Energy Industry
Strategies for Success
A Deep Solution
Approximately 200,000 barrels of Texas oil are brought to the surface each day via CO2 injection. Most of that occurs in the Permian Basin. Denbury’s Green Pipeline will deliver CO2 to Texas’s Gulf Coast region as part of the first large-scale EOR project in that part of the state.
Geologists believe that as many as 7 billion barrels of EOR-recoverable oil may lie beneath the nation’s Gulf Coast, stretching from Texas to Mississippi. Denbury’s recovery project will boost the Texas economy in a variety of ways.
“Recovering oil that would not otherwise be produced generates revenue beneficial to the state in the form of incremental taxes,” says Bob Cornelius, Denbury’s senior vice president of operations. “It also provides additional revenue to mineral owners and boosts the local economies through job creation during the initial construction phase and for many years after during enhanced oil recovery operations.”
Enhanced Riches from CO2 Waste
New technology boosts efforts to recover oil, gas left behind
Technology and know-how are the tools of a new generation of oil extractors, and will bring jobs by the barrel to Texas’ oil fields.
Carbon dioxide, or CO2, is playing an increasing role in bringing crude oil to the surface. In enhanced oil recovery (EOR), the colorless, odorless gas is injected into the reservoir to bring up oil reserves left behind when traditional pumping methods run dry. Near Fort Stockton, construction has begun on the $800 million Century Plant, where CO2 will be separated from natural gas (methane), with the gas going into the local distribution grid and the CO2 returning to the field for oil recovery.
The joint venture between SandRidge Energy and Occidental Petroleum (Oxy) will be the largest such facility in North America, and should be operational in mid-2010. Four hundred jobs could be created during construction. Up to 40 permanent positions and hundreds of jobs in various service and maintenance roles are anticipated. Separating the CO2 from the methane will help increase Permian Basin oil production while being environmentally responsible, says Kevin White, senior vice president for SandRidge.
“Rather than release a useless gas into the atmosphere, it’s going to be shipped to Oxy,” White says. “Oxy has said it will allow them to produce 50,000 barrels more per day.”
Green to the Gulf Coast
The Permian Basin pulls most of the state’s daily EOR production, but Denbury Resources is getting the Gulf Coast region into the mix. Denbury’s 320-mile Green Pipeline will pump CO2 from Louisiana to Hastings Field, near Houston.
At full operation – expected in late 2010, the pipeline will have the capacity to move up to 800 million cubic feet of CO2 per day. Denbury’s EOR efforts should recover an additional 17 percent of oil in fields, and more in some cases.
Oil-related work in the area will increase.
“Hundreds of jobs will be created in the next three to five years in construction, drilling and reworking wells and other EOR operations,” says Laurie Burkes, Denbury’s investor relations manager. TR
