Enhanced Oil Recovery Market to ‘More than Triple by 2020’
Although enhanced oil recovery (EOR) currently accounts for merely 7.5 percent of total crude oil production inÂ North America, the market is expected to grow rapidly â€” fromÂ revenues ofÂ $20.10 billionÂ in 2014Â to an estimatedÂ $70.60 billionÂ in 2020 â€” as oil fields deplete and oil extraction becomes more complex, according to new analysis from Frost & Sullivan.
Use of carbon dioxide EOR (CO2 EOR) will be more widespread than chemical or thermal EOR as federal governments focus on carbon capture and sequestration. While chemical EOR has not shown significant growth due to long pay out times and a longer break-even point, using the right technique of injecting the chemical will help the method gain traction.
Economic stability plays a significant role in EOR deployment. When the economy is slow, the decreased demand for oil lowers oil prices and curbs the adoption of EOR. EOR is profitable only when oil prices stand atÂ $80Â per barrel or above, as the capital and operational costs of the projects are very high. Economics also influence the selection of the type of EOR employed. With governments turning their attention to carbon capture and storage, the number of CO2-EOR projects is expected double by 2020. By 2025, 50 percent of the oil produced in the US will be through EOR;Â 50 percent of that will be through CO2-EOR, Frost & Sullivan predicts.
A year ago, Visiongain analystsÂ calculatedÂ that spending in the CO2 EOR market totaled $5.3 billion at the start of 2014. This includes spending on geological studies connected to CO2 EOR, injection and production well drilling and reworking, pumping equipment, CO2 recycling facilities and CO2 distribution pipelines.
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