.

5
PROFIT AND FINANCIAL C02 FLOOD
Percentage akmg

>3m

Vp

PERCENTAGE
is StQly Re2at1W21 thin UILI- fcC~tim diwing (in !Aich cu!e, frmta3 stabi3izati0n may ~ible, be by taking advantAgeof gIaVitY)

CHANGE

IN ANNUALIZED

FOR UNIT CHANGE IN OPERATION PARAMETERS

FOR CONVENTIONAL

Additimal Omsidecat ions efftciency (smk?ttms ca21ed (1) Pressure rewired for optimm diaph=mnt mintmm miscibility pfessure) racqes frca about 3200 p9i for a light* ( 30 API) crude oil at km tenmmtures to over 4500 wi for heavy crudes at hi.ahert~ratures. iherefoce, high percentage of li9ht a is desired.

-meter ~
oil Price
oi2 Price

unit cfmwe
+18/t41

In Mnua3izad E&it
+ 6.3 + 5.9 +1.8 -0.8 -40.0 -4.2 -6.3

intermediates

Esalaticm Rate

(2) A rninimm Of cca!mnicatim betwaen layers is desired. A steeply di@ng be utilized reservoir is .a2s0an advantage because it a21cus gravity for stabilisatim of the displaceren fnmt. t

to

Di.POxmt Fate

+1permnt + 1 ~cmt
+ i percent
+l@F + +1

Fixed Charge et of Co2

mte capital for

TABLE

Cost EstiatiaI Rate

1 WCat
yea

MOBILITY RATlO VS. MSCF C02 /BBL OIL RECOVERED IN A SECONDARY TYPE C02 FLOOD*
wi2ity SAtio, H WCf 022 / =L Oil -red

Nun&r of Years until 032 Recymling~s Mcunt of q Recyc2edwhen q 31wyc2ing CmrOwWes 0 & M cost EKd3aticilsate

+ 1 percent +1
percent

-0.8

-0.7

1.0

2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0 19.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 200.00

3.65 4.17 4.53 4.83 5.05 5.24 5.40 5.55 5J$ 5.79 5.91 6.02 6.12 6.2o 6.28 6.3s 6.42 6.5o 6.57 6.61 7.11 7.46 7.75 8.01 e .22 8.44 8.61 8.78 10.10

TABLE ,-. ie.,.r. ac f PEmtic IwI m=

fiUAN~C IN

6
A~Nll

Al IZED PROF!TS v,, -.. -.. ... r.. .. . . .. ..FOR UNIT CHANGE IN OPERATION AND FINANCIAL

PARAMETERS

FOR FOAM

AND POLYMER

C02 FLOODS

Percentage Chm9e In Annudised Profit

Psr-er Oil Price oil Price -t ion Sate Discdmt Rate Fixed Mange Rate foz Capital
cost

unit man9e

mAmm2

Flmd

mimer

cvz Flood

+1*1 + 1 perent

+ 6.5 + 6.5

+ 6.4 + 6.4

+ 1 perceot
+ 1

+ 2.0 -0.8

+ 1.9 -0.7

perwlt

of C02

+1$/k2P + 1 percant Sate + 1 percent

-33.0 -3.9

-32.0 - 3.8

&Pi .

o,~

is assxO@

to be of

ecmmic

cutoff. See &fendix A for

dez?.ils .

CcQ Cost fadatim

O* MCost Bcd2ation Sate Suzfactmt or PU1Y14H mat

-1.0

-0.9

+ 10 S*1

-0.3

-1.3

TABLE
BASE CASE CONVENTIONAL

3
C02 FLOOD RESULTS

slJrfActmt*or polymer Cmcentratim surfactantor 3u2ymsr adt ~~atim Rate

+1 percent

-1.3

-1.3

+ 1 pemsllt

-0.6

-0.6

S!sm

Yea

Percent Remvered

mrreh ReccNered

H!S2F Znjected

OilL-C@B_&

Final oil nevanue (S)

1 2 3 4 5 6

0 19 7 6 5 4

i 8 1: mtal

3 3 2 2 m

13,313,238 5,054,803 4,323,228 3,456,227 2,947,105 2,346,536 2,224,441 1,%1,022 *

18, 22 18, !22 18, 22 18, 18, ,$ 18, 22 $22 22 !22 22 m

2.80 3.68 4.52 5.39 6.32 73 8.37 9.50 10.69 Tz$

281,871,036 113,165,839. 97,697,779 86,746,275 78,420,299 71 ;Q95;295 66,683,323 62,445,617 m

maums

205

watefform in

sPE1275>

(weaed)AJeAooeH
0 0 .g 0 Q : : 0 m

110
q
r r 0 s 0 N 0 . 0

0 - 0 N

(SW11OCI

NOI1lIM)

J!loJd PeaBW
0 - 0 s-

wmoa

NOI1lIN)

Uwd P-W-V

wow

00

Ada+

SP E12753

FIGURE 3
HCPV CC)2 INJECTED PER YEAR VS. ANNUALIZED PROFIT FOR CONVENTIONAL C02 FLOOD *
50 00 -~

FIGURE 4 NUMBER ANNUALIZED OF YEARS ANALYSIS COVERS VS FLOOD

PROFIT FOR CONVENTIONAL

C02

MAXIMUM PROFIT 100

- 00

90 40OIL RECOVERY g ~ g ~ ~9 og e z k u e u = u -60 *

- 70

ANNUALIZEDPROFIT

p v
a a

0-

/ 1 0-

20

+Base Caaa Analyaia

o

10 I

0.06

0.10

0.16

0.20

0,2s

0.s0

0.96

/&--

I 20

10

15

HCPV C02 Injectad Per

Year

Number Of Yeara Analysla Covers

FIGURE
MOBILITY

5
PROFIT * C02 FLOODS

RATIO VS ANNUALIZED

FOR FOAM AND POLYMER

\\

C02 FLOOD
\

\\

FOAM C02

FLOOD

-# ~se
1
I 1

case
1 I

Analysis \
1 I I 1 1 1 1 1 1

2946670 MQ~!l~y

10

11

12

13

14

16

Ratio

SP E1275~