Advances in Carbon Dioxide Enhanced Oil Recovery, the Concept of Residual Oil Zones and Opportunities for

Flood Target Expansions

The Interstate Oil & Gas Compact Commission Annual Meeting

Hilton Tucson - El Conquistador HotelTucson, Arizona

November 14–15, 2010

L. Stephen Melzer

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Many Thanks Go to:

• The Oil Majors and Their Developmental Work on CO2 EOR• King Hubbert – circa 1950’s• The UTPB CO2 ‘Team’ in Midland/Odessa• The Research Partnership to Secure Energy for America (RPSEA)• The U.S. DOE and Advanced Resources, International

As you Shall See; Much Work Remains to be Done so….Future ‘Thanks’ Likely to Go to:

• RPSEA • USDOE• Cooperating Industry Partners• IOGCC (as the policies get worked out)• EORI & PCOR……

I probably need to apologize up front as I’m going to need to get a bit “Geeky” here

Advances in Carbon Dioxide Enhanced Oil Recovery, the Concept of Residual Oil Zones and

Opportunities for Flood Target Expansions

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But First…………..

Geologisthis

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Advances in Carbon Dioxide Enhanced Oil Recovery, the Concept of Residual Oil Zones and

Opportunities for Flood Target Expansions

• Where CO2 EOR has Been• Where it is Now• Where it Should be Going

– Some Organizational Forecasts– Expansion of Targets from Traditional Ones– Convergence with Carbon Capture and

Storage?

6CONVENTIONAL CO2 EOR RESERVOIR EXPLOITATION

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Growth of CO2 EOR: U.S. & Worldwide*

WW & U.S. CO2 EOR PRODUCTION1986 - 2010

0

50

100

150

200

250

300

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

YEAR

CO

2 EO

R P

RO

DU

CTI

ON

- kb

opd

ALL OF U.S. Worldwide

* Ref: O&GJ Biennial EOR Editions & UTPB Petr Industry Alliance

Where We Are Today

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Current Status (U.S. CO2 EOR)*

• Active Projects 106• Acres Under Flood 450,000• Number of Producing Wells 9,980• Number of Injection Wells 6,850• Total Production 340,000• EOR Production 262,000

* Ref: O&GJ Biennial EOR Edition & UTPB PIA Industry Alliance – Mar ‘10

5.6% U.S. Production

Where We Could be Going

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The BaselinePerm Basin & U.S. CO2 EOR History

0

50

100

150

200

250

30019

72

1976

1980

1984

1988

1992

1996

2000

2004

2008

2012

Year

Ann

ual C

O2

EOR

Oil

in k

bopd

PB CO2 EOR OIL (KBOPD)

U.S. CO2 EOR OIL (KBOPD)

Supply Limited ‘Decline’

12Nat’l Resource Defense Council’s Look at EOR Growth

• An Aggressive Capture Plan, Time frame of 2010 – 2030, Uses a 5-year ramp up of Oil Production from Available CO2 Volumes, Termination of CO2 Volumes is a function of Time Frame of Study

Figure B: CO2 Captured EOR Vols and CO2 EOR Production (thru 2055)

0

100

200

300

400

500

600

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

Year

Assu

med

CO

2 Ca

ptur

e V

olum

es(m

mto

nnes

per

yea

r)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

CO2

Capt

ure

Vols

in b

cfpd

and

Oil

Pro

duct

ion

in m

mbo

pd

CCS Power CO2

CCS Power CO2 {Rt Scale}

5-yr Ramp up Method: Oil Rec -(Rt Scale)

Aggressive Capture Case

Ref: http://www.adv-res.com/pdf/v4ARI%20CCS-CO2-EOR%20whitepaper%20FINAL%204-2-10.pdf

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Energy Information Agency (2010)C

O2

EO

R P

rodu

ctio

n in

mm

bopd Adding ‘Pure’ Industrial Sources

Adding Select, Dilute (Power Plant) Industrial Sources

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RESIDUAL OIL ZONESA GAME CHANGER?

WHERE ARE THEY AND HOW FORMED?Origins of Residual Oil Zones and Identification Methodology

• ROZ Origins (…..Sorry if this is Repetitive)

• The Fascinating ROZ Science – State of the Knowledge

• ROZ Types – Examples

• The Anecdotal Evidence

• Screening Methodology

• A Southern Williston Example

• A Wyoming Example

• We’ve Only Just Begun – So Much Work Yet to be Done

A Lot of Folks have Looked at EOR Targets Like we Looked at Waterflood Targets (i.e., Main Pay Zones only)

Let’s Re-examine (Challenge) that Perspective

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Original Oil Accumulation Under Static Aquifer Conditions(A Hypothetical Example)

W E

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Original Accumulation Subject to a Westward Regional Tilt

W EW E

TYPE 1 ROZ

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Original Accumulation with a Breached then Reformed Seal

ORIGINAL POST BREACH

TYPE 2 ROZ

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Change in Hydrodynamic Conditions, Sweep of the Lower Oil Column, Oil/water Contact Tilt, and Development Of The Residual Oil Zone

TYPE 3 ROZ

W E

Let’s Quickly Talk about the Permian Basin Example of ROZs

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Post-Subsidence (Entrapment) Phase* of Permian Basin Development**

