2012
2010
IOR/EOR Global Market Overview;
The Economic Potential of Existing Unconventional Resources and Marginal Fields
Kader Dicko – Senior Analyst
© Infield Systems Ltd. 2012
Infield Systems – www.infield.com
Established over 20 years ago – specialist firm in the offshore energy sector (data and market Analysis)
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2012
2
Contents

Global Macro Overview

IOR/EOR Global Overview - “Extending the project lifetime of mature fields”

Conclusions
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Global Macro Overview
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Despite Slowdown, Emerging Economies Will Continue to Drive
Demand
•China and India are leading the pack (~50% of the global growth)
Source: IEA
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Supply is Struggling to Keep Pace with Global Demand
millions of barrels per day
5
dollars per barrel
Change from previous year
100
World oil consumption (left axis)
Forecast
Non-OPEC production (left axis)
4
80
WTI crude oil price (right axis)
60
3
40
2
20
1
0
-1
-20
-2
-40
-3
-60
-4
-80
-5
-100
2009-Q1
2010-Q1
2011-Q1
2012-Q1
2013-Q1
Source: Short-Term Energy Outlook, April 2012
Source: EIA
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Depleting Reserves in Mature Basins (North Sea)
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Depleting Reserves in Mature Basins (North Sea)
UKCS Production
Norway Production 2011
• Oil Production Y-O-Y Decline: 7%
• Gas Production Y-O-Y Decline: 5%
• Oil Production peaked in 2000 and Gas in 2010
5.00
Norway Production
4.50
• Oil Production Y-O-Y Decline: 18%
• Gas Production Y-O-Y Decline: 22%
• Oil Production peaked in 1999 and Gas in 2000
4.00
Total Production (million boepd)
UKCS Production 2011
Oil
Natural Gas
NGL
Condensate
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
1971
Source: NPD (Norway) and DECC (UK)
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2011
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Depleting Reserves in Mature Basins (GoM)
Field Depletion in the Gulf of Mexico
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Remaining Reserves in Harder to Reach Places - Deepwater
Average size of discoveries decreases with depth, more fields will have to be developed as a result
1,000 metres
Hydrocarbon Field Discoveries, Water Depth and Reserve Size
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Remaining Reserves in Harder to Reach Places – Arctic Circle
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Further, Deeper & Harsher 1960’s
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Further, Deeper & Harsher 2000’s
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Frontier and Emerging Regions
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Geopolitical Concerns – Iran Nuclear Crisis
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Geopolitical Concerns – The Receipt from The Arab Spring
Country
Libya
Syria
Egypt
Tunisia
Bahrain
Yemen
Sub-Totals
Costs to GDP
US$7.67bn
US$6.07bn
US$4.27bn
US$2.03bn
US$0.39bn
US$0.12bn
US$20.56bn
Costs to Public Finances
US$6.49bn
US$21.22bn
US$5.52bn
US$0.49bn
US$0.69bn
US$0.12bn
US$35.28bn
Total Costs
US$14.2bn
US$27.3bn
US$9.79bn
US$2.52bn
US$1.09bn
US$0.98bn
US$55.84bn
•Countries in the table now require an additional ~U$20-30/bbl to balance the books
•Saudi Arabia is looking for $90-100/bbl, up from $70/bbl previously to pay for its promised
social welfare schemes
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2012
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Oil Price Volatility and Spread Between WTI and Brent
Brent and WTI Oil Prices
Brent
WTI
160
Oil price premiums maintained by the “Iranian nuclear crisis”
140
$/barrel
120
100
80
60
Narrower Spread
40
20
0
JAN
MAY
2002
SEP
JAN
2003
MAY
SEP
JAN
2004
MAY
SEP
2005
JAN
MAY
SEP
2006
JAN
MAY
2007
SEP
JAN
MAY
2008
SEP
JAN
2009
© Infield Systems Ltd. 2012
MAY
SEP
2010
JAN
MAY
SEP
2011
JAN
MAY
2012
SEP
JAN
MAY
SEP
2013
JAN
2014
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High Oil Prices Precede Recessions
International Crude Oil Prices and Global GDP Growth
•High oil prices are dangerous for a fragile global economy
Source: EIA
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Global Offshore Capex 2012-2016 – Healthy Capex Going Forward
Global Offshore Capex includes Detailed Engineering, Development Drilling, Installation, Procurement and Construction
Ultradeep
4%
Deep
2%
Deep
13%
Ultradeep
52%
Deep
14%
Shallow
83%
Deep
26%
Ultradeep
4%
Ultradeep
7%
Shallow
22%
Shallow
91%
Shallow
82%
North America:US$65bn
Middle East:US$54bn
Europe:US$99bn
Asia:US$92bn
Deep
20%
Shallow
24%
Ultradeep
20%
Deep
47%
Ultradeep
56%
Shallow
33%
Ultradeep
21%
Shallow
58%
Latin America:US$90bn
Deep
15%
Shallow
85%
Africa:US$96bn
Deep
21%
Australasia:US$43bn
Global Offshore Capex: US$539bn
Shallow <500m, Deep 500m<X<1,499m, Ultra Deep>1,499m
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IOR/EOR Global Overview
