PERMIAN BASIN OPERATORS PRESS CO 2 INJECTION PROGRAMS

Guntis Moritis
Production Editor

The Permian basin of West Texas and Southeast New Mexico is seeing a resurgence of carbon dioxide injection operations in new projects as well as expansions of current ones.

The last burst of activity in the mid-1980s tailed off because of low, uncertain crude oil prices. But now, with a period of relatively stable oil prices at $18-20/bbl and a CO2 price that has fallen to about 60/Mcf from $1/Mcf, operators again are willing to go after sizable oil reserves-about 10-15% of original oil in place-that might otherwise be abandoned.

Helping the economics of enhanced oil recovery projects are a federal tax credit and reduced severance taxes in Texas and New Mexico.

SALT CREEK

The largest new project is in Salt Creek field, Kent County, Tex., where Mobil Exploration & Producing Inc. is operator. CO2 injection is to start in the third quarter of 1993, following completion of Mobil's operated 119 mile, 12-14 in. Estes pipeline that links Salt Creek with the main Permian basin CO2 supply hub at Denver City, Tex. Mobil will obtain CO2. from Shell Pipeline Corp.'s Cortez pipeline. Amoco Pipeline Co.'s Bravo Dome line also will be tied into the Estes pipeline. The $91 million Salt Creek CO2 project will produce a light, 42 gravity oil from the Pennsylvanian Canyon Reef at about 6,300 ft. The field is under waterflood at present.

First phase development will include the central portion of the field that covers about 3,500 acres. Phases 2 and 3 in the northern and southern parts of the field will depend on results from the central area. A 3 year lag time between phases is planned.

The first phase includes about 50 injection wells and 100 producing wells. Because the field is already developed on 20-acre spacing, Mobil plans to drill very few infill wells.

Mobil anticipates an oil production peak of about 28,000 b/d, up from the present 20,000-21,000 b/d. Peak CO2 injection volume will be 150 MMcfd. The produced gas will be processed by expanding the existing natural gas liquids plant. When completed, the plant will have a capacity of 75 MMcfd, of which 70-80% will be CO2.

Cost of plant expansion, including compression, is $75 million.

To remove the CO2, the plant will use membrane followed by amine technology. This process, according to Mobil, is similar in design but larger than proved by Union Oil Company of California's Dollarhide CO2 project. Membrane technology was also initially used by Chevron U.S.A. Production Co. in its Sacroc CO2 project. For the field, fiber glass tubulars are a possibility, but for now, Mobil plans to use internally plastic coated tubulars, stainless steel for wellheads and valves exposed to CO2, and CO2 lines of bare carbon steel, externally plastic coated.

Pressure in the Estes pipeline will be 1,400-2,200 psi, and Mobil expects an injection pressure of 2,800 psi. Reservoir miscibility pressure is 1,800 psi.

Mobil plans a 2:1 water alternating gas (WAG) injection, but because of heterogeneities, Mobil believes the ratio likely will be adjusted for individual patterns.

OTHER ESTES PROJECTS

Completion of the Estes pipeline also will permit CO2 projects to start in Oxy USA Inc.'s South Welch Unit, and Conoco Inc.'s East and South Huntley fields. The start of CO2 injection in Amoco Production Co.'s Cedar Lake field, southwest of Welch field, is planned for 1995.

All of those projects are in Permian San Andres carbonates.

Oxy forecasts recovery of about 9 million bbl of additional oil with CO2 in South Welch field, Dawson County, Tex. It plans to start injection in about 24 wells and use a 1:1 WAG. Previously in the South Welch Unit, a CO2 pilot using trucked in CO2 was completed in the mid-1980s. Oxy is constructing a gas processing plant in Welch, aiming for a CO2 injection rate of about 25 MMcfd by early 1994.

Conoco's two projects are in Garza County, Tex. East and South Huntley are about 3 miles apart and about 3 miles from the Estes pipeline.

Both are relatively small projects. East Huntley is about 700 acres, and South Huntley covers about 400 acres. In the two fields, the San Andres formation is at about 3,100 ft.

Estimated cost of the projects is $2 million during the first year and $6.5 million total.

