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EOR remains Iran’s major challenge

Business Materials 8 December 2016 19:42

By Dalga Khatinoglu

Iran signed three heads of agreements (HOA) with Anglo-Dutch Shell to study South Azadegan with less than 6 percent oil recovery rate and Yadavaran with 8 percent oil recovery rate as well as the country’s second major gas deposit Kish field with 1.4 trillion cubic meters of sour gas reserves.

Enhanced oil recovery (EOR) sector still remains one of Iran’s major challenges in upstream sector.

Azadegan and Yadavaran as well as Yaran field are joint between Iran and Iraq, called West Karoon block with 64 billion barrels of oil in-situ reserves, accounting about 8 percent of the country’s total oil in-situ reserves. The recovery rate of this block is about 6 percent in average, namely in normal situation, Iran is able to produce only 6 percent of the reserves. The country plans to increase this rate to 25 percent.

In total, the recovery rate of Iran’s oil fields is about 25 percent.

Fiscal Year

Recoverable oil reserves

Life of reserves

New in-situ reserves discovery

Oil production

Billion barrels

Billion barrels

Billion barrels

2006/2007

138.2

85

9.26

1.480

2007-2008

137.6

84

2.841

1.497

2008/2009

137

84

9.719

1.466

2009/2010

151.2

94

1.04

1.433

2010/2011

154.6

95

1.5

1.439

2011/2012

156.5

96

1.68

1.424

2012/2013

156.5

127

2.12

1.037

2013/2014

157.5

128

-

1.030

2014/2015

158.4

125

2.29

1023

Iran has injected about 580 bcm to oil fields during 1995-2016, but the figure is two times less than the demanded volume to maintain oil production level. According to a research conducted by Iran’s Oil Ministry, seen by Trend, for extracting each extra barrel of oil, about 85 cubic meters of gas re-injection is needed and the cost of production, transit and injection of each cubic meter of gas is less than 3 cents. Then, re-injection of gas to oil fields is very profitable, while 80 percent of the re-cycled gas is recoverable.

Increasing the recovery rate of oil by injecting gas and polymer or water flooding can increase the life of field, production volume and cumulative output relatively, but Iran needs new technology, modern studies and new method of drillings, etc to boost the recovery rate of fields. For instance, Water may be effective for oils that are lighter in density, but it only results in a 10% extraction rate for reservoirs containing heavier oils, according to International Energy Agency (IEA).

For instance, currently French giant is studying Iran’s biggest gas field, South Pars, joint with Qatar.

The sides have produced 3.4 trillion cubic meters (tcm) of gas from this field with more than 50 tcm reserves cumulatively. Currently, Iran and Qatar produces about 350 bcm/y altogether from South Pars, while Iran plans to increase its production from the current 160 bcm/y to 290 bcm in 2021.

The Iranian section of the gas field holds 13 trillion m3 of gas and 18bn barrels of condensates and the pressure of reservoir is expected to fall in 2023. Total is studying the behaviour of field and needed technologies and the method of recovery rate increasing ways, but initially, compressors and 20,000-metric ton platforms – ten times heavier that the current platforms there – are needed for maintaining the gas and gas condensate output.

According to the IEA, 30-70 percent more oil could be recovered from mature oil reservoirs through the use of enhanced oil recovery technologies by 2040.

EOR market is expected to reach $283 billion by 2020, according to a research, published by Hexa Reports.

Regarding $583 billion aglobal investment in upstream oil and gas sector in 2015 and $1.8 trillion total investments in energy sector, the EOR market perspective is quite bright and huge.

Currently, above 80 percent of Iran’s active oil fields are in their second half-life and naturally lose 8-12 percent of their productivity each year. On the other hand, Iran has introduced 49 oil and gas fields for foreigners to be developed. Adding a percent on Iran’s average oil recovery rate equals producing more 7-8 billion barrels of oil.

Dalga Khatinoglu is the head of Trend Agency's Iran news service, follow him on Twitter: @dalgakhatinoglu

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