CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery Prepared For: World Bank CCS Training Session Prepared By: Vello Kuuskraa, President ADVANCED RESOURCES INTERNATIONAL, INC. Arlington, VA Hosted by: World Bank CCS Trust Fund Conducted by: SECARB-Ed World Bank ▪ Washington, DC ▪ September 6, 2011

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Discussion Outline 1.Introduction to CO 2 Enhanced Oil Recovery (CO 2 -EOR) 2.Two Key ARI Reports Prepared for U.S. DOE/NETL: Storing CO 2 and Producing Domestic Crude Oil with “Next Generation” CO 2 -EOR Technology (January, 2009) Improving Domestic Energy Security and Lower CO 2 Emissions with “Next Generation” CO 2 -Enhanced Oil Recovery (June, 2011) 3.Worldwide Assessment of CO 2 -EOR Oil Recovery and CO 2 Storage We would like to acknowledge the valuable support provided by U.S. DOE/NETL for this presentation and its foundation reports.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, What is CO 2 -EOR?

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, LaBarge Gas Plant LaBarge Gas Plant Val Verde Gas Plants Val Verde Gas Plants Enid Fertilizer Plant Jackson Dome Jackson Dome McElmo Dome Sheep Mountain Bravo Dome McElmo Dome Sheep Mountain Bravo Dome Dakota Coal Gasification Plant Dakota Coal Gasification Plant Antrim Gas Plant Antrim Gas Plant  Most CO 2 -EOR activity currently in North America  Currently, 114 projects provide 281,000 B/D in U.S.  Additional projects planned to help increase CO 2 supply to CO 2 -EOR –Natural & anthropogenic –New CO 2 pipelines 1 Source: Advanced Resources International, Inc., based on Oil and Gas Journal, 2010 and other sources. Number of CO 2 -EOR Projects Natural CO 2 Source Industrial CO 2 Source Existing CO 2 Pipeline CO 2 Pipeline Under Development 114 Encore Pipeline Denbury/Green Pipeline U.S. CO 2 -EOR Activity – Oil Fields and CO 2 Sources Lost Cabin Gas Plant

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Growth Of CO 2 -EOR Production in the U.S. Source: Advanced Resources Int’l., based on Oil and Gas Journal, Incremental Oil Recovery (barrels/day) Significant further growth in production constrained by available supplies of CO 2

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 A Major CO 2 Pipeline Exists in the Permian Basin, West Texas Over 3,000 miles of large diameter CO 2 pipelines have been installed and operated in the Permian Basin of West Texas linking natural gas processing plant CO 2 supplies with oil fields. The large volume (30-inch), long distance (502-mile) Cortez Pipeline from McElmo Dome to Denver City was constructed by Shell Oil in the early 1980s. It has a current throughput capacity of 1.3 Bcfd (25 MMmt/yr.)

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Significant Volumes of CO 2 Are Already Being Injected for EOR in U.S. (Year 2011) * Source: Advanced Resources International, 2011 **MMCfd of CO2 can be converted to million metric tons per year by first multiplying by 365 (days per year) and then dividing by 18.9 * 10 3 (Mcf per metric ton) State / Province for EOR / StorageCO 2 Source Type and Location CO 2 Supply (MMcfd/million mt) GeologicAnthropogenic Texas-Utah- New Mexico-Oklahoma Geologic (Colorado-New Mexico) Gas Processing (Texas) 1, Colorado-WyomingGas Processing (Wyoming)-340 MississippiGeologic (Mississippi)1,100- MichiganAmmonia Plant (Michigan)-15 OklahomaFertilizer Plant (Oklahoma)-30 SaskatchewanCoal Gasification (North Dakota)-150 TOTAL (MMcfd)2, TOTAL (million mt)5217

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 Advanced Power Plants Using EOR for Storage Storing CO 2 and Producing Domestic Crude Oil with “Next Generation” CCS and CO 2 -EOR Technology 400 MW IGCC with 90% capture Located near Odessa in Permian Basin Sell 3 million tons of CO 2 per year to EOR market Expected cost $1.75 B; $350 MM award under CCPI Round 3. Summit’s Texas Clean Energy IGCC Project Source: Siemens Energy

