Rather than investing in new exploration opportunities, oil producers across the region aim to maximise their current reserves using enhanced oil recovery techniques
The oilfields of the Middle East are arguably some of the most agreeable in terms of production, with most being extremely large reservoirs containing easy-to-access hydrocarbons.
This geological good fortune has meant that for several decades the regions major oil producers have been able to use primary recovery techniques to extract oil and gas. Enhanced oil recovery (EOR) has only recently been contemplated and only by smaller producers with smaller fields, such as Oman.
In the Middle East many national oil firms realise that primary production is not a sustainable option
However, there is a trend emerging in the Middle East where many national oil companies (NOCs) realise that primary production is not a sustainable option. This has led most to curb new exploration and instead adopt techniques traditionally used searching for new hydrocarbon resources to accurately map current assets and identify where best to introduce EOR.
EOR covers a range of techniques designed to increase the amount of crude extracted from a field and is also known as tertiary recovery. EOR allows 30-60 per cent or more of a reservoirs original oil to be extracted, compared with the 5-20 per cent typically achieved using primary and secondary recovery techniques.
Pioneer of EOR
Oman is often cited as the pioneer of EOR in the Middle East and the sultanates hydrocarbons industry is working to wring every available drop of oil out of the ground.
Much of Omans reserves have now gone past primary and secondary production, which only requires water to be pumped into the fields, and has moved on to EOR.
In 2000, only 1 per cent of Petroleum Development Omans (PDOs) oil output was produced using tertiary methods. This figure had jumped to 16 per cent by 2011 and will climb to 36 per cent by 2018. Thermal EOR and gas injection will be the two main methods.
PDO is investing billions of dollars on three onshore projects that it says will maintain its capacity of 550,000 b/d.
In March, the UKs Petrofac was awarded a $1bn contract to carry out field works at the Rabab Harweel Integrated Project (RHIP).
Located in the Harweel cluster of onshore fields, RHIP will include sour gas processing facilities, associated gas injection systems and export pipelines.
It will handle the production of oil and gas from the Harweel oil reservoirs using miscible gas injections and the production of gas with condensate from the Rabab reservoir through the partial recycling of sour gas.
The complex has the capacity to export 4.9 million cubic metres a day (cm/d) of sweet gas and 9,700 cm/d of condensate in addition to about 16 million cm/d of high-pressure sour injection.
PDO also plans to tender similar-sized schemes at Yibal Khuff and Budour. The new projects will develop nearly 200,000 b/d of new capacity, offsetting the natural decline of the sultanates oil fields.
By the end of 2012, Omans commitment to its oil fields was paying off, with production rising to 922,000 b/d, after dropping to 715,000 b/d in 2007.
However, the main challenge for Muscat will be to maintain its EOR programmes, while feeding turbines for the additional power required at the fields with limited access to natural gas.
After years of primary oil production, Kuwait Oil Company (KOC) has been implementing a series of water injection projects. In 2011, South Koreas GS Engineering & Construction was awarded a $545m deal to build facilities that would enable 1 million b/d of water to be injected into the Wara oil formation to maintain pressure and production levels at Burgan, the worlds second-largest oil field.
The facilities include 10 water treatment units, 20 tanks, 60 pumps and up to 700 kilometres of pipelines.
KOC is also on the verge of awarding contracts on another scheme worth almost $1bn that aims to provide pressure support for the Sabriya and Raudhatain fields in the north of Kuwait by the end of 2017.
Dubai-based Dodsal Group is the lowest bidder for an effluent water treatment and injection plant to boost crude oil production at the two fields. The plant will have a capacity of 500,000 b/d and collect waste water from four oil-gathering centres in northern Kuwait.
After treatment, the water will be injected into 150 wells using about 250km of pipelines of 6-30 inches in diameter. It also includes storage tanks and pumps.
Heavy oil extraction
A slightly different take on EOR is also being planned for Kuwaits $4.2bn development of the Lower Fars reservoirs.
The fields contain highly viscous heavy oil and, therefore, will require cyclic steam stimulation (CSS) to enable production. This technique involves steam being injected into the reservoir to heat the oil, thereby making it easier to pump to the surface.
This type of advanced EOR is still not needed for Iraqs super-giant fields, but they have suffered decades of underinvestment and are now starting to see major rehabilitation take place. International oil companies (IOCs) operating in the Gulf state need to work hard to hit the pre-agreed production targets, which means investment on several fronts.
Many of the major fields in southern Iraq are set to see billions of dollars spent on upgrade works that will include seawater injection facilities.
The key to these plans, however, is the $10bn Common Seawater Supply Facility (CSSF) project. The scheme involves the construction of a giant seawater treatment facility and pipelines. The US CH2M Hill is carrying out the project management consultancy after being awarded a deal for the first phase of the CSSF in May 2013 by the state-owned South Oil Company of Iraq.
