CHEMICAL EOR FIELD EXPERIENCE Oil Chem Technologies, Inc CHEMICAL EOR FIELD EXPERIENCE Oil Chem Technologies, Inc. Sugar Land, TX USA www.oil-chem.com

PRESENTATION OUTLINE Introduction to Oil Chem EOR – past EOR - Oil Chem Technologies field experience to share EOR - future

PRESENTATION OUTLINE Introduction EOR – past EOR - Oil Chem Technologies field experience to share EOR - future

WHY EOR?

BAVIER; BASIC CONCEPTS OF EOR PROCESSES(1991) Oil Recovery Overview DESCRIBE CHART FULLY. REFER TO REFERENCE HOW MANY IN THE AUDIENCE ARE INVOLVED OR CONSIDERING SOME TYPE OF EOR PROJECT. HOW MANY ARE CONSIDERING CHEMICAL EOR? LET’S LOOK AT THE TYPES OF TERTIARY RECOVERY METHODS BAVIER; BASIC CONCEPTS OF EOR PROCESSES(1991)

WHY CHEMICAL EOR?

ECONOMICS FOR FIELD ASP PROJECTS W. Kiehl Cambridge Daqing Surfactant 0.10% 0.30% Alkali 0.80% 1.25% 1.00% Polymer 1050 ppm 1425 ppm 1200 ppm Tot. Cost $375,000 $2,518,000 $1,009,000 Inc. ASP Oil 275,000 1,143,000 270,000 Cost/bbl $1.46 $2.20 $3.79

ROLE OF SURFACTANTS Reduce interfacial tension Wettability alteration Polymer, CDG, BW, etc. can be used along with surfactants when mobility control is necessary

SURFACE OR INTERFACIAL TENSIONS SYSTEM mN/m Water 72 Pure Hydrocarbons ~ 40 Crude Oil ~ 30 - 40 Crude Oil/Water ~ 3 - 30 Crude Oil/Water/Surfactant < 0.01

RELATIONSHIP BETWEEN CAPILLARY NUMBER AND OIL RECOVERY Nc =  µ / cosθ Nc = Capillary Number  = Darcy Velocity µ = Viscosity = Interfacial Tension Θ=wetting angle

PRESENTATION OUTLINE Introduction EOR – past EOR - Oil Chem Technologies field experience to share EOR - future

LOUDON FLOOD - EXXON 1983 2.3% surfactant 96% of the connate salinity 0.3% pore volume 0.1% Xanthan gum 56 million pounds surfactant was injected in 9 months 68% ROIP

ROBINSON – MARATHON 1983 10% surfactant – petroleum sulfonate 0.8% hexanol as co-surfactant 2.5% salt No polymer 0.1 pore volume 19 –21% ROIP

CHEMICAL EOR -PAST PROBLEMS Technical success but limited “commercial” success - Reasons?

EOR BY CHEMICAL FLOOD Limited commercial success for the past two decades - Reasons? Sensitivity to oil price Limitations of chemicals High surfactant concentration Salinity optimization required Potential emulsion block

However, Extensive lab evaluations and field pilot tests support the feasibility of chemical flooding New chemicals and processes open the door for new opportunities Recent field data using these new chemical and processes proves chemical flooding is an effective way to recover residual oil

PRESENTATION OUTLINE Introduction EOR – past EOR - Oil Chem Technologies field experience to share EOR - future

CURRENT PROJECTS 21 Current projects 20MT to 400 MT Surfactant/mo 400 MT @ 0.1% = 28,000,000 bbl/mo injection California 50,000 MT surfactant/yr @ 0.2% =155,000,000 bbl/yr Build plant onsite

CHINA EOR PROJECTS Low perm formation oil recovery Heavy crude recovery Low perm formation oil recovery High temp. / high salinities Effective, economical offshore EOR

