Oil Production, Usage, And Export In NZ | Enhanced Oil Recovery Projects | Hydraulic Fracturing | Thunder Horse Oil Field Calculation | Monte Carlo Analysis

Oil Production, Usage, and Export in NZ since 1980

1. The amount of oil that has to be NZ since 1980 is as shown in the figure below (Vladimir Alvarado, 2011, p. 158) 

The ratio between NZ production and the usage in the country every year is as shown in the figure below (Affairs, 2015, p. 256).

The export of oil annually in NZ is as shown in the graph below (E.C. Donaldson, 2002, p. 175).

Gas injection

Miscible flooding involves the introduction of gasses that are miscible in the reservoir. The process of miscible displacement is involved in the maintaining the pressure of the reservoir and also in improvement of the oil displaced due to the reduction of the oil and water interface of the surface. In this step, the interface between the liquids interfaced is removed so as to allow for total efficiency of displacement. The gasses that are used in this process include Carbon (VI) oxide, nitrogen, and natural gas. The fluid that is most commonly used for miscible displacement is CO₂ due to its ability to reduce the viscosity of the oil and also because it is cheaper than petroleum gas. The displacement of oil by injection of CO₂ relies on the behavior of the phase of the mixtures. This technique can lead to improvement of oil by 48% of the total production (Institute, 2016, p. 215).

Thermal Injection

In this process, there are various methods that can be used in the heating of the crude oil so as to reduce the mobility of the oil. When the heat is increased, the surface tension will be reduced the tension of the surface so as the permeability to be possible. The oil that has been heated may undergo the process of vaporization and then condense hence forming improved oil. This method improves the efficiency of the sweep and also the efficiency of displacement. This technique can lead to improvement of oil by 50% of the total production (John C. Dernbach and James R. May, 2016, p. 136).

The hydraulic fracturing involves the production of fractures in the formation of the rock so as to stimulate the flow of natural gas, and hence improving the volumes of oil that can be recovered. Wells are drilled thousands of feet below the surface in horizontal or vertical direction. Fractures can be created by pumping a large amount of fluids at a massive pressure down the well and into the foundation of the rock targeted. The fluids used in hydraulic fracturing include proppant, chemical additives, and water (Logan, 2001, p. 247). The fluids enlarge and open the fractures within the foundation of the rock. The proppant can be in the form of sand, incompressible particles, and ceramic pellets. The internal pressure of the rock will cause the fluid to return to the ground surface; this is known as the flow-back. The flow-back fluid can sometimes contain chemicals that have been injected such as hydrocarbons, radionuclides, and brines. The flow-back fluids can be stored in the tanks before they are treated and disposal (Morgan, 2014, p. 296).

Enhanced Oil Recovery Projects

Environmental protection issues that should be addressed in Shale Gas Development

Atmospheric Emissions: Air emissions from shale gas operations happen at the drilling site during fracturing at compressors of natural gas. The atmospheric emissions include dust, fine particles, methane, and diesel fumes. The research has shown that the gas emissions in shale gas are related to Volatile Organic Carbon compounds (VOC) which are rich in benzene, ethylene, and xylene. The compounds above have a negative effect on the ozone in the presence of sunlight. The emission of methane gasses has raised a concern to the public due to the change in the climate globally since this gas is a strong greenhouse gas (Ramirez, 2013, p. 175).

Health Effects: There are several chemicals and gases released by the operations of the shale gas development which may have a negative effect on the health of human. The main chemicals and gases that are hazardous to health are organic carbons and benzene.

Water Requirements and supply: Water is one of the main requirements in shale gas development especially during hydraulic fracturing. The fracturing and drilling of oil will require water supply for testing natural gas, gas processing, drilling mud, and extraction of proppant. The water requirement in the various processes is too much than the water that is supplied by the environment (Staff, 2011, p. 188).

Blowouts and House Explosions: Blowout is an uncontrolled release of fluids that happen during drilling of gas. This is caused by an unexpected pressure increase in the underground due to the failure of the mechanical devices. House explosion are chemical contaminants that affect the water sources and hence pollute the environment (Vladimir Alvarado, 2011, p. 214).

Other environmental issues include visual amenity, noise, waste management, and chemical substances.

