Economic threshold of CO2-EOR and CO2 storage in the North Sea: A case study of the Claymore, Scott and Buzzard oil fields. (November 2018)

• Record Type: Journal Article
• Authors: Welkenhuysen, Kris; Meyvis, Bruno; Swennen, Rudy; Piessens, Kris
• Is Part Of: International journal of greenhouse gas control. Volume 78(2018)
• Page Start: 271
• Page End: 285
• Publication Date: 2018-11
• Subjects: Techno-economic modelling -- CO2-enhanced oil recovery -- CO2 geological storage -- Uncertainty; Greenhouse gases -- Environmental aspects -- Periodicals; Air -- Purification -- Technological innovations -- Periodicals; Gaz à effet de serre -- Périodiques; Gaz à effet de serre -- Réduction -- Périodiques; Air -- Purification -- Technological innovations; Greenhouse gases -- Environmental aspects; Periodicals; 363.73874605
• DOI: 10.1016/j.ijggc.2018.08.013
• Languages: English
• ISSNs: 1750-5836

Abstract

Highlights: Techno-economic simulation of CO2 -EOR investment decisions with PSS IV. CO2 storage is considered after oil production is ceased. Low oil prices reveal economic threshold levels under uncertainty. Hurdle rate scenarios of 10, 11 and 12% are compared for the Scott, Claymore and Buzzard fields. A hurdle rate of 12% would offset risk, Buzzard is the most promising field. Abstract: CO2 -enhanced oil recovery in the North Sea can provide additional oil revenues, prolong the productive lifetime of oil fields, and potentially catalyse the large-scale deployment of CO2 geological storage. Under the current low oil prices, around and below 50 €/bbl, the investment is more difficult to justify. Here we show three case studies for the Claymore, Scott and Buzzard fields offshore of Scotland. A techno-economic assessment is made with the PSS IV simulator considering a low oil price scenario, market uncertainties and geological uncertainty. Stochastic parameters and project flexibility are used to simulate realistic project decisions. The Modified Internal Rate of Return (MIRR) is introduced as a performance indicator in combination with hurdle rate scenarios of 10, 11 and 12% for risk compensation. The possibility of continuing the storage of CO2 after oil production has stopped is considered, and reservoir uncertainty is introduced as stochastic parameters defining the EOR production profile. In terms of total value and development probability, the Buzzard field has the highest potential for a successful CO2 -EOR project in all of the simulated scenarios, followed by Claymore and Scott. When compensating for field size, the Buzzard field still has the highest value per barrel of additionally produced oil, but the Scott field has a higher efficiency compared to Claymore. With an increase of the hurdle rate, the probability on investment in CO2 -EOR decreases, but the probability on a profitable project increases. It also becomes more likely that if an EOR project is started, it will be followed by a CO2 storage phase. A hurdle rate of 12% even completely offsets the financial risk under the simulated conditions.