CHEMICAL EOR FIELD EXPERIENCE Oil Chem Technologies Inc

CHEMICAL EOR FIELD EXPERIENCE Oil Chem Technologies, Inc. Sugar Land, TX USA www. oil-chem. com

PRESENTATION OUTLINE § Introduction to Oil Chem § EOR – past § EOR - Oil Chem Technologies field experience to share § EOR - future

PRESENTATION OUTLINE § Introduction § EOR – past § EOR - Oil Chem Technologies field experience to share § EOR - future

WHY EOR?

Oil Recovery Overview BAVIER; BASIC CONCEPTS OF EOR PROCESSES(1991)

WHY CHEMICAL EOR?

ECONOMICS FOR FIELD ASP PROJECTS Field W. Kiehl Cambridge Daqing Surfactant 0. 10% 0. 30% Alkali 0. 80% 1. 25% 1. 00% Polymer 1050 ppm 1425 ppm 1200 ppm Tot. Cost $375, 000 $2, 518, 000 $1, 009, 000 Inc. ASP Oil 275, 000 1, 143, 000 270, 000 Cost/bbl $2. 20 $3. 79 $1. 46

ROLE OF SURFACTANTS § Reduce interfacial tension § Wettability alteration § Polymer, CDG, BW, etc. can be used along with surfactants when mobility control is necessary

SURFACE OR INTERFACIAL TENSIONS SYSTEM m. N/m Water 72 Pure Hydrocarbons ~ 40 Crude Oil ~ 30 - 40 Crude Oil/Water ~ 3 - 30 Crude Oil/Water/Surfactant < 0. 01

RELATIONSHIP BETWEEN CAPILLARY NUMBER AND OIL RECOVERY Nc = µ / cosθ Nc = Capillary Number = Darcy Velocity µ = Viscosity s= Interfacial Tension Θ=wetting angle

PRESENTATION OUTLINE § Introduction § EOR – past § EOR - Oil Chem Technologies field experience to share § EOR - future

LOUDON FLOOD - EXXON 1983 § 2. 3% surfactant § 96% of the connate salinity § 0. 3% pore volume § 0. 1% Xanthan gum § 56 million pounds surfactant was injected in 9 months § 68% ROIP

ROBINSON – MARATHON 1983 § 10% surfactant – petroleum sulfonate § 0. 8% hexanol as co-surfactant § 2. 5% salt § No polymer § 0. 1 pore volume § 19 – 21% ROIP

CHEMICAL EOR PAST PROBLEMS Technical success but limited “commercial” success Reasons?

EOR BY CHEMICAL FLOOD Limited commercial success for the past two decades - Reasons? § Sensitivity to oil price § Limitations of chemicals § High surfactant concentration § Salinity optimization required § Potential emulsion block

However, § Extensive lab evaluations and field pilot tests § § support the feasibility of chemical flooding New chemicals and processes open the door for new opportunities Recent field data using these new chemical and processes proves chemical flooding is an effective way to recover residual oil

PRESENTATION OUTLINE § Introduction § EOR – past § EOR - Oil Chem Technologies field experience to share § EOR - future

CURRENT PROJECTS § 21 Current projects § 20 MT to 400 MT Surfactant/mo § 400 MT @ 0. 1% = 28, 000 bbl/mo injection § California 50, 000 MT surfactant/yr @ 0. 2% =155, 000 bbl/yr § Build plant onsite

CHINA EOR PROJECTS • Heavy crude recovery • Low perm formation oil recovery • High temp. / high salinities • Effective, economical offshore EOR

CHINA EOR PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS SS B 2080, SS B 5050, SS B 1688, ORS-46 L, ORS-97 HF, ORS-41 HF

1992 -94: LAB EVALUATION Over 100 Surfactants Were Tested Including: § ORS-41 § Petroleum Sulfonates § Carboxylates § Lignin Sulfonate/Petroleum Sulfonates § Microbiological

1995 - INITIAL FIELD EVALUATION § Daqing No. 4 Field - Oil Chem Technologies’ ORS-41 § Daqing No. 1 Field – another US company’s Petroleum Sulfonate

1996 -1998: ENLARGED FIELD EVALUATION ORS-41 was the ONLY surfactant chosen for enlarged field evaluation. More than 7000 MT of the ORS-41 was injected in several field blocks and this confirmed the viability of the ASP process SPE 36748, 57288, 71061, 71492

DAQING CENTRAL WELL SPE 57288

DAQING CENTRAL FIELD SPE 84896

HEAVY OIL RECOVERY BY CREATING WATER EXTERNAL PSEUDOEMULSION

HEAVY OIL PSEUDO-EMULSION Control 0. 1% SF-100 Surfactant

HEAVY OIL PSEUDO-EMULSION Control 0. 1% SF-100 Surfactant

HEAVY OIL PSEUDO-EMULSION Control Oil Viscosity = 6, 700 cps 0. 1% SF-100 Surfactant Oil Viscosity < 200 cps

Oil Recovery, % LAB CORE FLOOD DATA Water flood Injection Volume, PV

LOW PERM INJECTIVITY ENHANCER § Permeability: 0. 1 – 10 md § High water injection pressure makes water flood unfeasible § FI series surfactants reduced injection pressure, increased injectivity § Effectively increased the injectivity in several fields in China and USA

CANADA EOR PROJECTS • • • HEAVY CRUDE TAR SAND LOWER RESERVOIR TEMPERATURES FRESH WATER SOURCES HIGH SALINITY RESERVOIRS FRACTURED CARBONATE FORMATIONS

CANADA EOR PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS SS B 2080, SS B 5050, SS B 1688, ORS-46 L, ORS-97 HF, ORS-41 HF Some field results will be published upon completion of projects

