Over $100 Million Worth of Oil Being Discarded Every Day
Posted: 19 September 2005
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The global oil & gas industry is wasting 2.1 million barrels of oil with a current value exceeding $100 million every day. This is the key finding of a detailed study completed by energy industry analysts Douglas-Westwood and commissioned by the Norwegian-based produced water treatment specialist Epcon Offshore AS.
“People tend to think the main product of the oil industry is oil, whereas in reality this is dwarfed by the huge volumes of produced water – in the case of some oilfields water makes up more than 90% of production.” said Douglas-Westwood Managing Director John Westwood.
“In order to protect the environment, in many countries the removal of oil from produced water before discharge is required by law and severe penalties face those who exceed permitted levels. In the case of the entire North Sea , the present discharge levels average a tiny 21 parts per million (ppm). However, this is not the case in all countries and in some instances quite cavalier attitudes towards the environment still prevail.
“During our work for Epcon, we carried out extensive modelling of the volumes of water being produced worldwide and the likely levels of oil it contains. We were amazed to discover the quantities of oil that were being discarded – more than the UK’s total North Sea oil production – due to the inadequate recovery of oil from produced water. The remarkable thing is that the solution to the problem is available using off-the-shelf technology of the type marketed by our client Epcon.
“Development of the technology to clean produced water has to date been environmentally driven but our study shows major financial benefits would be achievable by several producer countries and at $60/bbl the return on investment for oil companies is excellent.
“Furthermore, as the oil & gas industry matures, the total amount of water extracted is rising. Assuming application of 30 ppm recovery standards worldwide, in 2005 the industry would gain nearly 2.1 million barrels of oil every day. By 2010 this figure will reach nearly 3 million barrels per day. At the eve of a possible peak in global oil supplies, proper cleaning of produced water could provide the world with substantial additional capacity – almost like discovering a new North Sea!”
Epcon Offshore AS president and CEO Arne Aune welcomed the results – “with our new Compact Flotation Unit (CFU) produced water cleaning system being adopted by more and more operators in several important oil provinces, this study shows the remarkable cost-benefit that can be achieved and provides a further driver for increased business for Epcon Offshore.”
“Enhanced recovery comes both from gains in oil recovered and prolonged life-of-field as our technology will also enable operators to handle an increased flow of produced water. In some countries, operators are reported to be shutting down wells at just 15 – 20 % water cut as they are unable to handle the large volumes of produced water.”
Posted by Editor Pipeline Magazine
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