North Dakota’s elected officials are pushing hard to deploy Enhanced Oil Recovery (EOR) technologies to boost oil production in the Bakken before Donald Trump’s tenure as president expires. The Trump administration has significantly opened up federal lands and offshore waters for oil and gas drilling, rolling back Biden-era conservation rules to mandate more quarterly lease sales. And proposals have been advanced to expand offshore drilling to areas previously restricted, including the federal waters off the coasts of California, Florida and Alaska. But the clock is ticking on these opportunities. “We have a tremendous opportunity in the next two years, because we have an administration that understands this stuff. We have to get them to mobilize a little faster,” Gov. Kelly Armstrong said during a prominent oil conference in May. “Time is the enemy, but they understand this, and so we have gone from headwinds to tailwinds. We’ve only tapped 15% of the Bakken and Three Forks. The other 85% is still trapped in the rock. If we can create the policy and the incentives, and you all can unlock even another 15% with EOR, that’s an entirely new boom,” Armstrong added.
EOR is a tertiary extraction process used to recover trapped crude oil from mature reservoirs that cannot be extracted using primary (natural pressure) or secondary (water/gas injection) methods. EOR relies on sophisticated techniques to alter the original properties of the oil, such as its viscosity and density, and to improve its flow through rock formations. The Bakken Formation has produced over 5 billion barrels of oil since the start of the U.S. Shale Revolution in 2007. The easiest-to-reach sweet spots are rapidly depleting, forcing producers to shift towards harder-to-extract reserves. Meanwhile, rising equipment and labor costs have pushed the average drilling breakeven point in the Bakken close to $60 per barrel, significantly higher than extraction costs within the prolific Permian Basin.
The first EOR method is Thermal Recovery, an EOR technology used primarily to unlock heavy, viscous crude oils. Steam is injected into a well for several weeks, the well is shut in to let the rock absorb heat, and then the same well is used to pump the now-thinned oil to the surface. Alternatively, steam flooding is deployed wherein steam is continuously pumped into injection wells, pushing a zone of hot water and vaporized oil ahead of it, thus driving the mobilized crude toward designated production wells. Thermal injection is most effective in shallow to moderately deep reservoirs (usually under 5,000 feet) containing thick, high-porosity sands with heavy or extra-heavy oils (typically below 20° API gravity).
However, gas injection is rapidly gaining the upper hand as the go-to EOR technology. While thermal recovery leads in total crude volume produced (due to massive steam projects in heavy oil fields like those in Canada and California), gas injection accounts for a significantly larger number of total active EOR projects worldwide. Indeed, gas injection accounts for ~60% of all EOR projects in the United States. The technology involves injecting gases like carbon dioxide, nitrogen, or natural gas into the reservoir. These gases dissolve in the oil to reduce viscosity and help to restore or maintain reservoir pressure. Gas injection is ideal for extracting light to medium-weight oils in deep reservoirs where the injected gas can mix seamlessly with the oil.
Occidental Petroleum (NYSE:OXY) and Exxon Mobil (NYSE:XOM) are deploying Carbon Capture, Utilization, and Storage (CCUS) for EOR purposes. OXY operates 34 CO2 EOR projects and thousands of injection wells across the Permian Basin that capture CO2 from industrial sources such as ethanol facilities and integrate it with Direct Air Capture (DAC) technology to produce “net-zero oil”.
Exxon operates the LaBarge/Shute Creek facility in Wyoming, one of the largest anthropogenic carbon capture and processing operations in the world. The captured CO2 is primarily transported via pipeline to oil fields in the Rocky Mountains and the Great Plains for EOR. Exxon is also the owner of Denbury’s vast CCUS infrastructure after it acquired the company in 2023. Denbury is the premier pure-play EOR and CCUS operator in the U.S., managing a vast 1,300+ mile pipeline network connecting industrial CO2 sources in the Gulf Coast and Rocky Mountains to depleted oil fields.
Finally, there’s Chemical Injection, which uses polymers to push oil uniformly and surfactants to release oil droplets from rock surfaces, significantly increasing the total recoverable oil. Long-chain polymers are added to injected water to increase its viscosity, bringing it closer to the viscosity of the crude oil, thus ensuring a more uniform, efficient sweep of the reservoir. Alternatively, surfactants or alkaline chemicals are injected to drastically lower the interfacial tension between the trapped oil and the water.
North Dakota oil producers have yet to determine the most efficient and cost-effective EOR technology to deploy in the Bakken. Additionally, oil and gas executives have warned that EOR is far from a silver bullet due to the many unknowns. That said, the EOR technology that proves to be the most profitable is likely to carry the day, “Economics are always going to rule the day,” said Pam Heatherington, general manager of ExxonMobil’s Americas division and CEO of Denbury, Exxon’s subsidiary that focuses on CO2 transport and storage.
Алекс Кимани, Oilprice.com
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