NORTHERN CANADA SP PROJECT § Heavy oil field, API = 12 -13 § Under polymer flood § Added 0. 1% surfactant with polymer in November, 2006 § ~ 3 months later, the water cut reduced from 97% to 58%

UNITED STATES EOR PROJECTS • FRESH WATER SOURCES • HIGH SALINITY RESERVOIRS • FRACTURED CARBONATE FORMATIONS • LOW PERMEABILITY

UNITED STATES EOR PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS ORS-41 HF (2), ORS-62, ORS-97, ORS-46 HF, ORS-162, SS-7593, SS B 1688(2)

SHO-VEL-TUM FIELD § On production > 40 yrs, extensive water flood, § § produced 4 bbl/day ASP started on 2/98, using Na 2 CO 3 and ORS 62 Total incremental oil > 10, 444 bbl (22 bbls/day) in 1. 3 years SPE 84904

OIL SATURATION AFTER ASP INJECTION SPE 84904

MELLOTT RANCH WYOMING ASP PROJECT § 0. 1% ORS-46 HF, 1% Na. OH, 1300 PPM polymer § Recovered 989, 000 bbl or 16. 4 % OOIP between 2003 and 2005 § Injection volume decreased 2, 800, 000 bbl due decreased water cut

MELLOTT RANCH ASP PROJECT - ORS-46 HF WATER FLOOD SINCE 1966 ASP

BIG SINKING, KENTUCKY Project Information § Crude oil : 100 Million bbl § Bottom Hole Temperature: 30 o. C § Depth: 1150 ft § Thickness: 25 feet (7. 32 meter) § Permeability: 45 m. D SPE 100004

BIG SINKING, KENTUCKY Chemical injected: 0. 8% Na. OH + 0. 1% ORS-162 HF Problems overcome: § IFT lowered from 23. 6 to 0. 001 m. N/m § Poor water injectivity § High water cuts § 220% increase in injectivity § Large field trial scheduled to begin in 12/2007 SPE 89384

BIG SINKING, KENTUCKY SPE 89384

TANNER FIELD, WYOMING Project Information § Crude oil : 21 o API § Bottom Hole Temperature: 175 o. F § Depth: 8915 ft § Thickness: 25 ft § Porosity: 20% § Permeability: 200 m. D SPE 100004

TANNER, WYOMING SPE 100004

SOUTHEAST ASIA PROJECTS • HEAVY CRUDE • HIGH TEMPERATURES • ENVIRONMENT CONCERNS • FRESH WATER SOURCE

SOUTHEAST ASIA PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS SS 6 -72 LV, SS 8020

OFFSHORE ALKALINE SURFACTANT (AS) PROJECT § SEA WATER IS SOFTENED ON THE PLATFORM § SINGLE WELL TEST SUCCESSFULLY PERFORMED USING SS 6 -72 LV INJECTED WITH NAOH § PILOT PROJECT WILL PROCEED

SOUTH AMERICA PROJECTS • VARIOUS RESERVOIR CONDITIONS • MANY EOR CANDIDATE FIELDS – OFFSHORE & INLAND • ASPHALTENE REMOVAL / WELLBORE DAMAGE REMOVAL • IMPROVED GAS RECOVERY/REDUCED WATER CUT

SOUTH AMERICA PROJECTS INJECTED, ON-GOING & APPROVED PROJECTS ORS-57 HF, ORS-41 HF (2), SS-6046, SS GI-1416, SS B 1688

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PRESENTATION OUTLINE § Introduction § EOR – past § EOR - Oil Chem Technologies field experience to share § EOR - future

EOR BY CHEMICAL FLOOD The future is bright – Reasons? § High oil prices § Energy demand § Diminishing reserves § Past experience § New technologies

CHEMICAL EOR - THE FUTURE § New processes use less surfactant (up to 10 times less) § Extensive lab evaluations support the feasibility of chemical flooding § Field data proves chemical flooding is an effective way to recover residual oil § Cost of chemicals have not increased in proportion to price of crude oil

COST OF CHEMICALS 1980 2006 $3 -4/lb $1/lb $0. 40 -0. 60/lb $0. 60 -1. 2/lb Alkali 3 $0. 12/lb $0. 20 -. 040/lb Crude Oil $12/bbl $50 -70/bbl $8 -15 $0. 50 -$5 Polymer 1 Surfactant 2 Incr. Cost/bbl Some processes eliminate need for polymer 2 Surfactant concentration has been reduced by 10 3 Alkali has been reduced by 50% or in some cases is not needed at all 1

PROCESS CHOICES § Surfactant Polymer § Alkaline Surfactant Polymer § Smart Surfactant § Pseudo-emulsion § Chemical/Mechanical

SCALING UP

ENLARGED FIELD CHEMICAL FLOOD § Raw Material Supply • Source (local or import) • Availability (quantity, quality) • Alternative suppliers • Storage § Manufacturing Location • Foreign, domestic, on-site • Shipping, tax, etc. • Storage and distribution • Flexibility

ENLARGED FIELD CHEMICAL FLOOD § Capital Investment • Up-front investment • Operational cost • By-products

CHEMICAL EOR OPPORTUNITIES § Conventional Oil Recover Factor <33% § Oil reserves & reservoir characteristics have already been confirmed § Improved processes and chemicals are available § Better scaling and modeling has been developed

CHEMICAL EOR OPPORTUNITIES § Two trillion bbl of oil remain in depleted or § § abandoned wells Chemical floods offer the only chance in many depleted & water flooded reservoirs Chemical EOR must be re-evaluated based on current technical & economic conditions Minimal or no remediation is necessary, minimizing environmental constraints Trained personnel are available locally

COMPLIMENTARY SURFACTANT EVALUATION To: Oil Chem Technologies Total Bill SS-7593 = $ 0. 00

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