irandrillinfo Iran Drilling Information Sun, 17 Jun 2018 14:15:08 +0000 en-US hourly 1 TECHNICAL OIL RECOVERY POTENTIAL FROM RESIDUAL OIL ZONES Sun, 17 Jun 2018 14:15:08 +0000


Residual oil zones (ROZ), the portion of an oil reservoir below its traditional producing oil-water contacts, can hold large volumes of previously undocumented and undeveloped domestic oil resources. The first comprehensive report on this topic, “Stranded Oil in the Residual Oil Zone,” examined the origin, nature and presence of ROZ resources.1 The second report “Assessing Technical and Economic Recovery of Resources in Residual Oil Zones” provided a reservoir simulation-based study of applying CO2-EOR to establish the feasibility of recovering oil from residual oil zones in five major oil reservoirs2. This third report, “Technical Oil Recovery Potential from Residual Oil Zones: Permian Basin”, provides an in-depth documentation of the in-place and recoverable ROZ potential from this important domestic oil production basin.

A. Overview of ROZ Recovery Potential. Because of their low to moderate oil saturation settings, ROZ resources are not economic when using primary or secondary oil recovery. As such, the traditionally domestic oil wells have traditionally been completed at or above the oil-water contact (the first observance of water) and thus consistently above the residual oil zone. Outside of a small group of forward- looking operators, little is still known about the ability to successfully identify and produce the ROZ resource. However, in the current economic climate, with depleting domestic oil reserves and operators’ desires to extend reservoir life, ROZ resources offer an important new source of domestic oil production. Because of this, there is growing interest in further understanding the resource size and recoverable oil potential in the relatively thick (100 to 300 feet) residual oil zones located beneath the main pay zones of oil reservoirs.

Carbon dioxide (CO2) enhanced oil recovery (EOR) has emerged as a viable technique for recovering residual oil left behind (“stranded”) after waterflooding, mainly in light oil reservoirs below 3,000 feet in depth. Yet, the oil saturation in the transition

1 Melzer, S., (2006) “Stranded Oil in the Residual Zone.” U.S. Department of Energy Report.
2 “Assessing Technical And Economic Recovery Of Oil Resources In Residual Oil Zones”, Advanced Resources International, February 2006, U.S. Department of Energy Report.

1-1 February 2006

(TZ) and residual oil zones (ROZ) of a reservoir is often similar to the oil saturations left after waterflooding. As such, with progress in CO2 flooding technology and availability of affordable supplies of CO2, the oil resource in the ROZ could readily become a feasibility target.

Further confirmation of this new oil resource potential is provided by the various residual oil zone CO2-EOR pilot tests currently underway. Two of these pilot tests are operated by OxyPermian in the Denver and Bennett Ranch Units of the giant Wasson oil field. The Denver Unit pilot was the first to target transition and residual oil zones. A third ROZ pilot test, operated by Amerada Hess, is in the Seminole San Andres Unit. This is a 500 acre pilot TZ/ROZ flood underway since 1996. The response from this field pilot test has been most promising, providing an estimated cumulative recovery of 3 million barrels of oil to date, at an oil rate of1,400 bbls/day.3 An expanding CO2-EOR project targeting the ROZ is also underway in the Salt Creek field (by ExxonMobil) involving 36 wells and incremental production of 2,000 bbls/day.4

The information on the operation and performance of these ROZ field pilot projects has been most valuable in calibrating the reservoir simulation-based oil recovery assessments of the TZ/ROZ resource examined by this study.

B. Outline for Report. This report assesses the size of the in-place technically recoverable oil resource from the transition and residual oil zones of the Permian Basin. It first provides a very brief introduction to the oil plays and the major fields with tiled oil-water contacts (OWCs) and TZ/ROZ resources in the Permian Basin. Then, it examines, using a reservoir simulation calibrated streamtube model, the technical feasibility of recovering this previously by-passed TZ/ROZ resource using CO2-EOR.

3 “2004 Worldwide EOR Survey,” Oil & Gas Journal, April 12, 2004, pp. 53-65.
4 Wilkinson, J.R., Genetti, D.B., and Henning, G.T., “ Lessons Learned fro Mature Carbonates for Application to Middle East Fields”, SPE 88770, presented at the SPE 11th Abu Dhabi International Petroleum Exhibition and Conference, October 10-13, 2004.

