WHITE PAPER

How to Sustain EOR Value in a

Highly Variable Price Environment
JOSÉ LUIS MOGOLLÓN, RESERVOIR OPTIMIZATION GLOBAL LEADER
 The Key to Sustaining EOR Value in a Highly Variable Price Environment

How to Sustain EOR Value in a

Highly Variable Price Environment
Author
José Luis Mogollón, Reservoir Optimization Global Leader

How can we
INTRODUCTION
Over decades, both academia and the oil industry have thrived in the area of enhanced oil
be assured that
recovery (EOR). Old paradigms have been derogated and new applications have been history won’t
developed. However, in tough economic climates, the oil industry tends to fall back on
remedial productivity tactics that, while possibly providing short-term profitability, may also repeat itself?
lead to impaired, low-energy reservoirs along with losses in medium-term and long-term
production and reserves. This paper postulates solutions to this paradox.
History has taught us the impact on EOR of past low oil price periods: significant reductions in
research and development, early retirements, lost expertise, and suspended projects that are
never revisited. How can we be assured that history won’t repeat itself this time?
Operators are currently implementing three types of strategies: i) continuing to design, pilot,
and plan deployments; ii) further optimizing projects already in place; and iii) halting efforts
“until the wind changes.” However, to go through the current low price period and make
EOR sustainable, the industry is also in urgent need of three major improvements:
1. Reduce risk and cost per incremental barrel
2. Shorten the negative cash flow period during pilot and commercial deployments
3. Adapt and develop methods to expand applicability to harsher conditions
The following sub-sections address what has been done recently and what is currently being
done to achieve such improvements.

REDUCE RISK AND COST PER INCREMENTAL BARREL

Reducing risk is about reducing uncertainties at the planning stage and better controlling
flooding projects. Cost-per-barrel reductions can be achieved by either reducing the overall
operational expenditure (OPEX) or by increasing production.
All actions related to these targets are connected, and sometimes these actions have
opposite effects. In addition, the number of uncertainties (for example, permeability, net pay,
remaining oil saturation distribution, and future oil prices) and decision variables (for example,
the injection rate; slug size; and number, location, and drilling sequence of new injector and
producer wells) is large.

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 The Key to Sustaining EOR Value in a Highly Variable Price Environment

For every decision, there are two or more options to be determined. Therefore, the combination of
decisions and options generates hundreds to thousands of scenarios, raising the key question:
Reducing risk
How can we find the optimum scenario with the lowest possible risk? is about reducing
The planning of a flooding project is of paramount importance. It is the time to make decisions that uncertainties
will affect the whole life cycle of the project. Some decisions are irreversible once implemented.
For a number of reservoirs, how to find the optimum scenario in the early planning stages was
at the planning
described in a 2013 blog by Mogollón and in these papers: MiIlán et al., 2012; Mogollón et stage and
al., 2016; Saputelli et al., 2009; and Tillero et al., 2014. Once the reservoir model is built and
properly history-matched, the traditional deterministic/manual numerical simulation approach better controlling
allows, within a reasonable time frame, for only a few scenarios to be examined on a trial-and- flooding projects.
error basis. The transition from deterministic to a probabilistic/optimized plan is enabled by
stochastic programs that automatically couple the reservoir and the economic models and use
numerical algorithms to optimize the objective business function (for example, net present value
[NPV], internal rate of return [IRR], and cumulative production [Np]). The workflow based on that
experience is shown in Figure 1.

Numerical model review 

and assisted history match

Definition of objective
Surveillance
function, decision
and monitoring
variables, and options

Stochastic runs and

Narrow down options/
uncertainties impact
deterministic run
quantification

Optima scenario
identification with
numerical algorithms

Figure 1 Continuous flooding scenario optimization workflow

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 The Key to Sustaining EOR Value in a Highly Variable Price Environment

We have developed and tested optimizer software and demonstrate that it can identify a
relatively large number of scenarios around the optimum for the objective function, thus
providing unprecedented planning flexibility. Optima scenarios obtained in six case studies
show NPV and Np increments of 30 percent or more with reduced risk compared to the
traditional deterministic approach. Figure 2 shows an example of this optimization for a
sandstone reservoir that is strongly pressure-depleted.

Optima scenarios
obtained in six
Optimization case studies
+30% NPV and Np
show NPV and
Best
Traditional
Np increments
Scenario of 30 percent or
more with reduced
Base
Case
risk compared
to the traditional
deterministic
approach.

