OUR NEW TRICKS FOR YOUR OLD RESERVOIRS Oil

OUR “NEW TRICKS” FOR YOUR “OLD RESERVOIRS” Oil Chem Technologies, Inc. Sugar Land, TX

Oil Recovery Overview BAVIER; BASIC CONCEPTS OF EOR PROCESSES(1991)

YOUR “OLD RESERVOIRS”

0 6 4 4 3 Oman India UK France Germany 3 0. 9 Romania Denmark Dubai 7 Norway 12 10 10 9 Brazil Canada Mexico Qatar 20 China Nigeria Libya 40 Russia Venezuela 60 Abu Dhabi 80 Kuwait 84 Iraq 100 Iran 120 USA 180 S. Arabia Billion Bbls CHEMICAL IOR TARGET IN SELECTED COUNTRIES 173 160 140 100 77 63 61 51 40 26 24 0. 6 0. 3 0. 2

REPORTED CHEMICAL IOR PROJECTS WORLDWIDE OGJ April 12, 2004

REPORTED CHEMICAL IOR PRODUCTION WORLDWIDE OGJ April 12, 2004

LOUDON FLOOD - EXXON 1983 2. 3% surfactant n 96% of the connate salinity n 0. 3% pore volume n 0. 1% Xanthan gum n 56 million pounds surfactant was injected in 9 months n 68% ROIP n

BIG MUDDY – CONOCO 1981 3% surfactant n 5% Isobutyl alcohol as cosurfactant n 0. 6% salt n 0. 22% polyacrylamide n 0. 1 pore volume n 15% ROIP n

ROBINSON – MARATHON 1983 10% surfactant – petroleum sulfonate n 0. 8% hexanol as co-surfactant n 2. 5% salt n No polymer n 0. 1 pore volume n 19 – 21% ROIP n

IOR BY CHEMICAL FLOOD Limited commercial success for the past two decades - Reasons? Sensitivity to oil price n Large up-front investment n Unpredictable return on investment n Availability of chemicals n Limitations of chemicals n Poor scaling from lab to field n

PAST PROBLEMS High surfactant concentration n Salinity optimization required n Optimum salinity shift in the formation n Potential emulsion block n Potential residual additive in the produced oil n Economical Feasibility n

however, Extensive lab evaluations support the feasibility of chemical flooding n Field data proves chemical flooding is an effective way to recover residual oil n New chemicals and processes open the door for new opportunities n

OUR “NEW TRICKS” FOR YOUR “OLD RESERVOIRS”

MECHANISM n Solubilization n Mobilization • Micellar • • • High surfactant concentration • Low surfactant concentration ASP LASP OASP Super Surfactant

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

AP vs SP

AP VS. SP Properties IFT, (m. N/m) Alkali Polymer (AP) Surfactant Polymer (SP) ~10 0 - 10 – 1 10 -2 Potential Alkali reaction in formation 2 Na. OH + Ca+2 2 Na+ + Ca (OH)2 Effect on Polymer will effect the polymer viscosity None 2 Na. OH + Mg+2 2 Na++ Mg(OH)2 No effect Water Treatment Yes No Chemical Cost / bbl * ~ $1. 0 - $1. 36 /bbl ~ $0. 64 /bbl Potential corrosion /scale problems Yes No * The price is based on 0. 1% surfactant and polymer, 1. 0% Na. OH

RELATIONSHIP BETWEEN CAPILLARY NUMBER AND OIL RECOVERY Nc = µ / Nc = Capillary Number = Darcy Velocity µ = Viscosity = Interfacial Tension Chatzis and Morrow, SPEJ, (1994) 561.