1-2 February 2006

C. Definition of Terms. The term residual oil zone (ROZ), as used in this study, also includes the more commonly known transition zone (TZ). Although often used interchangeably, the two terms describe different portions of an oil reservoir. All oil reservoirs have a transition zone, an interval tens of feet below the traditionally- defined producing oil-water contact (OWC) where the oil saturation falls rapidly. The thickness of this interval is controlled by capillary forces and the nature of the rock’s “wetting phase”, with lower permeability oil-wet rocks providing thicker TZs and water- wet rocks providing thinner ones.

While all oil reservoirs have a transition zone, not all have a residual oil zone, as specific hydrological or geological conditions need to have occurred to create a ROZ, as further discussed below. The great bulk of the ROZ will be at a residual oil saturation (similar to that after a conventional waterflood), tapering to near zero oil saturation at the base. A typical reservoir oil saturation profile is shown in Figure 1, Oil Saturation Profile in the TZ/ROZ: Adopted from Wasson Denver Unit Well.

The transition zone (TZ) is the upper portion of the reservoir interval just below the traditional OWC and produces both water and oil. The residual oil zone (ROZ) is generally the middle and lower portions of the reservoir interval below the traditional OWC and upon initial completion produces primarily water.

The reason that both terms – – residual oil zone (ROZ) and transition zone (TZ) – – are used in this report is to bring special attention to the abnormally thick ROZs that can exist for reasons beyond normal capillary effects. For example, if the original oil trap possessed a thick oil column in its geologic past and the lower portion of this oil column was tilted and/or invaded by water, this lower reservoir interval would have an oil saturation much like that of the residual oil saturation in the swept zone of a water flood. In certain geologic settings, oil reservoirs can have an anomalously thick ROZ and thus could contribute considerable additional CO2-EOR reserves.

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MP Slams US interference in OPEC Decisions Sun, 17 Jun 2018 14:05:10 +0000 According to ICANA, the Iranian parliament’s website, Fereidoun Hasanvand underlined the upcoming ordinary meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna, saying, “The meeting is one of the most important OPEC meetings in decades, because Donald Trump, after pulling out of the JCPOA (Joint Comprehensive Plan of Action), has written a secret letter to some OPEC members, including Saudi Arabia, trying to alleviate part of the social and economic pressure that the American people are shouldering today by jacking up OPEC oil output.”
“It’s uncommon that a country like the United States pressures OPEC members and resorts to political means to weaken other members,” the MP added.
Hasanvand said: “Iran has always displayed its adherence to OPEC decisions and has fully complied with all the decisions and will adhere to all the agreements by the end of 2018.”
He said there are currently no signs of a shortage of oil on the market, adding the US is creating a completely false and unreal demand in the market to put pressure on some OPEC member states in a bid to draw away the organization from its lawful direction.
The chairman of the Energy Committee of the Parliament further said, “We are opposed to any political decision in OPEC’s resolutions, especially in OPEC’s 174th ordinary meeting.
“OPEC must announce its support for the members at all stages and show its commitment to the decisions in practice,” the MP added.
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Oil Market Highlights Crude Oil Price Movements Sun, 17 Jun 2018 13:58:25 +0000
Oil Market Highlights Crude Oil Price Movements
In April, the OPEC Reference Basket (ORB) rose by $4.67, or 7.3%, month-on-month (m-o-m), to average $68.43/b, with Dated Brent and Dubai rising by nearly 9% each, while spot WTI increased by 6%. Year-to- date (y-t-d), the ORB value was $13.85, or 26.7%, higher at $65.67/b, compared with the same period a year earlier. Geopolitical concerns, tightening product inventories and robust demand provided support for prices. With regard to crude oil futures, in April, ICE Brent was up $5.04, or 7.6%, at $71.76/b, while NYMEX WTI gained $3.55, or 5.7%, to stand at $66.33/b. Y-t-d, ICE Brent is $13.96, or 25.7%, higher at $68.36/b, while NYMEX WTI has risen by $12.15, or 23.5%, to $63.77/b, compared with the same period a year earlier. The ICE Brent/NYMEX WTI spread widened significantly to $5.44/b in April – the widest this year – on bearish US fundamentals. Despite the surge in crude oil futures prices, speculative net long positions ended lower, however, long-to-short ratios in ICE Brent increased further to record highs. Both Brent and Dubai market structures moved deeper into backwardation on strong prompt month prices and healthy physical crude markets, while NYMEX WTI remained at the same level, in backwardation. The sweet/sour differentials widened further in Europe and Asia, while in the US Gulf Coast (USGC), the spread narrowed more.
World Economy
The global GDP growth forecast remains at 3.8% for 2018, following growth of 3.8% in 2017. Expected US growth in 2018 is unchanged from the previous month at 2.7%, after growth of 2.3% in 2017. Growth in the Euro-zone was revised down to 2.2% in 2018, following growth of 2.5% in 2017. Japan’s 2018 growth forecast remains at 1.5%, after growth of 1.7% in 2017. For 2018, Developing Countries’ GPD growth is seen unchanged at 4.4%, following growth of 4.0% a year earlier. While India’s 2018 forecast was revised up slightly to 7.3%, following 2017 GDP growth of 6.3%, China’s 2018 GDP growth forecast remains unchanged at 6.5%, after 2017 growth of 6.9%. Brazil and Russia also saw an unchanged GDP growth forecast at 2.1% and 1.8% in 2018, respectively, following growth of 1% and 1.5% in 2017.
World Oil Demand
World oil demand growth for 2017 was kept unchanged from last month’s assessment, despite some adjustments to both OECD and non-OECD regions, which offset each other. World oil demand is estimated to have grown by 1.65 mb/d in 2017 to average 97.20 mb/d. For 2018, oil demand growth is forecast to increase by around 1.65 mb/d to average 98.85 mb/d. Growth was revised higher by 25 tb/d compared with last month’s assessment. This is mainly to account for firm OECD data in 1Q18. Oil demand growth in the non-OECD region was also revised upward, primarily on the back of better-than-expected data from Other Asia, including India, and Latin America. China is anticipated to lead oil demand growth in 2018, followed by Other Asia and OECD Americas.
World Oil Supply
Non-OPEC supply for 2017 was revised down slightly by 0.01 mb/d to now show growth of 0.87 mb/d y-o-y and average 57.89 mb/d. The revision came on the back of a review of historical non-conventional production data leading to downward adjustments, mostly for Brazil, as well as upward revisions, notably for OECD Europe. Furthermore, in 2018, upward revisions in 1Q18 to the forecasts of the US, Argentina, Colombia and China were partially offset by downward adjustments to Canada, Mexico, Norway, UK, and Brazil. This has led to an upward revision to 2018 non-OPEC supply of 0.01 mb/d. It is now estimated to grow by 1.72 mb/d y-o-y to average 59.62 mb/d, compared to last month’s assessment. Following a downward revision in 2017, OPEC NGLs and non-conventional liquids production in 2018 are forecast to grow by 0.18 mb/d y-o-y, to average 6.49 mb/d. OPEC crude oil production in April 2018 increased by 12 tb/d, to average 31.93 mb/d, according to secondary sources.