INDEPENDENTS

Two independent producers with pending CO2 projects are Orla Petco Inc. in East Ford field in Reeves County, Tex., and Union Royalty Inc. in El Mar field in Lea County, N.M., and Loving County, Tex. Union Royalty purchased the El Mar (Delaware) Unit from Texaco and others about 5 years ago. The unit is a mature waterflood producing about 140 b/d of oil. Union Royalty estimates CO2 will increase production to 2,000 b/d. About 150 wells are involved in the project, and Union Royalty expects injection to start in first quarter 1994. It will inject a CO2 slug to fill a certain portion of the reservoir volume, then follow with water. In an innovative contract, Amoco will provide CO2 in exchange for an interest in produced oil from El Mar. The CO2 will be supplied though a 40 mile, 6 in. lateral from Dollarhide to El Mar that Enron Liquids Pipeline Co. will build. Orla Petco has not secured a CO2 source but hopes to start injection in 1994. Its East Ford project is within 4 miles of a CO2 pipeline. East Ford produces from the Ramsey sand the same as the nearby Ford Geraldine Unit and Two Freds CO2 projects.

Orla Petco's project includes about 45 wells on 20-40 acre spacing.

MCELROY FIELD

In December 1992, Chevron started CO2 injection in a McElroy field pilot project. Three 20 acre, five spot patterns include 10 injection and 25 producing wells. Chevron has started WAGs in some wells and is injecting about 3.8-4 MMcfd of CO2. Product Operating Inc. is supplying the CO2 from southern gas planes through the Texas Tentrain joint Venture Pipeline, a spur of the Canyon Reef Carriers Pipeline. The pilot project is scheduled to last 3-5 years, but Chevron expects to know within 1-1 1/2 years whether to expand McElroy CO2, injection.

Chevron forecasts a response that does not increase production but only flattens and slows the decline.

EXPANSIONS

Expansion of Shell Western E&P Inc.'s Denver Unit in Wasson field of Yoakum County, Tex., was finished in 1992. CO2 injection was extended to the western part of the field, including beneath downtown Denver City.

Shell expects the expansion to increase its production to more than 16,000 net b/d by 1996 from 7,000 b/d in 1992. Shell has a 39% working interest in the unit.

Shell also increased the gas inlet capacity of the Denver Unit carbon dioxide recovery plant to 290 MMcfd from 180 MMcfd.

In early 1994, Shell expects to start CO2 injection in the transition zone below the oil column in North Cross field, Crane County, Tex. The existing CO2 flood in North Cross is producing 1,500 b/d from 27 wells. CO2 injection is 23 MMcfd.

Shell estimates the expansion in the transition zone will recover another 3 million bbl of oil.

In South Cross field, Shell is evaluating a possible expansion in 1997 into the north portion of the field. The existing CO2 flood produces 1,200 b/d from 20 wells. CO2 injection is 30 MMcfd. Shell is continuing infill drilling to 10 acres in selected high-grade areas in South Wasson field, Gaines County, Tex. The present CO2 project produces 3,000 b/d from 100 wells. CO2 injection is about 22 MMcfd and the WAG ratio is 2:1. The CO2, injection may be extended into peripheral areas, currently under waterflood. Slaughter field in Hockley and Cochran counties, Tex., will see more CO2 development. In its operated unit, Texaco Inc. is set to start CO2 injection at the beginning of 1994 Gathering lines are being installed.

Texaco's development will be on "chicken wire" spacing - patterns of usually six injection wells surrounding a row of producers in the center. The number of injectors and producers may vary.

Texaco's unit is next to CO2 projects operated by Amoco and Mobil.

If the cost to repair the casing or liner in a well is too high, Texaco is prepared to drill dual lateral injection wells with 400-500 ft horizontal sections in each direction. Texaco has found that horizontal drilling costs are substantially less now than in prior years.

Texaco estimates the project cost at $80 million. The three phase development is scheduled during 6-7 years. Project economics were helped because Texaco will process the produced gas in Amoco's existing Slaughter gas plant.

Texaco forecasts oil production to peak slightly above the current 3,600 b/d.

Unocal's Dollarhide project is in Phases 4 and 5 of its development. The project was started in 1985 when the field produced 400 b/d. Current production is 2,700 b/d.

In Phases 4 and 5, CO2 injection will increase to about 30 MMcfd from the present 24 MMcfd. The expansion includes drilling 13 producing wells and converting nine wells to water injection. Although not an expansion, Marathon Oil Co. last May again started CO2 injection in Yates field of Pecos and Crockett counties, Tex. Unlike other projects in the Permian basin, the CO2 in Yates field is for maintaining reservoir pressure and not for miscibility with oil. Marathon decided to return to CO2 because CO2 prices have recently decreased, while natural gas prices have increased. CO2 supply comes from southern gas plants.