INJECTED, ON-GOING & APPROVED PROJECTS CHINA EOR PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS SS B2080, SS B5050, SS B1688, ORS-46L, ORS-97HF, ORS-41HF

1992-94: LAB EVALUATION Including: ORS-41 Petroleum Sulfonates Over 100 Surfactants Were Tested Including: ORS-41 Petroleum Sulfonates Carboxylates Lignin Sulfonate/Petroleum Sulfonates Microbiological

1995 - INITIAL FIELD EVALUATION Daqing No.4 Field - Oil Chem Technologies’ ORS-41 Daqing No.1 Field – another US company’s Petroleum Sulfonate

1996-1998: ENLARGED FIELD EVALUATION ORS-41 was the ONLY surfactant chosen for enlarged field evaluation. More than 7000 MT of the ORS-41 was injected in several field blocks and this confirmed the viability of the ASP process SPE 36748, 57288, 71061, 71491, 71492

DAQING CENTRAL WELL SPE 57288

DAQING CENTRAL FIELD SPE 84896

HEAVY OIL RECOVERY BY CREATING WATER EXTERNAL PSEUDO-EMULSION

HEAVY OIL PSEUDO-EMULSION Control 0.1% SF-100 Surfactant

HEAVY OIL PSEUDO-EMULSION 0.1% SF-100 Surfactant Control

HEAVY OIL PSEUDO-EMULSION 0.1% SF-100 Surfactant Control Oil Viscosity < 200 cps Oil Viscosity = 6,700 cps

LAB CORE FLOOD DATA Oil Recovery, % Water flood Injection Volume, PV

LOW PERM INJECTIVITY ENHANCER Permeability: 0.1 – 10 md High water injection pressure makes water flood unfeasible FI series surfactants reduced injection pressure, increased injectivity Effectively increased the injectivity in several fields in China and USA

CANADA EOR PROJECTS HEAVY CRUDE TAR SAND LOWER RESERVOIR TEMPERATURES FRESH WATER SOURCES HIGH SALINITY RESERVOIRS FRACTURED CARBONATE FORMATIONS

CANADA EOR PROJECTS SS B2080, SS B5050, SS B1688, INJECTED, ON-GOING & APPROVED PROJECTS SS B2080, SS B5050, SS B1688, ORS-46L, ORS-97HF, ORS-41HF Some field results will be published upon completion of projects

NORTHERN CANADA SP PROJECT Heavy oil field, API = 12 -13 Under polymer flood Added 0.1% surfactant with polymer in November, 2006 ~ 3 months later, the water cut reduced from 97% to 58%

UNITED STATES EOR PROJECTS FRESH WATER SOURCES HIGH SALINITY RESERVOIRS FRACTURED CARBONATE FORMATIONS LOW PERMEABILITY

UNITED STATES EOR PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS ORS-41HF (2), ORS-62, ORS-97, ORS-46HF, ORS-162, SS-7593, SS B1688(2)

SHO-VEL-TUM FIELD On production > 40 yrs, extensive water flood, produced 4 bbl/day ASP started on 2/98, using Na2CO3 and ORS-62 Total incremental oil > 10,444 bbl (22 bbls/day) in 1.3 years SPE 84904

OIL SATURATION AFTER ASP INJECTION SPE 84904

MELLOTT RANCH WYOMING ASP PROJECT 0.1% ORS-46HF, 1% NaOH, 1300 PPM polymer Recovered 989,000 bbl or 16.4 % OOIP between 2003 and 2005 Injection volume decreased 2,800,000 bbl due decreased water cut

MELLOTT RANCH ASP PROJECT - ORS-46HF WATER FLOOD SINCE 1966

BIG SINKING, KENTUCKY Project Information Crude oil : 100 Million bbl Bottom Hole Temperature: 30oC Depth: 1150 ft Thickness: 25 feet (7.32 meter) Permeability: 45 mD SPE 100004