AP vs. SP Using Surfactant

AP vs. SP AP: 0. 1% polymer / 1. 0% Na. OH SP: 0. 1% surf. / 0. 1% polymer AP SP $1. 22 $0. 61 $$$ 0 Equipment Corrosion $$$ 0 Scale Formation $$$ 0 Chemical Cosr, $ / bbl Polymer Increase Due to Na. OH

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

ASP SURFACTANTS ORS & ORS-HF SERIES

ADVANTAGES § Field Proven § Consistent quality § Low concentration required § One component system § Low viscosity

SHO-VEL-TUM FIELD n n n On production > 40 yrs, extensive water flood, produced 4 bbl/day ASP started on 2/98, using Na 2 CO 3 and ORS 62 Total incremental oil > 10, 444 bbl in 1. 3 years SPE 84904

OIL SATURATION AFTER ASP INJECTION SPE 84904

ORS-46 HF ORS-62 HF(2) ORS-41 HF ORS-97 SS-7593 ORS-62 SS-B 6688 ORS-57 HF ORS-41 HF INJECTED, ON-GOING & APPROVED PROJECTS

SELECTED REFERENCES USING ORS SURFACTANTS § SPE 100004, 84904, 84075, 71491, 57288, 49018, 36748 § Hart’s Petroleum Engineering International, Dec. 1998. § DOE/PC/910087 -0328 (OSTI ID: 3994)

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

LOW ALKALI SURFACTANT POLYMER FLOOD (LASP)

ASP - POTENTIAL PROBLEMS? After extensive ASP flood in China, results were successful, however: Alkali causes corrosion of the equipment n Scale forms in the formation n Produced wells plugged and require fracturing treatment to produce oil again n Alkali is detrimental to polymer viscosity n Extra polymer, Na. OH and maintenance costs n SPE 71492, 71061

ASP n n n n LASP Combines the advantages of ASP and SP Use 0. 1 – 0. 6% alkali Reduces surfactant adsorption Reduces polymer degradation Reduce the maintenance cost Reduce the scale formation Reduces the total cost of the treatment

ASP vs. LASP Common ASP: 0. 1% surf. / 1. 0% Na. OH Common LASP: 0. 1% surf. / 0. 2% Na. OH ASP LASP $1. 22 $0. 79 Polymer Cost Due to Na. OH $$$ $ Equipment Corrosion $$$ $ Scale Formation $$$ $ AS, $ / bbl

LASP - IFT vs. % Na. OH 0. 1% ORS-62 HF, TDS ~ 3, 500 ppm, API Gravity ~ 40, Temp ~ 40 C,

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

ORGANIC ALKALI SURFACTANT POLYMER FLOOD (OASP) SPE 99581

COMPATIBILITY WITH HARD WATER Na 2 CO 3 + Ca ++ Ca. CO 3 Na 2 CO 3 + Mg ++ Mg. CO 3 Na. OH + Ca ++ Ca. CO 3 Na. OH + Mg ++ Mg. CO 3

BRINE COMPATIBILITY

ASP INJECTION SITE DIAGRAM Produced Water Treatment Alkali Surfactant Injection Well Polymer

OASP INJECTION SITE DIAGRAM Produced Water Organic Alkali Surfactant Injection Well Polymer

OASP INJECTION SITE DIAGRAM Produced Water Treatment Alkali Surfactant Injection Well Polymer

ECONOMIC COMPARSION

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

SUPER SURFACTANTS SS Series

ADVANTAGES § Super Effective • Ultra-Low concentration required (0. 02% - 0. 2%) • Provides ultra-low IFT § Super Convenient • • No alkali is required No water treatment is required

ADVANTAGES - Continued § Super Tolerant • High TDS brine • High divalent cations • High temperatures

ADVANTAGES - Continued § Super Savings • • Surfactant Alkali Polymer Water treatment Sludge disposal Surface equipment Potential scale formation Equipment maintenance

SS IN HIGH SALINITY BRINE TDS ~190, 000 ppm, Ca, Mg ~ 95, 000 ppm Temp. ~ 50 C, API Gravity ~ 35

SS IN HIGH TEMP. HEAVY CRUDE TDS ~ 250 PPM, TEMP. ~ 100 C, API GRAVITY ~15

SELECTED REFERENCES USING SS SURFACTANTS n SPE 75186 – SPE IOR Meeting, April, 2002 n SPE 80237 – SPE Oil Field Chemistry Meeting, Feb. , 2003

