Enhanced Oil Recovery (EOR) projects are increasing dramatically all over the world. Also known as “tertiary recovery”, this is the next stage in oil production past primary and secondary recovery and involves multiple sophisticated processes that employ pressure, temperature and/or chemicals to release 70-90 per cent more oil than typical extraction methods.

My favorite story of enhanced oil recovery is the history of the Joffre Viking pool in Alberta. This large pool had been producing since the late 1950s. But by 1980, after delivering over 15 million barrels of oil, production had declined to less than 20 barrels of oil per day. The Joffre pool was thought to be “done” and abandoned. Then a group of engineers had an unusual idea. They formed Vikor Resources Ltd., acquired the rights to the dead pool, redeveloped a number of wells by putting well heads back on and then connecting some of these wells to a Nova ethylene plant about half a mile away. This plant produced carbon dioxide (C02) as a waste product. The CO2 was injected into the reservoir, and by reducing the viscosity of the oil, acted as a scrubbing agent on the remaining trapped oil.

Within six months significant new oil began to flow. Vikor continued to expand the number of wells involved over the next decade, until by 1993, the pool was at 800 barrels a day. This project encountered a lot of challenges over the years, not the least of which was the price collapses of 1986, 1992 and 1998, but Vikor persevered. Today, after 25 years, this pool is still producing about 400 barrels of oil per day and is well on the way to producing over seven million barrels of oil, which would have been left in the ground.

EOR projects of all types are particularly common in many countries with large oil demands. After the United States, China appears to have the largest number of projects, particularly using chemical floods. It likely produces over 80 per cent of the world’s production based on that method. In July 2011, the Jakarta Post announced that 12 oil companies operating in Indonesia have stated they are ready to implement EOR technologies. India is working on several projects including air injection pilots. A few countries in the Middle East, Russia and Europe have EOR projects underway. Argentina, Columbia, Venezuela and Brazil all have ongoing or are initiating EOR schemes.

But the United States is the world leader in EOR development. Several states have seen a strong resurgence in their oil industry as a result of oil companies returning to exploit old pools. In a Forbes March 2010 article on Occidental Petroleum, CEO Ray Irani stated: “The best place to find new oil is in old oilfields” and “We’re in the oil recovery business, not the oil discovery business”. A significant amount of his companies’ budget has been allocated to EOR projects. And it isn’t just the majors conducting EOR projects in the states; a lot of small to mid-sized companies are doing it as well. These include Whiting Petroleum, Cano Petroleum, the Dakota Gas Co., Continental Petroleum and Danbury Petroleum – to name just a few. There are good indications that a lot more EOR projects are under way in the U.S. then are readily evident because of the limited reporting requirements in many states.

With a strong commodity price and a growing understanding of how to properly apply EOR technologies, the right projects are very viable for smaller operators. This is why I think the time is right for our new company, Terrex, to establish an EOR niche in Canada.

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