OPEC Monthly Oil Market Report – May 2018 i

Oil Market Highlights

Oil Market Highlights

Product Markets and Refining Operations
Product markets in the Atlantic Basin saw strong gains in April. In the US, refining margins strengthened across the top and middle of the barrel. Reduced refinery product output caused by planned and unplanned refinery outages, along with record-breaking gasoline export levels and strong diesel inventory drawdowns drove US margins to a record three-year high in April. In Europe, product markets saw a recovery, supported by the gasoline and diesel complexes, despite losses in all other products. Meanwhile, product markets in Asia weakened due to pressure seen at the top of the barrel, attributed to high supply in the regional gasoline market. Higher Oman crude prices in April, despite the onset of spring refinery maintenance season, further exacerbated the downturn seen in the Asian market.
Tanker Market
Dirty tanker spot freight rates mostly declined in April or remained at previously low levels. VLCC average spot freight rates stayed almost flat compared with the previous month, while Suezmax and Aframax rates dropped by 6% and 3% m-o-m, respectively. The decline in rates was attributed to limited inquiries, continuing tonnage oversupply, as well as reduced port and transit delays. Similarly, the clean tanker market saw lower monthly freight rates on most reported routes due to the same circumstances.
Stock Movements
Preliminary data for March 2018 shows that total OECD commercial oil stocks fell by 12.7 mb to stand at 2,829 mb, which is 9 mb above the latest five-year average. However, this current level of OECD stocks still remains 258 mb above January 2014. Within the components, crude stocks in March 2018 indicated a surplus of 12 mb, while product stocks witnessed a deficit of 3 mb against the latest five-year average. In terms of days of forward cover, OECD commercial stocks fell in March to stand at 59.9 days, which is 1.6 days lower than the latest five-year average.
Balance of Supply and Demand
In 2017, demand for OPEC crude is estimated to stand at 33.0 mb/d, 0.6 mb/d higher than a year earlier. In 2018, demand for OPEC crude is forecast at 32.7 mb/d, 0.3 mb/d lower than the 2017 level.
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