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, CO 2 - EOR Activity Outside of U.S. Area (Acres)FormationDepth Oil GravityViscosity Canada Weyburn Unit 9,900LS/Dolo4,660 ’ 28 o 3 cp Joffre 6,625Sand4,900 ’ 42 o 1 cp Trinidad Forest Reserve 500Sand2,000-4,200 ’ o cp Oropouche 175Sand2,400 ’ 29 o 5 cp Turkey Bati Raman 12,890LS4,260 ’ 13 o 590 cp Hydrocarbon miscible and nitrogen EOR projects exist in Canada, Libya, UAE, Mexico and Venezuela that would be favorable and convert to CO 2 -EOR In addition, CO 2 -EOR has been discussed for fields in North Sea and China.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, “Poster Child” for Integrating CO 2 -EOR and CO 2 Storage Regina Weyburn CO 2 Beulah North Dakota Saskatchewan Montana Manitoba Canada USA Source: EnCana, 2005 Largest CO 2 EOR project in Canada: –OOIP 1.4 Bbbls –200 MMB incremental oil from CO 2 -EOR World’s largest geological CO 2 storage project: –2.4 MMt/year (current) –13 MMt to date –30 MMt with EOR –55 MMt with EOR/sequestration (compared to 60 MMt from incremental oil from CO 2 -EOR) A 200 mile CO 2 pipeline connects the Coal Gasification Plant at Beulah, ND with the Weyburn oil field in Canada.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Potential of “Next Generation” CO 2 -EOR Technology Two key reports prepared by Advanced Resources Int’l for U.S. DOE/NETL:

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Large Volumes Of Domestic Oil Remain “Stranded” After Traditional Recovery Operations Original Oil In-Place: 597 B Barrels* “Stranded” Oil In-Place: 393 B Barrels* Proved Reserves 22 Billion Barrels Future Challenge 393 Billion Barrels Cumulative Production 182 Billion Barrels Source: Advanced Resources Int’l. (2009)

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, “Next Generation” CO 2 -EOR Technology Innovative Flood Design and Well Placement. Adding horizontal production wells and vertical CO 2 injection wells, enabling CO 2 to contact residual oil from poorly swept portions of the reservoir. Viscosity and Miscibility Enhancement. Adding mobility control with viscosity enhancers and lowering MMP with miscibility enhancers. Increased Volume of CO 2 Injection. Injecting up to 1.5 HCPV of CO 2 compared to 1.0 HCPV under “best practices”. Flood Performance Diagnostics and Control. Instrumented observation wells and downhole sensors to monitor progress. Periodic 4-D seismic and pressure plus zone-by-zone flow tests (among others) to “manage and control” the CO 2 flood.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 CO 2 Injection CO 2 Injection CO 2 Source Oil to Market Production Well CO 2 Recycled CO 2 Recycled Current Water Oil Contact Original Water Oil Contact Original Water Oil Contact Stage #1 Stage #2 Stage #3 TZ/ROZ Unswept Area Oil Bank Swept Area Saline Reservoir Integrating CO 2 -EOR and CO 2 Storage Could Increase Storage Potential

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 Oil Recovery Performance From Permian Basin San Andres Formation

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 *$100/Bbl Marker Price Source: Occidental Petroleum Corporation, May 2011 Updated Typical Permian Basin CO 2 -EOR Project Cost Structure (Occidental Petroleum)

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 Domestic Oil Supplies and CO 2 Demand (Storage) Volumes from “Next Generation” CO 2 -EOR Technology Billion Barrels of Recoverable Oil Potential Oil Recovery CO 2 Demand** Source: Advanced Resources Int’l (2011). *At an oil price of $85/B, a CO 2 market price of $40/mt and a 20% ROR, before tax. **Includes 2,300 million metric tons of CO 2 provided from natural sources and 2.6 billion barrels already produced or being developed with miscible CO 2 -EOR. Billion Tons of CO 2 Storage TechnicalEconomic* TechnicalEconomic*

