Enhanced oil recovery, the technology which extracts oil which cannot be obtained via conventional technologies, is set to experience a boom time in the coming years, with implications for the Middle East and Africa
According to a report by Global Market Insights, the enhanced oil recovery (EOR) market could exceed US$140bn by 2024. The International Energy Agency (IEA) launched the EOR Technology Collaboration Programme to cut down the cost of existing techniques and develop new methods to enhance productivity. According to the report, Algeria, Egypt and Nigeria are the potential growth areas for the EOR market in Africa.
The report cites an increased number of stripper and marginal wells, as well as growing demand to produce oil for the lowest possible cost as drivers for the projected boom in the EOR market. In particular, the US is set to experience strong growth in line with increased demand for petroleum products and growing E&P investments.
Additionally, Donald Trump is seen as a pro-oil president with this reputation bolstered by his overturning of former president Barack Obama’s ban on new oil and gas drilling along the US coast, which came in the last few weeks of his presidency. In a statement, the US Interior Department said the proposal called for 47 lease sales over a five-year period. This is a dramatic reversal of Mr Obama’s ban, which protected 115mn acres of waters off the coast of Alaska and 3.8mn acres in the Atlantic Ocean. However, a major stumbling block for drilling plans in the Arctic Ocean could be the immense technical challenges for E&P in such remote and hostile conditions. The feasibility of Mr Trump’s plans could depend on advances in EOR technology and the willingness to invest in best practice techniques and expertise.
In May 2017, TechSci released a research report entitled Middle East & Africa Enhanced Oil Recovery Market, which projected a CAGR of more than 10 per cent in the MEA region between 2012 and 2022. The report attributed much of this projected growth to adaptability of tertiary methods by Middle East countries, as well as year-on-year change in energy consumption patterns and anticipated change in global oil demand until 2022.
In terms of methods of EOR, in 2016, thermal methods were most prevalent in the MEA markets largely because of its effectiveness in areas where crude oil has a low API gravity and high viscosity. However, this is expected to decline by 2022, with gas and chemical methods, as well as new techniques, being developed. Miscible gas represented the second-largest share of the EOR market in this region. According to the TechSco report, there is more potential for EOR in offshore operations with EOR being technically difficult offshore.
Plenty of big hitters in the oil and gas industry are keen for their slice of the potentially lucrative EOR pie, with companies such as Schlumberger, BHGE, Statoil, Kinder Morgan, Chevron, Petroleum Development Oman, Lukoil, Occidental Petroleum, Halliburton. ConocoPhillips, BP, Denbury Resources, Shell, ExxonMobil, NALCO, Wintershall, Saudi Aramco, CNOOC, Linde AG and Abu Dhabi National Oil Company all getting involved.