Failure of hydraulic fracturing operations

The poor cementing quality and incomplete cementing has led to fractures and hence providing a way to contamination of the ground water. The incomplete cementation has caused serious failure of the shear and cracks along the vertical walls. When the hydraulic pressure due to fracturing is high, there will be the shear failures that will results to cracks. High-quality cement is necessary for the prevention of cracking along the vertical walls (William E. Hefley, 2014, p. 178).

• High efficiency and reduction of emission of CO₂
• Improvement of materials for Ultra Supercritical plants
• Improvement of capture equipment and sorbents
• Reduction of energy of capture

Disadvantages of Carbon dioxide sequestration projects

• High capital cost
• Additional CO2 purification is necessary
• There is energy loss
• It is impossible to develop sub-scale technology of oxy-combustion
• There is no regulatory or geological compromise (Ramirez, 2013, p. 214).

Example of two sequestration projects operating currently

a) The Industrial Carbon Capture in Illinois: This project involves the capture and storage of carbon dioxide at a capacity of 1Mtpa. The project was started in 2017 April, and since then it has become the first large-scale CCS bio-energy project. Carbon dioxide is injected deep into the formation of saline at a given scale level.

Hydraulic Fracturing

b) The Kemper Energy Facility in Mississippi: This project involves capturing Carbon dioxide at a capacity of 3Mtpa and the project started operating 2017. In this project, there is gasification of coal which is involved in the capturing of CO₂ (John C. Dernbach and James R. May, 2016).

Crude oil is referred to as sweet due to the fact that the content of the oil has a low sulfur level which provides a taste that is sweet and a smell that is pleasant.

Why crude oil is considered comparable to Brent Crude.

Crude oil is considered comparable to Brent Crude because both of them are considered to as light and sweet grade of crude oil.

The age of rocks during formation.

The age of the rocks was found to be as old as 4.28 billion years as discovered by the researchers in 1967 (Ramirez, 2013).

The Thunder Horse was drilled at a depth of 25, 770 meters in the first drilling and then followed by the second well which was 2.4km; with a depth of 29, 000 feet. The most recent drilling of th Thunder Horse was North part which is 26000 feet in depth.

The original oil in place = 7.758*Area*Thickness*Porosity*Oil Saturation /Formation factor

The original oil in place = 1 billion barrels = 158987300m³

Saturation/Formation Factor = 1.2

Porosity = 25% = 0.25

Thickness = 592 feet = 180.489m

Area = (158987300)/ 0.25*1.2*180.489*7.758

         = 454349.322m

7. a) The company cannot set up a recovery reservoir for oil with capacity of 10 million barrels. This is because the area of the Thunder Horse is only 454349.322m which cannot accommodate the capacity of 10 million barrels of oil.

b) Yes, the company will proceed with the strategy involving the wells of water injection. This is because the company makes a profit of 15 dollars per barrel: the net profit will be 15 billion dollars which when compared with the extra cost of water injection that is only 30 million dollars is quite low and affordable.

When the histogram of Recovery Factor against the frequency was plotted by the use of excel, the above graph was realized with the following parameters noted:

The means of the plant = 29.94

The standard Deviation = 21.14

References

Affairs, N. Z. (2015). New Zealand International Review, Volume 30. New Zealand: New Zealand Institute of International Affairs.

E.C. Donaldson, G. C. (2002). Enhanced Oil Recovery, II: Processes and Operations. U.S.A: Elsevier.

Institute, I. M. (2016). Internationalization of the RMB: Establishment and Development of RMB Offshore Markets. London: Routledge, 2016.

John C. Dernbach and James R. May, J. R. (2016). Shale Gas and the Future of Energy: Law and Policy for Sustainability. London: Edward Elgar Publishing, 2016.

Logan, T. J. (2001). Economics of Carbon Sequestration in Forestry. New Zealand: CRC Press.

Morgan, M. G. (2014). Carbon Capture and Sequestration: Removing the Legal and Regulatory Barriers. Michigan: Routledge.

Ramirez, W. F. (2013). Application of Optimal Control Theory to Enhanced Oil Recovery. Paris: Elsevier.

Staff, P. M. (2011). The Statesman’s Yearbook 2012: The Politics, Cultures and Economies of the World. Michigan: Springer, 2011.

Vladimir Alvarado, E. M. (2011). Enhanced Oil Recovery: Field Planning and Development Strategies. Michigan: Gulf Professional Publishing.

William E. Hefley, Y. W. (2014). Economics of Unconventional Shale Gas Development: Case Studies and Impacts. California: Springer, 2014.