Injection of Gas and Improved Oil Recovery - the Norwegian Experience

1. Injection of Gas and Improved Oil Recovery - the Norwegian Experience By Steinar Njå, Norwegian Petroleum Directorate

2. Flaring of Associated Gas The first oil production in Norway was done by Philips Petroleum Company Norway using the revamped drilling rig Gulftide from the summer 1971 until spring 1974, i.e. during development of the Ekofisk field. This is the only time flaring of associated gas has been approved in Norway for other reason than safety. I.e. for regular production.

3. Historicalviewofthe flaring onthe NCS Gas exportstarted NPD Task force CO2 tax introduced

4. PrudentExtraction and Utilization Petr. Act § 4-1 “Production of petroleum shall take place in such manner that as much as possible of the petroleum in place in each individual petroleum deposit, or in several deposits in combination, will be produced. The production shall take place in accordance with prudent technical and sound economic principlesand in such a manner that waste of petroleum or reservoir energy is avoided. The licensee shall carry out continuous evaluationof production strategy and technical solutions and shall take the necessary measuresin order to achieve this.” Petr. Act § 4-4 “Flaring in excess of the quantities needed for normal operational safety shall not be allowed unless approved by the Ministry” GGFR, Paris 25.4.12

5. Overview of policies and regulations – Norway • Petroleum Act requires licensees to address associated gas utilization (Plan for Development and Operation (PDO) and Plan for Installation and Operation (PIO) • EIA is part of the PDO/PIO approval process • Often PDO/PIOs only approved after significant investments to avoid flaring (eg. temporary re-injection) • Regulatory authority: Norwegian Petroleum Directorate (NPD) • Measurements, reporting and monitoring • Metering systems with accuracy of +/- 5% • Audited by NPD and reported volumes basis for taxation • Assessment of policies and regulations • Building of gas infrastructure of vital importance • Regulation of grid access • State owns infrastructure through Gassled, non-discriminatory access with Ministry of Petroleum and energy setting transport tariffs • Tax on flaring is part of a general CO2 tax on energy combustion • Little/no impact on routine flaring but has help improve technologies and operational procedures for non-routine flaring • CO2 tax of importance for continued compliance

6. Total gas production onthe NCS, 2000-2010 GGFR, Paris 25.4.12

7. Focused Norwegian R&D Programs on IOR Experience transfer FORUM Financed by oil companies R&D Programs by NRC Follow up R&D programs Authorities + oil companies EOR Field Pilots ! State R&D Program for IOR and Reservoir Technology 1985 - 91 1981 2010 To be continued Financed by group of oil companies GGFR, Paris 25.4.12

8. Background for decisionson gas injection • Lackof gas exportopportunity and flaring not permitted and /or • Gas injection gave higheroilrecovery and highereconomicvaluethan water injection • Injected gas to be sold to the market at an later stage Historical gas injection per field on the Norwegian Continental Shelf GGFR, Paris 25.4.12

9. GGFR, Paris 25.4.12

10. Norwegianexperiencewith gas injection • Successful IOR projects !!! • Lowerresidualoilwith gas injection. Reported to NPD: • Average Sorg = 0,10 (fieldswith gas injection) • AverageSorw= 0,22 (fieldswith water injection) Challenge • The timing ofthe production oftheinjected gas GGFR, Paris 25.4.12

11. Effectof gas injection Conclusions from NPD review: • 28 % ofthe gross gas production has beenreinjected • Additional 320-360 million scmoil, includingapprovedfuture plans for gas injection • Total efficiency; additionaloil : 0,43-0,48 million scmoil/ billlionscmgas Historical gas injection and future approved plans for gas injection GGFR, Paris 25.4.12

12. The economics of gas re-injection • Gas re-injection has to competewithother alternatives for utilization • For IOR purposes therearealwaysgreatuncertaintiesregardingefficiency and addedrecovery of oil • For storage purposes betterutilizationoftransportation systems and improveddeliveryefficency is themaineconomical driver • Some gas will be used as fuel(2-3%) to reinject and 15-25% of gas reinjectedwill be left in thereservoir GGFR, Paris 25.4.12

13. Conclusions (I) • The combination of • prohibition against flaring of gas • IOR research efforts • authorities initiatives • prudent technical work and sounds decisions by oil companies has led to several successful gas injection projects • Several large Norwegian fields with gas-injection have recovery factors for oil in the range 53-66 %. • Gas injection in Norwegian fields yields an extra oil recovery in the range 320 to 360 million scm. GGFR, Paris 25.4.12

14. Conclusions (II) • An important question is how long it is profitable to keep the injected gas in the reservoir. The timing of the massive production of the injected gas should not be fixed at an early stage, but needs to be updated late in the field life. • Re-injection of gas for IOR purpose represents a great potential for value creation. If the gas cannot be exported to the market or utilized on site, the reinjection is also an alternative that contributes to reducing a global environmental problem GGFR, Paris 25.4.12

15. Thank you for your attention! www.npd.no GGFR, Paris 25.4.12