New Study: Offshore EOR Crucial to Sustaining Future Oil Supply
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TULSA, Okla., May 5 /PRNewswire/ -- A major campaign of enhanced oil recovery (EOR) in offshore fields will be crucial for sustaining the world's future oil supply, according to renowned petroleum consultant Dr. Rafael Sandrea. (Logo: http://www.newscom.com/cgi-bin/prnh/20080505/LAM083ALOGO-a http://www.newscom.com/cgi-bin/prnh/20080505/LAM083ALOGO-b) Offshore fields have been the main source of growth for world oil production in recent years, as onshore oil output has been essentially flat during the last two decades, he noted. But less than a fourth of the world's ultimate recoverable oil reserves in offshore fields has been produced to date. That opens the door for a big EOR push to extract the remaining technically recoverable oil offshore. Sandrea also contends that EOR is a more cost-effective way to add reserves than is exploration or acquisition. Sandrea, president of Tulsa, Okla.-based IPC Petroleum Consultants Inc., is the author of a groundbreaking, provocative new multiclient study to be published in May by the Oil & Gas Journal Research Center. The OGJ Research Center is an arm of PennEnergy.com (http://www.pennenergy.com), the new energy portal developed by PennWell Corporation, publisher of Oil & Gas Journal, Offshore, Oil & Gas Financial Journal, and Oil, Gas & Petrochem Equipment. In his multiclient study, Future Oil & Gas Supply: A Quantitative Analysis, Dr. Sandrea employs a unique, proprietary methodology to provide a holistic assessment of the global oil and natural gas resource base, with the view to evaluate its potential production capacity over the medium and long term. He employs a novel approach that has long informed his exclusive services as an advisor to governments and intergovernmental bodies and as a consultant to major oil companies and the world's leading investment bankers and other financial institutions on matters of risk analysis for international upstream petroleum investments and appraisal of global oil and gas reserves and resources. Sandrea most recently delivered a presentation based on his multiclient study as a plenary speaker at the 16th Improved Oil Recovery Symposium, held in Tulsa during April 19-23 and sponsored by the Society of Petroleum Engineers' (SPE) Mid-Continent Section and the US Department of Energy. Dr. Sandrea will deliver a presentation on his study's conclusions at a press conference scheduled for 10:00 a.m. CDT, May 7, at SPE's 2008 Offshore Technology Conference (OTC) in Houston, Tex. OTC, the world's largest annual gathering of petroleum industry professionals, is being held May 5-8 at the Reliant Center in Houston. Offshore oil role The global offshore oil and gas sector's production performance the past two decades has been "remarkable," noted Sandrea, adding that offshore fields now account for about a third of world oil and gas production, expressed in oil-equivalent terms. But offshore's potential is even greater, he said, given the vast remaining discovered resources. "Globally, a total of 500 billion barrels [bbl] of offshore oil has been discovered, of which 200 billion bbl has already been produced," Sandrea said. "The ultimate recoverable reserves for the global offshore could be near 850 billion bbl." Offshore oil production will continue to grow strongly in the medium term and is expected to reach 35 million barrels per day (b/d) by 2015, up from 24 million b/d in 2005, he estimated. The disparity in discovered vs. produced reserves is even greater for offshore natural gas, Sandrea said: "In regard to offshore natural gas reserves, more has been discovered (580 billion bbl of oil equivalent) than oil, and barely one-sixth has been produced." EOR potential Dr. Sandrea estimates in his study that the total volume of discovered, conventional original-oil-in-place (OOIP) resource worldwide is nearly 11 trillion bbl; this number excludes the vast heavy oil and oil sands regions of Venezuela and Canada. Today the average worldwide recovery factor in oil fields is only 22 percent of OOIP. He contends that an effort to increase that recovery factor by a single percentage point would add more than 100 billion bbl of oil to the world's reserves -- enough to replace almost four years of global oil production. In fact, Sandrea asserted, " ... 70 percent is a tenable level of recovery." "EOR is indispensable to extract this massive volume of oil left underground -- almost 80 percent -- while extending the economic life of the abundant mature oil fields," Sandrea said in his study. "However, at the present time, barely 3 percent of the world's oil production comes from EOR." Increasing oil field recovery rates by a single percentage point would yield ten times as much added reserves as new discoveries and extensions, he pointed out. And the economics favor EOR today, especially at a time when oil prices are at stratospheric levels -- as are oil and gas companies' operating costs. Sandrea estimates that EOR could add reserves at a capital expenditure of $2- 4/bbl, compared with about $4-6/bbl for deepwater development, almost $13/bbl for acquisitions, and more than $14/bbl for overall global finding and development costs. He estimated that industry would need to spend $200-400 billion to improve the world's average recovery rate by a single percentage point to recover that incremental 100 billion bbl. That compares with industry's current global E&D spending of $260 billion/year. While deepwater and ultradeepwater exploration and development has garnered headlines with spectacular successes, Sandrea's study pointed to geological evidence that, to date, suggests the deep water is a play with limited prospectivity within a global offshore context. Given the minimal application of EOR offshore today, that suggests EOR could ultimately make a greater -- and more cost-effective -- contribution to future offshore oil production than the deepwater plays, Sandrea concluded. Dr. Sandrea will be available for questions following his briefing at the May 7 OTC press conference, to be held in the press conference room, which is located next to the OTC press room in Room D1 of Reliant Center. He will also be available in person at the PennWell booth to discuss his study, No. 2941, from 9:30 a.m. to 12 noon on May 5-6. The Oil & Gas Journal Research Center multiclient study Future Oil & Gas Supply: A Quantitative Analysis can be ordered online at http://ogjresearch.stores.yahoo.net/ogjexrep.html. For interviews with Dr. Sandrea or for copies of the Executive Summary and Table of Contents for the multiclient study Future Oil & Gas Supply: A Quantitative Analysis, please contact Bob Williams, Director of Research, Oil & Gas Journal Research Center, at email@example.com or 918-831-9535. About PennWell PennWell Corporation is a diversified business-to-business media and information company that provides quality content and integrated marketing solutions for the following industries: Oil and gas, electric power, water and wastewater, renewable energy, electronics, semiconductor, contamination control, optoelectronics, fiberoptics, enterprise storage, converting, nanotechnology, fire, emergency services and dental. Founded in 1910, PennWell publishes over 75 print and online magazines and newsletters, conducts 60 conferences and exhibitions on six continents, and has an extensive offering of books, maps, web sites, research and database services. In addition to PennWell's headquarters in Tulsa, Oklahoma, the Company has major offices in Nashua, New Hampshire; Houston, Texas; London, England; Mountain View, California; Fairlawn, New Jersey, Moscow, Russia, and Hong Kong, China. Contact: Bob Williams, Director of Research, Oil & Gas Journal Research Center firstname.lastname@example.org or 918-831-9535. SOURCE PennWell Corporation Bob Williams, Director of Research of Oil & Gas Journal Research Center, +1-918-831-9535, email@example.com, for PennWell Corporation