Decision Analysis and CO2-Enhanced Oil Recovery Development Strategies

This paper analyzes the relationship between actual reservoir conditions and predicted measures of performance of carbon dioxide enhanced oil recovery (CO2-EOR) programs. It then shows how CO2-EOR operators might maximize the value of their projects by approaching implementation using a "flexible selective" pattern development strategy, where the CO2-EOR program patterns are selectively developed based on site-specific reservoir properties. It also analyzes performance measures and economic consequences of utilizing a continuous CO2 injection strategy intended to maximize CO2 retention for a defined time period. "Net CO2 utilization," calculated as difference between the volumes of CO2 injected and CO2 recovered in the production stream divided by the oil produced, is a standard measure of CO2-EOR carbon utilization, but it can be a misleading predictor of the actual CO2 retained in the reservoir. Asset value can be added to a CO2-EOR project by recognizing effects of variations in reservoir parameter values and basing incremental development decisions on those data. For policy analysts, the consequences of ignoring geologic variability within a reservoir that is a candidate for CO2-EOR will likely be to substantially overestimate predicted adoption of CO2-EOR in response to economic incentives. This result holds true whether the CO2-EOR program objective is to maximize net value by maximizing oil production or maximize CO2 storage with oil recovery.