Enhanced Oil Recovery With CO2 Sequestration: A Feasibility Study of A Brazilian Mature Oil Field

Abstract

This paper was presented as part of a student paper session at the conference.It was included in the proceedings as STUDENT20. Abstract This paper investigates the economic feasibility of extending the production life of a small mature oilfield using EOR coupled with CO2 sequestration. We describe the physical aspects of this project, as well as, present a breakdown cost methodology in order to estimate the main financial determinants of the integrated EOR with CO2 sequestration, that is, the cost of capture, compression, transportation and storage. A cash flow and risk analysis is carried out whose main result is a NPV of US$ 3.2 million. A sensitivity analysis shows that project NPV is most sensitive to oil price, oil production and CAPEX. In addition, an environmental benefit of storing 0.73 million tonnes of CO2 over 20 years is achieved. 1 - Introduction Carbon Dioxide (CO2), as well as other gases, is launched into the atmosphere by anthropogenic activities. This has intensively been happening since the Industrial Revolution, due to the increasing burning of fossil fuels (coal, oil and natural gas) and decontrolled deforestation. In the pre-industrial era its concentration was about 280 ppm and today it reaches 370 ppm. Besides, CO2 concentration increases at a rate of 0.4% per year since 1980's1.Studies from the IPCC (Intergovernmental Panel on Climate Change) show that if such emissions continue to occur, the Earth's average temperature may increase from 1.5 up to 4.5ºC over the next one hundred years and give rise to droughts aggravation, rains, and the ocean level raising may be in the ranging of60cm up to 1.5m[1]. Under this pessimistic future scenario, governmental authorities together with other non-governmental organizations have discussed the implementation of some approaches to minimize or even stop the build-up of this greenhouse gas in the atmosphere. Currently, in our viewpoint, there are three main ways to reduce the CO2 concentration in the Earth's atmosphere:To promote energy efficiency in order to produce less CO2 per unit of energy service (industrial, transportation, and residential sectors);Decarbonization of energy - development of technologies related to renewable sources or alternative energy;Carbon Sequestration. The first two approaches are cheaper, but limited at the present time. Then, we concentrate efforts on the third approach, that is, carbon sequestration. The motivation for its choice has advantages such as:It can enable society to keep on using fossil fuels while it reduces the CO2 concentration in the atmosphere,It can mitigate the effects of climate change, since CO2 concentration rate tends to diminish;It can allow more time for a less traumatic route for the energy matrix substitution. Apart from these advantages, at this time, a barrier for the implementation of CO2 sequestration policy is the high cost of the whole process, that is, capture, compression, transportation and injection. As cited by Herzog[2], under a pure financial short-term view, it will always be more expensive to sequester CO2 than to just emit it to the atmosphere. Nowadays, CO2 sequestration with current technologies is not economically feasible. More R & D is needed to reduce high costs (mainly of capture), as well as, the incentive mechanisms such as Kyoto Protocol will create more opportunities for cost reduction in this sense. If the carbon credits are considered, the costs of CO2 sequestration will be offset, so that the sequestration may become attractive.