Key strategy of Newsletter

The newsletter's goal is to inform the industry about key IOR activities and thus to contribute to an increase in Norwegian activities. A specific goal is to target key decision makers in companies to inform and motivate them to continue developing profitable IOR projects and to maintain a focus on the long term opportunities available.

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Improved Oil Recovery

The term Improved Oil Recovery is used about any measures resulting in an increased oil recovery factor from a reservoir, including improved reservoir management, horizontal and extended reach wells, etc. . . and also advanced methods ( EOR). NPD has addressed the definition of IOR in the status report, "Improved Oil Recovery-Norwegian Shelf" issued November 1993. This report is still available at NPD.

Today's opportunities
1) Many innovative IOR projects offer a good return and an opportunity to utilize existing facilities.

2) Geologic and political risks are reduced when you invest in an existing field .

3) Investing in IOR and developing technical competence in company personnel builds growth for the future. Companies who can develop profitable projects are in a strategic advantage.

Offer from NPD
1) The authorities have offered to work with any company who wants to discuss IOR options in today's investment climate. This was outlined in St.meld. (White Paper) no. 26 which invited industry to come up with better ideas ( page number 24). In addition, NPD is in a dialogue with companies on improving working relationships and procedures and significant progress has been made.

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NPD Comments on Key Articles

NPD believes that if the cost cutting measures outlined in the ONS papers are realized that this will add considerable reserves to new and existing fields.

NPD also believes that the innovative approach to shared risk/reward discussed in the World Outlook for IOR section is an area for Norwegian suppliers and manufacturers to consider along with the field operators.

NPD thinks the ongoing research highlighted in this newsletter plays an important role in IOR. NPD also thinks the operating companies' plans to pilot new methods are an interesting ongoing development. More innovation and change must take place to ensure recovery goals are achieved. NPD has identified the potential to increase recovery from the Norwegian shelf by as much as 9% (36% to 45% of STOOIP).

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Statoil's Statfjord Field IOR Plans

The latest drainage strategy for the Statfjord formation is under review by partners. The new drainage strategy in the Statfjord formation calls for updip water injection in the Upper Statfjord and downdip WAG in Lower Staff. This investment will pay for itself with increased reserves and accelerated oil production.

Statoil presented a paper in the 9th Tulsa Symposium on IOR which indicated in the Raude member of the Statfjord formation, WAG could incrementally increase recovery 13% above waterflood recovery.

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Example of Joint Research-Operating Company Project RUTH/Oseberg Foam Pilot

The Oseberg foam pilot is a good model for successful IOR co-operation. The Oseberg field has gas injection into a gas cap. Downdip producers can prematurely produce at high GOR levels if gas coning occurs. It was decided to test foam as a blocking agent. If foam is successful gas production will be delayed on wells closest to the gas oil contact ( GOC). The RUTH researchers from RF, IKU and Norsk Hydro have been working together on the foam pilot. Input was given in a planning meeting prior to the test to optimize foam benefits. A joint review of results was held in September to keep research partners abreast of field results from the foam injection conducted this summer. The test was "operationally successful" and had a "positive effect in terms of reducing GOR". Effective blocking of gas coning is a significant financial goal for all parties.

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ONS 94

The authorities and the operating companies each shared their own views at the IOR Session of Offshore Northern Seas August 1994.

Arild Nystad highlighted the NPD program for IOR which emphasizes combined industry and research focus on short and long term IOR opportunities through programs like Reservoir Utilization through advanced Technological Help ( RUTH). NPD would like to see a high level of pilot programs (first phase of full field implementation) in Norway at this time to be sure that full field development activities are in place prior to the year 2000. These pilot programs will help quantify recovery efficiencies and costs which should provide the necessary information to support full field implementation. Many IOR projects can be implemented without pilots because they are utilizing proven technology. The IOR target for Norway is about 530 million Sm³ or an increase in recovery from 36% to 45%. NPD maintains an active dialogue with industry and research to maintain a WIN WIN atmosphere.

Bruce Coleman presented the UK's Department of Trade and Industry IOR activities on the UK side of the North Sea. There are 8 field trials ongoing and plans for five field projects by 1997. IOR is viewed as wealth creation and the government actively visits the operating companies offices to continue good communication. The IOR target in the UK is 1.6 billion barrels at a cost of 2.6 US dollars per barrel. This represents an increase in field wide recovery of 5.3% of the oil in place. The reservoir management plans for some fields have changed recently with a new strategy to produce the field below the bubble point and create free gas saturation in the crest of the field. This is called "late field depressurization".

Rolf Utseth with Statoil and Nigel Brealey with BP both presented information concerning industrie's perspectives on IOR. Both companies emphasized the economic environment major oil companies currently face with increased emphasis on reducing operating costs on existing fields and funding projects with the greatest return including technical risk. BP is active with IOR projects in Alaska and the Gulf of Mexico where costs are lower. BP stressed the need to push novel drilling techniques further and reduce drilling costs overall.

Presentations on "Making the Northern Seas Competitive" were focused on future construction work for production/drilling facilities. Most speakers agreed that the British CRINE report must be followed. The CRINE report suggests ways to reduce project costs by up to 40% through better project management.