BIG SINKING, KENTUCKY Chemical injected: Problems overcome: 0.8% NaOH + 0.1% ORS-162HF Problems overcome: IFT lowered from 23.6 to 0.001 mN/m Poor water injectivity High water cuts 220% increase in injectivity Large field trial scheduled to begin in 12/2007 SPE 89384

BIG SINKING, KENTUCKY SPE 89384

TANNER FIELD, WYOMING Project Information Crude oil : 21o API Bottom Hole Temperature: 175oF Depth: 8915 ft Thickness: 25 ft Porosity: 20% Permeability: 200 mD SPE 100004

TANNER, WYOMING SPE 100004

SOUTHEAST ASIA PROJECTS HEAVY CRUDE HIGH TEMPERATURES ENVIRONMENT CONCERNS FRESH WATER SOURCE

SOUTHEAST ASIA PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS SS 6-72LV, SS 8020

OFFSHORE ALKALINE SURFACTANT (AS) PROJECT SEA WATER IS SOFTENED ON THE PLATFORM SINGLE WELL TEST SUCCESSFULLY PERFORMED USING SS 6-72LV INJECTED WITH NAOH PILOT PROJECT WILL PROCEED

SOUTH AMERICA PROJECTS VARIOUS RESERVOIR CONDITIONS MANY EOR CANDIDATE FIELDS – OFFSHORE & INLAND ASPHALTENE REMOVAL / WELLBORE DAMAGE REMOVAL IMPROVED GAS RECOVERY/REDUCED WATER CUT

SOUTH AMERICA PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS ORS-57HF, ORS-41HF (2), SS-6046, SS GI-1416, SS B1688

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PRESENTATION OUTLINE Introduction EOR – past EOR - Oil Chem Technologies field experience to share EOR - future

EOR BY CHEMICAL FLOOD High oil prices Energy demand The future is bright – Reasons? High oil prices Energy demand Diminishing reserves Past experience New technologies

CHEMICAL EOR - THE FUTURE New processes use less surfactant (up to 10 times less) Extensive lab evaluations support the feasibility of chemical flooding Field data proves chemical flooding is an effective way to recover residual oil Cost of chemicals have not increased in proportion to price of crude oil

COST OF CHEMICALS 1980 2006 Polymer1 $3-4/lb $1/lb Surfactant2 Alkali3 $0.12/lb $0.20-.040/lb Crude Oil $12/bbl $50-70/bbl Incr. Cost/bbl $8-15 $0.50-$5 1 Some processes eliminate need for polymer 2 Surfactant concentration has been reduced by 10 3 Alkali has been reduced by 50% or in some cases is not needed at all

PROCESS CHOICES Surfactant Surfactant Polymer Alkaline Surfactant Alkaline Surfactant Polymer Smart Surfactant Pseudo-emulsion Chemical/Mechanical

SCALING UP

ENLARGED FIELD CHEMICAL FLOOD Raw Material Supply Source (local or import) Availability (quantity, quality) Alternative suppliers Storage Manufacturing Location Foreign, domestic, on-site Shipping, tax, etc. Storage and distribution Flexibility

ENLARGED FIELD CHEMICAL FLOOD Capital Investment Up-front investment Operational cost By-products

CHEMICAL EOR OPPORTUNITIES Conventional Oil Recover Factor <33% Oil reserves & reservoir characteristics have already been confirmed Improved processes and chemicals are available Better scaling and modeling has been developed

CHEMICAL EOR OPPORTUNITIES Two trillion bbl of oil remain in depleted or abandoned wells Chemical floods offer the only chance in many depleted & water flooded reservoirs Chemical EOR must be re-evaluated based on current technical & economic conditions Minimal or no remediation is necessary, minimizing environmental constraints Trained personnel are available locally

SURFACTANT EVALUATION COMPLIMENTARY SURFACTANT EVALUATION SS-7593 Total Bill = $ 0.00 To: Oil Chem Technologies

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