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 Volumes of Anthropogenic CO 2 Storage Capacity Available from “Next Generation” CO 2 -EOR Technology Number of 1 GW Size Coal-Fired Power Plants* Technical Demand/Storage Capacity Economic Demand/Storage Capacity** *Assuming 7 MMmt/yr of CO 2 emissions, 90% capture and 30 years of operations per 1 GW of generating capacity. **At an oil price of $85/B, a CO 2 market price of $40/mt and a 20% ROR, before. Source: Advanced Resources Int’l (2011). Total CO 2 Anthropogenic CO 2 Total CO 2 Anthropogenic CO

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Worldwide Potential for Using CO 2 -EOR to Store CO 2 and Recover Additional Oil Advanced Resources prepared for the International Energy Agency Greenhouse Gas Programme (IEA GHG) an assessment of CO 2 storage and oil recovery potential offered by CO 2 -EOR. CO 2 supplies are primarily from new CO 2 emissions capture facilities with pipeline transportation from power plants, cement plants and refineries to geologically favorable oil fields.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, World Potential from CO 2 Enhanced Oil Recovery Region Name Basin Count Asia Pacific8 Central and South America7 Europe2 Former Soviet Union6 Middle East and North Africa11 North America/Other3 North America/United States14 South Asia1 S. Africa/Antarctica2 Total54 Assessed 54 large world oil basins, including 14 in the U.S., for CO 2 -based Enhanced Oil Recovery. High level, 1 st order assessment of CO 2 - EOR and associated storage potential, using U.S. experience as analog. Tested basin-level estimates with detailed modeling of 47 large oil fields in 6 basins.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, CO 2 Storage Potential with CO 2 -EOR (Including Reserves Growth) Region Number of Fields CO 2 -EOR Potential (Billion Barrels) CO 2 Storage Potential (billion tonnes) 1. Asia Pacific C. & S. America Europe FSU Middle East/N. Africa N. America/Non U.S United States South Asia S. Africa/Antarctica Subtotal Add ’ l w/ Res. Growth TOTAL8811,072318

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Large Oil Fields with CO 2 -EOR Potential Near Jordan Text

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Proximate to Jordan Oil Fields Potentially Favorable for Miscible CO 2 -EOR

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Existing Regulatory Framework for CO 2 -EOR in the U.S. The U.S. and other countries have experience in regulating the transport and injection of CO 2 used for CO 2 -EOR These address most – but not all – of the issues that will need to be addressed for CCS Efforts are underway, both in the U.S. and abroad, to address existing gaps. In the U.S., these include: –Federal EPA Class VI well rulemaking for CO 2 injection wells used for storage –Federal EPA Class RR section of the EPA Mandatory GHG Reporting Rule on monitoring and reporting on “emissions” from CO 2 -EOR and CO 2 storage operations –Other efforts are underway at the state level as well in the U.S.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, Conclusions 1.CO 2 -EOR is not a new phenomena Underway > 30 years in favorable fields with access to affordable CO 2 2.Worldwide, CO 2 -EOR has potential to produce up to 1,072 billion barrels 3.And store up to 318 billion metric tons of CO 2 Equivalent to the emissions of 1,680 one-GW size coal- fired power plants for 30 years of operation* 4.Numerous options and actions could further increase oil recovery and CO 2 storage capacity – but depend on the availability of reliable, affordable CO 2 *Assuming 7 MMmt/yr of CO 2 emissions, 90% capture and 30 years of operation per 1 GW of generating capacity.

CO 2 Storage in Depleted Oil Fields: The Worldwide Potential Offered by CO 2 Enhanced Oil Recovery JAF PPTAugust 31, 2011 Advanced Resources International Office Locations Washington, DC 4501 Fairfax Drive, Suite 910 Arlington, VA Phone: (703) Fax: (703) Houston, Texas Westheimer, Suite 520 Houston, TX Phone: (281) Fax: (281)