A Model For Forecasting The Economic Potential For Enhanced Oil Recovery In Canada
Authors: Bing P.C. , Bowers B. , Lomas R.H. 
Published: March 2010

Abstract
A model for the economic evaluation of enhanced oil recovery projects is described in this paper. It incorporates recent work done under the sponsorship of the United States Department of Energy to estimate incremental oil recovery from the various enhanced oil recovery processes.
The EOR processes considered in the model are steam drive, in-situ combustion carbon dioxide miscible hydrocarbon miscible, surfactant (micro-emulsion) flood alkaline flood, and polymer-assisted waterflood. The model predicts incremental enhanced oil recovery, and generates injection and production profiles.
Economic viability is determined incrementally, by comparing a pool's economic performance with implementation of an EOR project to the pool's economic performance in the base case, without implementation of an EOR project. This approach permits correct modelling of the different price, royalty and fiscal incentives available for EOR projects.

Introduction
Reserves additions from enhanced recovery projects may be a significant source of future oil supplies. To focus some attention on this potential supply source the National Energy Board (NEB) commissioned D & S Petroleum consultants (1974) Ltd. in 1976 to do a study of the tertiary recovery potential in western Canada. This study calculated a tertiary recovery potential of 2894 million barrels. Given the size of this potential the NEB continued to develop techniques to refine its estimates and to better define this potential's sensitivity to economic parameters. The NEB efforts were reinforced by the 1980 study by P. Prince(3) which had a strong focus on economics. The EOR model described in this paper is a continuation of these developments. It incorporates improved techniques for the estimation of technical and economic potentials for tertiary recovery.
The analysis is on a pool by pool basis. A pool will have economic potential for tertiary recovery, if implementation of a tertiary recovery scheme is technically possible and financially profitable. To determine the profitability of tertiary recovery projects. projects must be analyzed on an incremental basis. For this, it is necessary to carry out an economic evaluation of an oil pool's performance both in a base case, and in a tertiary case. The base case must include pool development to completion of the secondary recovery stage, if secondary recovery is possible, and the pool is not already fully developed.
The incremental analysis explicitly recognizes alternative opportunities. The alternative to a tertiary recovery project on a pool is the pool's development without the tertiary project, Le. the base case. A tertiary project will be implemented only if the incremental case has acceptable economics.
For both the base case and the tertiary case the model simulates injection, production, cost and cash flow time profiles. Time profiles of incremental production, revenues, costs, and cash flows are obtained by subtracting base case profiles from the corresponding tertiary case profiles. For each pool, project evaluation criteria such as rate of return, supply price, and benefit-cost ratios are evaluated, using the incremental profiles to determine whether the pool's incremental recovery should be included in the estimate of economic potential.