The first phase will have a capacity of 5.2 million b/d of seawater that will be made available for injection. The plant will have a capacity of 12.5 million b/d when fully operational.
The water will be utilised by five fields in southern Iraq: Zubair; Rumaila; West Qurna-1; West Qurna-2; and Majnoon. Further phases will increase supplies to these fields as well as to the Gharraf, Halfaya and Missan oil fields.
Despite the scheme being a major priority for Baghdad, there has still been no award made for the front-end engineering and design. Oil and gas executives operating in Iraq say that unless a decision is made soon, 2017 production targets could be missed.
The delay to the CSSF scheme has not stopped IOCs from pushing ahead with their own water injection infrastructure.
The consortium for the Rumaila oilfield, headed by the UKs BP, is tendering contracts to build water-processing facilities that it hopes will push production at the field to 2.1 million b/d by 2017.
Achieving this will involve ramping up water injection from current levels of 500,000 b/d to more than 8 million b/d. To realise this figure, three packages are planned under the produced water reinjection project (PWRI), a relatively short-term solution that aims to provide water for reinjecting into the field for the next 10 years.
Water will be gathered from the degassing stations and transported to new produced water treatment facilities. The treated water will then be pumped through infield pipelines to reinjection facilities.
Russias Lukoil is also tendering a similar scheme for the West Qurna-2 oil field. International contractors are bidding for a $1bn-plus water-injection and oil-gathering systems with an award expected to be made by the end of 2014.
Three phases of the water injection system are planned with phase one providing water until the end of 2015, phase two until 2019 and phase three up to 2035.
These investments demonstrate that the current focus for the regions NOCs is to prop up ailing production rather than intensify exploration activities.
This means the next decade promises to continue offering opportunities for oil and gas companies, but EOR will be the priority. When production from these mature fields is secured for the medium terms, only then will the focus shift back to finding new sources of hydrocarbons in more complex and harder-to-access formations.
Middle east steps up exploration and production spending
In a report released in late 2013, the UKs Barclays Bank said exploration spending in the Middle East would rise by 14 per cent in 2014.
Saudi Aramco is one of the national oil companies leading this growth, ramping up spending by 20 per cent this year, although the focus is on increasing its gas production rather than developing oil fields. This is reflected in the increased activity in onshore non-conventional gas exploration at three locations across the kingdom.
However, in 2013, Aramcos oil exploration activities bore fruit with three new fields discovered. The company also drilled 29 exploration wells and 216 oil development wells.
Aramco also continues to explore the Red Sea and made one oil discovery there in 2013, Al-Haryd. Despite increased seismic studies in the region, production is still expected to be some years away. However, due to the deep-sea conditions, there will be significant opportunities for oil field services firms and technology providers.
Kuwait Oil Company (KOC) is also ramping up activity and is expected to increase spending by 20 per cent in 2014. The rise is reflected in the challenging formations KOC is aiming to exploit.
The search for oil in Kuwaits Jurassic and Permian geological areas involves drilling at high temperatures and pressures. Other challenges include accurately mapping the formations and assessing the amount of reserves of oil or gas contained in each reservoir. KOCs focus on these formations proves there is little in the way of undiscovered easy-to-access oil in the Middle East now.
The only exception is the semi-autonomous region of northern Iraq, which is considered the last great frontier for oil exploration in the region. Estimates of the oil reserves there are placed at 45 billion barrels. Current production is 200,000 barrels a day (b/d), but the Kurdistan Regional Government says this could rise to as much as 2 million b/d by the end of the decade.
Several international oil companies (IOCs) are carrying out exploration activities in the area, although this has been curtailed by recent militant activity. The US ExxonMobil and Chevron are expected to return when hostilities subside.
Carbon capture and usage in oil recovery
One of the most interesting enhanced oil recovery (EOR) developments of recent times is the carbon capture joint venture signed between Abu Dhabi National Oil Company (Adnoc) and Abu Dhabi Future Energy Company (Masdar).
The $122m carbon capture usage and storage project (CCUS) is under construction at Mussafah in Abu Dhabi with completion due for 2016. Dubai-based Dodsal Group is carrying out the engineering, procurement and construction for the scheme.
The project is the first of its type in the Middle East and will also be the only CCUS outside North America.
The scheme aims to capture 800,000 tonnes of carbon dioxide (CO2) a year. The gas will be transported through a 50-kilometre pipeline network and injected into reservoirs at the onshore Rumaitha oil field, displacing the use of natural gas for EOR.
The scheme has been developed to provide a creative solution to storing heat-trapping gas as well as freeing up more natural gas to be utilised for power generation or industrial use.
The scope of the project includes CO2 compression and dehydration facilities, a CO2 metering and pipeline interface, utilities and support services, a cold-vent relief system and control, maintenance and administration buildings.
In May 2014, the local Alsa Engineering & Construction was selected to build a pilot project for the injection of CO2 at the Rumaitha field.
EOR techniques allow 30-60 per cent or more of a reservoirs oil to be extracted
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