CHANGES IN OWNERSHIP

Late last year, Whiting Petroleum Co., Denver, purchased the CO2 project in Sable field, Yoakum County, from Fina Oil & Chemical Co. A few months earlier, Fina had bought the field from ARCO Oil & Gas Co. Whiting intends to continue CO2 injection. Sable is the first CO2 flood Whiting operates, but it does have interests in other CO2 floods. In one large purchase last year, Anadarko Petroleum Corp. acquired $190 million of properties from ARCO. The leases included a number of mature waterfloods that are likely candidates for CO2. At this time, Anadarko says it is still trying to determine how CO2 fits into its strategy. In another transaction toward the end of 1992, Pennzoil Exploration & Production Co. acquired the Sacroc CO2 project as part of a $1.3 billion stock trade with Chevron. The trade included leases in more than 300 fields as well as Chevron's share of Canyon Reef Carriers Pipeline. At the end of May, Pennzoil released the transition staff from Chevron that was working in Sacroc. For now, Pennzoil plans to continue Sacroc operations at a normal pace that includes six to eight workover rigs. Pennzoil said CO2 injection will continue because a production slide will occur if CO2 is Cut Off Sacroc obtains CO2 Mostly from Shell's Terrell gas plant. Pennzoil is evaluating many of the mature waterfloods obtained from Chevron for possible CO2 flooding. But because it still is staffing up, the CO2 flood potential has not yet been determined.

DEMONSTRATION PROJECTS

Foam to improve sweep efficiency is undergoing tests in the East Vacuum Grayburg/San Andres Unit of Lea County. The test, operated by Phillips Petroleum Co., is part of a 4 year project jointly funded by unit working interest owners, the U.S. Department of Energy and New Mexico. The pilot aims to show whether foam can reduce the mobility of injected CO2, reduce excessive CO2 production, improve volumetric sweep efficiency of injected CO2, and increase oil recovery.

The project is about 80% complete, and Phillips said results so far are encouraging.

Last April, DOE chose three Permian basin CO2 projects for shared government/industry and industry funding. The reservoirs fall into DOE classification as shallow shelf carbonate reservoirs. In the near term project chosen, Texaco will operate a test using a CO2 huff and puff process in a light oil, Grayburg/San Andres formation, in the Central Vacuum Unit, Lea County. Oxy's midterm project will evaluate the effectiveness of advanced reservoir characterization for CO2 flooding and CYCliC CO2 stimulation in reservoirs that are more heterogeneous and lower in quality than current CO2 projects. Oxy's project is in Welch field, Dawson County, Tex. The third project, also midterm, will be in the South Cowden Unit, Ector County, Tex. Phillips will operate the test to evaluate the economics of advanced reservoir characterization combined with horizontal CO2 injection wells. Although Phillips determined that the South Cowden Unit was an excellent prospect for a CO2 flood, the needed investment with vertical wells was uneconomical.

Details of the three similar demonstration projects are still being negotiated with DOE.

CO2 SUPPLY A long term supping of CO2 is readily available in the Permian basin. Besides large northern sources in New Mexico and Colorado, estimated at about 20 tcf, a number of gas plants in the Val Verde, Tex., area south of major injection projects also can supPly CO2-Tim Bradley, manager CO2 marketing and gas administration for Shell, estimates current capacity from northern sources at about 1.3 bcfd and demand at 1-1.1 bcfd. He believes capacity of the three pipelines from the north-Cortez, Sheep Mountain, and Bravo-can readily be increased to about 2 bcfd. Amoco has disclosed a $26.2 million program to increase CO2 production from Bravo Dome field in New Mexico. The additional development will boost its CO2 production capacity by about 80 MMcfd to 400 MMcfd (OGJ, May 3, p. 42). Russell Martin, senior business development representative of Enron Liquids Pipeline Co., has estimated gas reserves in the southern area are at about 400 bcf with a CO2 content of about 45%. Martin said about 100 MMcfd of CO2 is being produced and two thirds of that is being vented. Unlike northern sources, CO2 from the plants is less pure-95% instead of 98 + % CO2. Another problem is the 50-150 ppm H2S content that causes some handling concerns. Additional expenses are incurred to compress the CO2 Another potential CO2 source, Bradley said, is the San Juan basin of New Mexico. The source is near the Cortez pipeline, and Bradley estimates it could supply about 100 MMcfd. Shell wants innovative contracts with other operators. These could include joint development of CO2 supplies, trading CO2 for equity, and sharing gas processing capacity. Bradley believes the industry needs more projects such as Amoco's agreement with Union Royalty.