Identifying Improved Oil Recovery Potential: A New Systematic Risk Management Approach
Authors: Thompson M. A. , Goodyear S. G. 
Published: December 2007

Abstract
The application of Improved Oil Recovery (IOR) techniques allows the economic value of existing fields to be maximised, through increased oil recovery and field life extension. This is especially important in mature fields, as oil production rates decline and water production increases. Environmental considerations also favour IOR projects, since they can reduce the need for new green field developments, provide a means of utilising unwanted associated gas production and ultimately a disposal route for CO2.
Identifying appropriate projects in a field portfolio can be a difficult task, because of the large number of IOR techniques and reservoir combinations that need to be considered. Furthermore, projects may not go forward because the perceived balance between the rewards and the risks is not considered to be competitive compared to other more conventional options, such as further development drilling or exploration and the subsequent appraisal and development of new fields. In this paper, tools and methodologies will be described that provide a systematic approach for evaluating technical and economic IOR potential within a risk management framework. This three stage approach enables IOR projects to be compared directly with conventional exploration and development projects, based on an assessment, rather than a perception, of the balance between rewards and risks.
During the first stage, the MAESTRO tool is used to provide a rapid initial assessment (screening) of IOR potential within a field portfolio, estimating the technical viability, incremental recovery and economics of each combination of reservoir and IOR technique. This allows possible projects to be ranked so that clearly unviable processes can be eliminated and priorities set for the subsequent stages of evaluation. In stage two the remaining projects are assessed using "prospecting" simulations to examine the recovery mechanisms in more detail and to establish base case economics. Some of the important reservoir specific parameters that control the IOR processes will not be known at this time. Experience is used to define credible sets of process parameters, taking into account typical distributions of values, the cost of subsequently determining them and the potential project rewards. Even at this level, good reservoir engineering is needed to ensure that IOR projects are not prematurely eliminated. Only projects with economic base cases proceed to the final stage of evaluation, a programme of detailed appraisal and project design work, which may include the acquisition of additional field or laboratory data.
The prospecting simulations and detailed appraisal studies are conducted in a risk management framework. Risk assessment tools are used to quantify project risk and identify the Critical Project Parameters (CPPs), where uncertainty has most impact on project performance. Proactive risk management techniques, including improved project design, key data acquisition and contingency planning are used to improve the balance between project return and exposure.