Presentations on "Cost Efficient Solutions for Field Development" stressed the need for standardized building blocks for offshore needs and making each block less then 100 tons for reduced costs in transportation and placement. There was a call to challenge specific parts of the special "Norwegian" requirements like the need for redundant systems and metal to metal seals. There were examples given of ways to achieve authorities' goals with new interpretations of regulations which actually reduced costs and increased safety/reliability. It was pointed out that drilling costs are 30% lower on the British side of the North Sea and construction in the Gulf of Mexico costs 50% less than similar projects on the Norwegian shelf.

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15th International Energy Agency (IEA) Workshop 28 to 31 August

The purpose of this collaborative project on Enhanced Oil Recovery is to share results from nine countries currently active in EOR efforts. The three days of papers covered theoretical work, pilot applications, and field results.

Representatives from Indonesia, Russia and Hungary attended as guests. Three papers from the RUTH program and one from Norske Hydro were reviewed in the meeting and received favorable comments after the presentation. Several successful EOR field results were reviewed which may be of interest to the Norwegian shelf . The immiscible C02 flood of the Kubiki field in Japan showed that an immiscible flood could increase recovery through swelling, viscosity reduction, and extraction. This is good news since several gas or WAG processes proposed for Norway are planned to be conducted below the minimum miscibility pressure ( MMP). A second positive field test was reported on the giant Daqing oil field in China. This test showed that polymer flooding will increase recovery by reducing the water-oil mobility ratio and improving vertical sweep in a layered reservoir with severe contrasting permeabilities.

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RUTH-Seminar 5-6 Sept. 1994

The two day seminar was held at the NPD. About 120 participants attended the program from a wide range of areas including research, authorities, and industry. The four year research program has almost completed its third year and significant progress has been achieved on the six main areas:

1) Gas flooding work included:
*scaling petrophysical parameters
*fluid flow in fractured chalk
*mechanisms affecting residual oil saturation.
2) Combined gas water flooding work:
*Quantifying efficiency of combined gas/water injection processes
* three phase relative permeabilities
*North Sea WAG pilot results.
Gravity segregation can play a positive role with this process. Gas rising to the attic of a field displaces trapped oil and dense water settling into low structure areas can displace oil up to a producer.

This process also has considerable activity outside of RUTH. Excellent results are reported on Gullfaks WAG pilot in Lower Brent sands and a number of other fields are under evaluation for WAG pilots. Fields under evaluation include Snorre ( Statfjord formation ), Statfjord (Lower Statfjord formation ), Brage and Veslefrikk.

3) Foams can play a critical role as a treatment to cusping, mobility, and vertical sweep problems in connection with gasflooding or WAG. Preliminary results from Oseberg pilot foam test are encouraging for North Sea application.
4) Polymer gels work includes both near well and deep displacement of gels. A wide range of options are available for gels including cement squeeze substitution, zonal treatment, and combinations with other recovery methods. Outside RUTH, a second nearwell silica treatment was performed in the Gullfaks field.
5) Surfactants work continues in partnership with operating companies to find cost effective chemical processes.
6) Microbial (MEOR) is a frontier process which offers the potential of low costs, environmentally friendly treatments and deep penetration of treatment.

Several of these RUTH subprograms are moving ahead with their company sponsors who have field testing underway or planned shortly. Workshops with key individuals have helped coordination with the operating companies who are the final users (customers ) of these technologies. The scope and focus of the work is reviewed technically by an external audit team and reviewed financially by the main RUTH Board which includes authorities, operating companies, Stavanger College, and Norwegian Institute of Technology. In the spirit of continuous improvement, there was a panel debate at the end of the meeting. Several ideas were identified to improve the transition from research to field implementation.

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5th Conference Reservoir Management 11-12 October by Norsk Petroleumsforening

The well attended conference successfully shared two days of cost effective reservoir management technology. Improved reservoir descriptions were a key part of many presentations. Statoil reported that reinterpretation of Gullfaks field seismic amplitude data were used to identify oil water contacts. Additional reserves can now be developed economically at lower risk by drilling new wells from existing platforms.

Koenraad Weber with Shell/Tech. University Delft gave a paper on future reservoir characterization. He stated that higher recoveries can be profitable if remaining oil is determined accurately and industry has more realistic heterogeneity in reservoir models

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World Outlook on IOR

The September 26, 1994 Oil and Gas Journal has a special report on worldwide IOR projects. Worldwide oil production from projects using "enhanced" oil recovery techniques was 1.9 million B/D. It should be of interest to Norwegian operators that today Canada has 48 active hydrocarbon miscible floods. Canada is similar to Norway with respect to having extensive gas reserves near existing oil fields and gas resources not committed to pipelines. Two other interesting items in the article show how technical and business innovation are part of new projects in 1994. First, the U.S. Department of Energy is jointly funding a cyclic CO2 flood where the same well is an injector and then switched back to production. This technique is underway now in Statoil's Gullfaks field with injection of associated gas and production from the same wellbore to produce oil trapped updip of producers. Second, innovative suppliers of CO2 are sharing the risk and rewards of incremental oil production from existing fields by providing CO2 in exchange for an interest in the oil production. This may be an area for Norwegian suppliers and manufacturers to consider along with operators. For example, a gas compressor or chemical manufacturer would share in the incremental production gained from the project in exchange for goods/services rendered. The special partnerships would only be involved in IOR processes that add value.

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Upcoming events

1995 IOR Strategy workshop to be held February 21-22, 1995 at Solstrand. This meeting will focus on the decision making and managerial aspects of IOR.
1995 final PROFIT forum on April 25-26, 1995 at NPD in Stavanger. Participating companies will review results of the five year research program.

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