ON-GOING LAB EVALUATION STAGE PROJECTS

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

SMART SURFACTANT n n n n One component system Provides low IFT and proper viscosity Salt and divalent cation tolerant No water treatment required No polymer required No dissolving or hydration unit required Minimal up-front investment Minimal risk factor US Patent Pending

WATER FLOOD Injector Producer

SURFACTANT FLOOD

SURFACTANT FLOOD Injector Producer

SMART SURFACTANT

SMART SURFACTANT Injector Producer

SMART SURFACTANT™ Injector Producer

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

FLOW IMPROVER Creating a low viscosity pseudoemulsion that is easily transported through the pipeline.

PRESENTATION OUTLINE n Why Do We Need Surfactant • AP vs. SP n Our New Tricks – For Your Old Reservoirs • • • n ASP LASP OASP Super Surfactant Smart Surfactant Flow Improver Start Your IOR Projects

Reservoir Analysis · Reservoir Characterization · History Matching –reservoir model, production history IOR Feasibility · Prescreening · Lab Studies · Simulations Pilot Test · Pilot design · Monitoring operations · Result Interpretation Field Operation · Spacing pattern · Well completion · Surface Equipment · Injection Fluid design IOR Project Summary · Economical analysis · Decision on other projects · Comparison of different Scenarios

HOW TO PLAN A FLOOD n n n n Choose a process likely to succeed in a candidate reservoir Determine the reasons for success or failure of past projects using the process Carry out lab studies. Optimize the chemicals/processes Determine process mechanisms Field pilot test Establish chemical supply Financial incentives essential

SURFACTANT SCREENING Oil Company IOR Surfactants Specialty Company Testing Lab or Oil Company in-house lab

OIL COMPANY Geology and mineralogy n Well history n Field based research n Environmental restrictions n Financial incentives essential n Choose a process likely to succeed in a candidate reservoir n Determine process mechanisms n

IOR SURFACTANT SPECIALTY COMPANY State of the art surfactant technology n Chemical implementation details n • • • Surfactant customization Surfactant properties Surfactant compatibilities Surfactant optimization Raw material availability and economics Potential surfactant localization for enlarged field flood

IOR SURFACTANT SPECIALTY COMPANY (Cont’d) n IOR process optimization • • Alkaline Polymer ASP LASP OASP SP CO 2 Etc.

IOR SURFACTANT SPECIALTY COMPANY (Cont’d) n Continue working with oil company and testing company to further optimize the surfactant /process based on their data.

OPTIMIZATION OF SURFACTANT IFT, m. N/m Sho-Vel-Tum Field, 30 o. C Na 2 CO 3, %

TESTING LAB OR OIL COMPANY IN-HOUSE LAB Product and process evaluation n Other additive evaluation n Core flood n Injection sequence design n Simulation n Work with the oil company and IOR surfactant specialty company to further optimize the injection design n

ENLARGED FIELD FLOOD n Raw material supply • Source • Availability n Manufacturing Location • Shipping, tax, etc. • Improve local economy § Capital investment • Up-front investment • Operational cost n Flexibility of the plant

CONCLUSIONS n Two trillion bbl of oil remain in depleted or abandoned wells n Chemical floods offer the only chance in many depleted and water flooded reservoirs n Chemical IOR must be re-evaluated based on current technical and economic conditions

CONCLUSIONS – CONT’D n Chemical flooding can maximize the reserves in known reservoirs n Improved processes and chemicals are available n Better scaling and modeling has been developed

START PLANNING ON YOUR CHEMICAL IOR PROJECTS TODAY!!

COMPLIMENTARY SURFACTANT EVALUATION n You send: • Oil and injection brine samples • Brief field history • Reservoir properties

COMPLIMENTARY SURFACTANT EVALUATION n We will: • Perform initial Surfactant screening • Send you the sample for your detailed evaluation and injection design or submission to an independent testing lab • Further optimize the surfactant based on your result

THANK YOU ! Oil Chem Technologies, Inc. 12822 Park One Drive Sugar Land, TX 77478 281 -240 -0161 www. oil-chem. com