* Dated at Late Permian through Cretaceous

** Adapted from Lindsay, R.F. (2001), W. Tx Geological Society Fall Symposium, Oct 01, Midland Tx USA

~50% of Permian Basin Production

WEST EAST

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Extensional Phases and Reduction of Hydrodynamic Gradients in the Permian Basin*

* Ref: Lindsay, R.F. (2001), W. Tx Geological Society Fall Symposium, Oct 01, Midland Tx USA

EAST

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A Curious and Very Quiet Exploitation ‘Thing’ Has Moved Forward in the Permian Basin

MIDDLE SAN ANDRES PALEOGEOGRAPHYwith Location of Active Industry ROZ Zones/CO2 EOR Projects*

Hobbs

VACUUMFIELD

GuadalupeMountains

MidlandBasin

DelawareBasin

CentralBasin

Platform

Shelf Margin “reef”

TexasNew Mexico Midland

San Angelo

Restricted Carbonate Shelf

OpenMarine

MarathonOverthrust Belt

NORTHWESTSHELF

NORTHERNSHELF

EASTERNSHELF

WASSON FIELD (DENVER & BENNETT RANCH UNITS

SEMINOLE FIELD

* Adapted from Sagnak (2006), Chevron Presentation at the 12/06 CO2 Flooding Conference

GOLDSMITH FIELD

HANFORD FIELD

There are 9 total ROZ projects now

with two more scheduled for

start by early ‘11

Rumor has it there is a Chemical EOR ROZ pilot underway and

another one in design

(Anecdoctal) Evidence of ROZs

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OIL SHOWS WITHOUT PRIMARY (OR SECONDARY) PRODUCTION

• Residual Oil in Cuttings• Utility of Mud logs• Drill Stem Tests

UV LIGHT

WHITE LIGHT

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OWC Tilts(Type 3 ROZs)

Another “Anecdote”

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Distribution of San Andres Tilted Oil-Water Contacts in the Northern Shelf and Central Basin Platform Areas of the Permian Basin*

And Yet……Other ‘Anecdotal’ Evidence

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DOLOMITIZATION(PDIs)

• Magnesium Rich Flush Waters• Porosity/Perm Enhancements• Pervasive Zonations• Geological Timing (Late Stage,

Biogenic)• Anhydrite Conversion

Another “Anecdote”

Northern Central Basin Platform Area

T/Glorieta

DST 486’ Sulfur H2O

5000’

5500’

6000’

6500’

First Currings Sample Shows = 5330’

PDI*

Base of Cuttings ‘Strong” Flour = 5620’

ROZ

Gamma Ray Neutron Log

* Pervasively Dolomitized Interval

Another Very Important Sidebar

‘Brownfields’ and ‘Greenfields’

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LET’S INTRODUCE SOME TERMINOLOGY

IT’S TIME TO TALK ABOUT SWEEP IN TERMS OF

BROWNFIELDS* AND GREENFIELDS

TYPE 3 ROZ

Greenfield = Effectively no Main Pay Zone

* Residual Oil Zone Beneath a Main Pay Zone

Let’s Look “Outside”

Ho Hum…..I live and work in the Rockies so what do I care about

the Permian Basin?

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A Key Common Element to the Three Types of ROZs

A) A Subsidence and Oil Entrapment Stage

B) Followed by one or more Tectonic Stages wherein Basin was Altered

1) Basinal Tilting (Type 1),2) Faulted, like in Renewed Deep Seated

Lineament Displacement, or3) Nearby Uplift and Change in Hydrodynamics

(Type 3)

WILLISTON BASINROZ METHODOLOGY

Note: Thanks to the PCOR Partnership for their Advice and Guidance to get this started

SOUTHERN WILLISTON BASIN

ROZ PLAYS?

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Williston BasinStratigraphic

Column

Ordovician: Red River Formation

Mississippian: Mission Canyon Formation

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Another Journey Down the ROZ Methodology ‘Highway,’

Let’s Quickly Look at a Wyoming Example*

Note: Thanks to the EORI for Help on this

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Wyoming (Big Horn Basin)

Stratigraphic Column

Pennsylvanian: TensleepFormation

Permian: PhosphoriaFormation

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Summary (1)

• With the New Oil Pricing Regime, EOR Targets Need to be Visited again

• EOR Opens up the Scope of Reservoir Targets to Residual Oil Zones – we have got to quit thinking EOR is limited to MPZs (think Brownfields and Greenfields)

• Lots of Understanding is Needed for these ROZs, Geologists will be key in developing both the Basinal and Project Descriptions

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Summary (Cont’d)

• There are Processes at Work in the ROZsthat are not at Work in the MPZs– e.g., microbial, sulfur conversion

• Many of the Processes at Work in the ROZshave affected the MPZs– e.g., H2S generation

• The Advancement of Understanding ROZs is Clearly Multi-disciplinary (get the geek back on the horse)

The End

(But before the Questions: a Couple of ‘Mentions’)

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The CO2 Conference Week is Coming!

If this ROZ Work Strikes your Fancy

Check out the Website: www.residualoilzones.com