Figure 2 Cumulative production (Np) and net present value (NPV) correlations for different scenarios
considered during an optimization run for an actual flooding project in a mature field offshore

Once the most meaningful scenarios are identified, the stochastic analysis (considering all
possible reservoir, production, and oil price uncertainties) provides metrics of economic risk
which are invaluable for making a full field deployment decision.
Following the planning phase, many decisions must be made during execution, and the original
plan may need to be modified depending on how the project evolves. So the next key question
that arises is: How can we ensure flexibility and optimize project evolution?
Flooding digitalization using smart workflows is proving to be of great value and has been described
in a blog by Mogollón and Carvajal (2014) and in papers such as those written by Al-Jasmin et al.,
(2013) and Ranjan et al. (2013). In a Middle Eastern carbonate reservoir, digitalization is helping
engineers to evaluate waterflood scenarios and make better, faster decisions. The results have
been satisfactory: 20 wells have shown better productivity indices than before, production has
increased by 24 percent, and asset team performance has improved significantly. Additionally,
optimization time has reduced by 75 percent, and the time that engineers devote to analysis
and collaboration has doubled. Currently a design to make the digitalization of a field cyclic,
and to continuously steam flood, is being developed.

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 The Key to Sustaining EOR Value in a Highly Variable Price Environment

SHORTEN THE NEGATIVE CASH FLOW PERIOD DURING PILOT AND

COMMERCIAL DEPLOYMENTS
Depending on the type of EOR method employed, along with the oilfield size and complexity, the
journey from screening to full field deployment may take 4 to 12 years (Figure 3). Investments of
up to hundreds of millions in US dollars may be made, with returns achieved only at the very end
of that period.

For a well-known
EOR method and
a well-characterized
reservoir, the risk
of implementation
is low.
Figure 3 Timeline of expenditures for a generic EOR project

Particularly during low oil price periods, most operators are in the “reduce capital expenditure
(CAPEX) and OPEX” mode. However, it is convenient to continue designing and piloting in
order to be prepared to catch the next high oil price wave in full. Accordingly, this sub-section
focuses on how to compress timelines and reduce costs as much as possible in EOR field
pilot tests.
The following pilot objectives are generally recognized by the industry:
»» Ascertain reservoir response in »» Gain operational experience and build
order to weigh and reduce technical/ operator confidence
economic risk »» Book reserves
Determining whether or not a pilot is needed must be assessed on a case-by-case basis
(Teletzke et al., 2008). For a well-known EOR method and a well-characterized reservoir, the risk
of implementation is low. Therefore, conducting a pilot may not be justifiable. It may be even
harder to justify a large-scale pilot because skipping it would save years of time and tens or
hundreds of millions of dollars, substantially improving the project’s NPV.
When it is determined that a field pilot has to be conducted, the following best practices should
be followed to minimize time and costs:
»» Ascertain the correct geometry and »» Avoid multistage pilots
dimension of the well pattern »» Conduct single-well and inter-well tracer
»» Conduct as many activities in parallel tests in advance
as possible

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 The Key to Sustaining EOR Value in a Highly Variable Price Environment

It is important not to confuse EOR piloting with filling in the gaps of unaccomplished reservoir
characterization. In most cases, EOR is deployed in mature fields, and that information should
Resolve
be available. economic risk
Integrated oil services companies, such as Halliburton, play the very important role of implementing before further
and combining lessons learned with best practices. Knowledge gathered in pilot projects around
the world is used in the next application. investing.
The Halliburton five-phased process shown in Figure 4 goes through initial planning, laboratory
analysis, reservoir modeling, and optimized subsurface and surface design before construction
and execution. These phases enable tailored solutions at any stage of the project. Key features
of our approach are the use of world-class laboratories, smart algorithms, and the stochastic
techniques described in the “Reduce risk and cost per incremental barrel” sub-section. This
approach resolves economic risk assessment hurdles before further investing and aids real-time
monitoring and project control.

