DOE-FUNDED STUDY ON STATE OF ROZ OIL EXTRACTION EXPECTED SOON

Tamar Hallerman
GHG Monitor
07/27/12

Researchers in the West Permian Basin are gearing up to release one of the only publicly-available studies to date on the state of oil extraction operations from water-saturated deposits in the region using CO2 flooding. Expected to be released in the next few weeks, the study—the first of three being undertaken by the University of Texas-Permian Basin that is being funded in part by the Department of Energy—is looking to summarize production and geological knowledge from residual oil zone (ROZ) extraction, researchers said. For the last three years, researchers have compiled both public information and private data from the handful of companies pursuing oil extraction from ROZs. By looking at well logs, core samples and drill cuttings from ROZs and comparing them to those extracted from the main pay zone of oil fields in the region, researchers are gaining a true sense of how to characterize ROZs and how they differ from other oil deposits, the study’s head investigator, Bob Trentham of the University of Texas-Permian Basin, told GHG Monitor. “We are somewhat in a pioneering phase because not every company has bought into the idea of residual oil zones, CO2 flooding and their economic value,” Trentham said. “This is a new methodology, a new technology and a new understanding.” The research team also conducted groundwater modeling for the San Andres area of the Basin, where all current ROZ operations are taking place, to learn how the geology shaped the formation of the ROZs, Trentham said.

The study concludes that oil saturations within the ROZs range from 20 to 40 percent, similar to mature waterflooded reservoirs in main pay zones, and that the formations could have a strong potential to both boost domestic oil production and sequester the CO2 injected into the wells for tens of thousands of years. “We’re seeing a whole series of indicators for potential for residual oil zones…as a result of our work,” Trentham said, adding: “We’ve established basically a baseline. We’ve done the modeling effort, we’ve proven that it can be done by mother nature, we’ve established the baseline for what we think an ROZ looks like and now we’re going to go into more depth and detail in individual case studies of fields.”

Oil Industry Quietly Pursues ROZ Extraction

While the oil industry has been pursing CO2 flooding in the Permian Basin’s main pay zone via enhanced oil recovery for more than four decades, it has only recently looked at using the same techniques for the less economic water-saturated oil deposits. ROZs are oil-bearing transition zones that exist between typical oil deposits and waterfloods that naturally occur in the lower portions of some reservoirs. In those transition zones, oil mixes with water in varying concentrations. Since the ROZs are naturally waterflooded, in effect, CO2 injection is needed to produce the residual oil. While the zones were initially considered uneconomic to tap in the past, field tests conducted by several oil companies over the last 20 years combined with the current high price of oil have caused many in the industry to reconsider, particularly in the Permian Basin, where there is already an extensive pipeline infrastructure for CO2 in place.

Oil producers have quietly but significantly ramped up oil extraction from ROZs in recent years, with major oil companies like Shell and Hess moving forward on work as early as the 1980s. In the 1990s some pioneer companies started to do pilot tests in small areas within their fields in an attempt to demonstrate that they can economically recover oil from ROZs. Over the years, some of those turned into field-wide floods, and there are now 11 active projects in the region, said study co-author Steve Melzer, owner of Melzer Consulting who has done much of the pioneering research on EOR and ROZs in west Texas. In an interview with GHG Monitor, Melzer said that ROZs in the Permian Basin are currently producing roughly 10,000 barrels of oil daily, about 5 percent of daily oil from EOR operations. Melzer said, though, that there is much more potential for ROZs—likely enough to generate as much oil in the Permian Basin as all production to date, he said—and that the limiting factor, like that of traditional EOR operations, is the amount of pure CO2 available for injection. “We’re developing a whole other set of targets for oil production that weren’t even on the radar in the 1990s, when nobody knew how big these were and where they were, and that’s evolving as we speak,” Melzer said. In 2006, DOE estimated that ROZs could produce 100 billion barrels of technically recoverable oil in U.S. reservoirs.

Industry Remains Close to Vest with ROZ Info

The study will be one of the most comprehensive public looks at ROZ extraction, a practice that the oil industry has kept quiet on in recent years, Trentham said. While some oil companies have been pursuing ROZ extraction with EOR for years, most have stayed very secretive about their operations in order to maintain their competitive advantages, which is what makes this study all the more important, according to Melzer. “None of those companies were publishing anything about the data they had gathered and so we interceded,” he said. “The advantage we bring to the table is that we can get information from multiple projects and get it out into the open literature.”

The same group also has two other DOE-sponsored studies in the pipeline, Trentham said. One is a case study to develop a geologic and reservoir characterization model of the main pay zone and ROZ for the Goldsmith oil field in Texas, where Legado Resources has begun ROZ flooding. The other will look at more formally characterizing ROZs more in depth throughout the Permian Basin using geophysical well logs, well test data, core and fluid samples and water chemistry data, according to DOE.