“Extending the project lifetime of
mature fields”
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With Supply Constraints IOR/EOR is Key to Raise Recovery Factors
unconventional production, renewable
energy
Source: EIA
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IOR/EOR More Relevant Than Ever – Why?
Conventional Recovery
Enhanced Recovery
IOR (improved oil
recovery)
EOR (enhanced oil
recovery)
Primary Recovery
e.g. natural flow,
artificial lift
Secondary Recovery
e.g. waterflood,
artificial pressure
maintenance (WAG)
Tertiary Recovery
e.g. Thermal, polymer,
solvent
Approximately 70% of global oil production originates from mature fields (approximately 35% of the oil
in place is recoverable through conventional production methods)
No more easy oil plays (geologically complex reservoirs in deeper, more remote and/or harsh
environments)
 Most EOR projects are onshore, however with recent advances in technology, offshore projects now
offer considerable opportunities
Higher oil prices improve the project economics of IOR/EOR applications, mostly offshore
EOR not restricted to brownfield projects, increasing applications for greenfield projects (e.g. heavy oil)
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Major IOR/EOR Challenges Offshore
•Environmental challenges (e.g. pressure, weather)
•Geological constraints (e.g. lithology of the reservoir)
•Cost (e.g. higher cost base for infrastructures offshore compared to onshore)
•Increased logistics and maintenance (e.g. remoteness, access to injectants)
•Risk management (e.g. geologic carbon sequestration leakage risk)
Mostly Water and Gas injections methods used offshore
Statoil Tordis - IOR Subsea Module
Source: Picture courtesy of Statoil
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Global Subsea Well Injections 2012-2020
Gas
CO2
Africa
Europe
Asia
Middle East & Caspian Sea
WAG
200
180
180
160
160
140
140
120
120
Units
200
100
Latin America
North America
Australasia
100
80
80
60
60
40
40
20
20
0
0
2012
2013
2014
2015
2016
2017
2018
2019
2020
2012
Subsea Completions (unit) by Injectants 2012-2020
9,000
2013
2014
2015
2016
2017
2018
2019
2020
Subsea Completions (unit) by Regions 2012-2020
Development Drilling
Procurement And Construction
Installation
Detailed Engineering
8,000
7,000
6,000
US$m
Units
Water
5,000
4,000
3,000
2,000
1,000
0
2012
2013
2014
2015
2016
2017
2018
2019
2020
Global Subsea Completions Capex (US$m) 2012-2020
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Conclusions
For now, IOR/EOR applications are mostly used onshore, but great potential
offshore
High oil prices support the sanctioning of more IOR/EOR applications offshore,
although environmental limitations are still a major concern
The development (through technology and innovation) of IOR/EOR applications
is crucial to fill the growing gap between declining global oil production and
emerging economies oil consumption
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Thank You
Questions????
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Forward Looking Disclaimer
The information contained in this document is believed to be accurate, but no representation or warranty, express or
implied, is made by Infield Systems Limited as to the completeness, accuracy or fairness of any information contained
in it, and we do not accept any responsibility in relation to such information whether fact, opinion or conclusion that the
reader may draw. The views expressed are those of the individual contributors and do not represent those of the
publishers.
Some of the statements contained in this document are forward-looking statements. Forward looking statements
include but are not limited to, statements concerning estimates of recoverable hydrocarbons, expected hydrocarbon
prices, expected costs, numbers of development units, statements relating to the continued advancement of the
industry’s projects and other statements which are not historical facts. When used in this document, and in other
published information of the Company, the words such as "could," "estimate," "expect," "intend," "may," "potential,"
"should," and similar expressions are forward-looking statements. Although the Company believes that its expectations
reflected in the forward-looking statements are reasonable, such statements involve risk and uncertainties and no
assurance can be given that actual results will be consistent with these forward-looking statements. Various factors
could cause actual results to differ from these forward-looking statements including the potential for the industry’s
projects to experience technical or mechanical problems or changes in financial decisions, geological conditions in the
reservoir may not result in a commercial level of oil and gas production, changes in product prices and other risks not
anticipated by the Company. Since forward-looking statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties.
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