Data
Rock-Fluid Reservoir Construction
Assessment, Optimized
Analysis and Modeling and and Execution
EOR Screening, Pilot Design
Core Tests Simulation Control
and Ranking

Figure 4 EOR pilot design and implementation sequence

ADAPT AND DEVELOP METHODS TO EXPAND APPLICABILITY TO HARSHER CONDITIONS

This strategy is a continuous quest with many new developments. One of the biggest
challenges is proving that incremental oil can be produced with relatively low risk and cost
per barrel. Some examples of recent and current developments are presented below.
First, the extension of EOR application criteria is remarkable, as in the case of polymers to
heavy oils and offshore reservoirs. While the maximum oil viscosity was initially believed to
be 150 cp, polymer floodings are currently successful with oil viscosity up to 3,000 cp and
possibly even higher. Three examples of work done in this area are given in the papers by
Manichand et al. (2010); Mogollón and Lokhandwala (2013); and Mogollón et al. (2016).

Summary of how polymer flooding challenges have been tackled in viscous

oil reservoirs (after Mogollón and Lokhandwala, 2013)

Field Challenge Solution

Use of extended-reach
Pelican Lake, Canada Maintain polymer injectivity
horizontal wells

Exploit near-wellbore fractures,

Tambaredjo Field, Suriname Maintain polymer injectivity
inject above parting pressure

Use of hydrophobically
High formation water salinity
associating polymers
Bohai Bay, China
Use of portable and automated
Limited offshore space
surface equipment

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 The Key to Sustaining EOR Value in a Highly Variable Price Environment

There are new paradigms. Waterflooding is suitable for heavy oil reservoirs, as reported in
papers by Beliveau (2008), Millan et al. (2012), and Tillero et al. (2014). Successful waterflooding
Successful
cases have been reported in more than 20 sandstone reservoirs with oil viscosities ranging waterflooding
from 120 to 1,900 cp. Waterflooding a viscous oilfield does require a different operational
mindset than waterflooding a conventional field; however, it may extend the reservoir life
cases have
and increase the recovery factor at a relatively low cost. been reported
New chemical compounds that react in situ are under field trial to improve the EOR fluid
allocation in the reservoir and to solve limitations of thermal recovery due to heat losses
in more than
in steam generators, surface pipelines, and tubing. 20 sandstone
Impairment and even failure of EOR projects can be caused by reservoir heterogeneities. To reservoirs with
address that challenge, the Halliburton reservoir and completion team developed the concept
of coupling the water-alternating-gas (WAG) method with smart completions (that is, with oil viscosities
downhole control valves [WAG-CVs]). The gas-to-water injection alternates by zones, and slug
volumes are controlled by a workflow that incorporates smart algorithms. At a given time,
ranging from
water and gas are injected in different zones. Numerical simulations presented at EAGE 120 to 1,900 cp.
conference by Carvajal et al. (2014) are encouraging (Figure 5). The case study considered a
pair of injection wells and a producing horizontal well located 3,000 feet (914 meters) apart,
each with 4,000-foot (1,219-meters) laterals and with six permeability zones within 10 md
and 150 md. Results are shown in Figure 5. A field pilot test is to be conducted to confirm
the concept value for highly heterogeneous reservoirs.

50

42%
40
37%
Oil Recovery Factor, %

30%
30

23%

20

12%
10

0
Depletion Gas Water WAG WAG-CV
Drive Injection Injection

Figure 5 Comparison of WAG-CV methodology forecasted results with traditional flooding methods

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 The Key to Sustaining EOR Value in a Highly Variable Price Environment

FINAL REMARKS
Maximization
Clearly Halliburton has consolidated a team that is able to both deploy traditional EOR
projects and innovate, thus adding more value and extending EOR to harsher conditions.
of economic
Maximization of economic benefits and risk reduction have been accomplished by a variety benefits and
of techniques and approaches that are now commercially available. With so many recent and
forthcoming developments, this remains an exciting time for EOR. risk reduction
REFERENCES
have been
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(2013). Maximizing the Value of Real-Time Operations for Diagnostic and Optimization at the Right Time. SPE 163696-MS.
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Beliveau, D. (2008). Waterflooding Viscous Oil. SPE 113132–MS. http://dx.doi.org/10.2118/113132-PA

Carvajal, G. A.; Konopczynski, M.; Chacón, A.; Mogollón, J. L.; and Knabe, S. (2014). Intelligent Water-Alternating-Gas
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Manichand, R.; Mogollón, J. L.; Bergwijn, S.; Graanoogst, F.; and Ramdajal, R. (2010). Preliminary Assessment of
Tambaredjo Heavy Oilfield Polymer Flooding Pilot Test. SPE 138728. http://dx.doi.org/10.2118/138728-MS

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