A new spring for EOR in Norway? Erik Søndenå Petoro Team Leader Technology

A new spring for EOR in Norway? Erik Søndenå Petoro Team Leader Technology

Agenda High average recovery factor in NCS, 46% Water-based EOR can reduce mobile and immobile oil From pilots to field implementation Challenges Possibilities

High recovery factor in Norwegian Continental Shelf 50 Average expected recovery (%) 45 40 Slow development the last 10 years 35 30 1992 1998 2004 2010 Distribution of oil-in-place volumes Immobile oil 25 % Remaining mobile oil 29 % Produced 31.12.2010 37 % Remaining reserves 9 % Close to 15 billion bbls of immobile and 17 billion bbls of mobile oil remains in some 40 producing fields

More wells and EOR the main drivers to achieve the reserves ambition for oil Split of reserves ambition 2020 Utbygging 17 % Driftsprosjekt 5 % Annet 5 % Reservoarprosjekt 26 % Strategic project 2008-2009 Advanced water injection Brønner 52 % Strategic project 2010-2011 Strategy for more wells Kilde: RNB2010 4

EOR Water based methods (Modified from BP) Mobilisation of residual / remaining oil in flooded zones Low salinity water injection (LSWI) Surfactants / PASF Target oil in poorly swept areas Polymers Polymer-Gel for flow diversion: Bright Water TM Link Polymer Solution (LPS) Na-silicate Petoro has focused on LSWI and Bright Water TM

Norwegian authorities require that no environmentally harmful produced water be discharged to the sea Discharge of chemical additives reduced by 99% on the NCS over the past 10 years Tons Chemicals considered: Silicate is not harmful Bright Water is expected to remain in the reservoir Injection of Polyacrylamid and LPS will most likely reach the producers Injection of polymer requires reinjection of water with high regularity

EOR pilots are being tested on NCS Field Pilot Decision date Comment A Two-well water diversion DG4 Q2 2011 Started B Silicate well injectivity DG4 Q2 2010 Yard test successful C LSWI one-well SWCTT DG4 2010 Successful C Two-well Bright Water TM DG4 Q2 2012 C LPS well injectivity test DG4 2010 Successful Two successful injectivity tests in 2010/11 Two two-well test will be started in 2011/12.

Several field on Norwegian Continental Shelf are planning full field implementation of EOR with project sanction 2014/15 Field A: Chemical water injection Project sanction Fall 2011 Fall 2009 2014 2014 Field C: Chemical Water diversion Field F: Chemical Water Shutoff Field E: Surfactant flooding Field B: In-depth water diversion Field C: Link Polymer Solution LPS Field C: Low Salinity Water Injection Field D: Polymer assisted water flooding RC 7 RC 5 2014 2018 2015 2015 2015 2015 2013 2015 2018 2014 2013 Stopped 2013 0 5 10 15 20 25 30 35 40 45 Oil mill bbl o.e Well operations and prioritization of production may lead to delay in pilot execution resulting in later project sanction

Qualitative status of water-based EOR methods offshore Method Potential Inj. volume Maturity of method Complexity Cost HSE (% STOOIP) (fraction of PV) Mechanism Modelling Operational Subsurface process Operations LSWI 2-8 0,5* Surfactants 3-12 >0,5 Polymer flood 2-8 >0,5 Bright Water TM 2-8 <0,1** LPS 2-10 0,5-1,0 Na-silicate 2-8 <0,2 (* reported by BP. ** pore volume of thief zone) Red is a challenge, not an insuperable obstruction! EOR potential ranges from 2 to 12 percent of STOOIP Challenges with surfactants and polymers are high injection volumes and costs Only LSWI and Na-Silicate do not have HSE objections Combination of several methods will increase the potential

Challenges EOR offshore long distance between wells with related long times between injection and increased production need for reliable prognoses based on poorly history matched models and immature simulation techniques requests for highest possible production conflict with drilling wells dedicated to prove new EOR techniques need to see EOR based changes in drainage strategy together with a well strategy The main challenge for EOR offshore is the decision maker willingness to take risk

Water-based EOR methods has a large potential A field pilot should not only be a demonstration project It is also a method for actively reducing uncertainty in the full-field project A decision on an IOR pilot before full-field implementation should be seen in the context of other similar decisions under uncertainty Identifying the value of the information and the probability that information from the pilot will change the decision Reducing the time taken from idea to full-field implementation has a significant impact on NPV Field implementation of EOR implies changes to the drainage and drilling strategy, with new placement of injectors and producers