Oxy Elk Hills CO2 EOR Project Occidental of Elk Hills, Inc.

CCS Public Workshop

CSU Campus, Bakersfield

October 1, 2010

William Barrett

Benefits of CO2 EOR Project

• Jobs

• Low-carbon electricity

• GHG emissions reduction

• Extend life of mature oil field

• Less dependence on foreign oil

• Tax revenue

Principles and Practice of Using CO2 for EOR

(17)

8 Projects

13,000 Gross Bbls/d

Operators: Merit/Chaparral/Whiting

CO2 Source: Manufacturing

8 Projects

13,000 Gross Bbls/d

Operators: Merit/Chaparral/Whiting

CO2 Source: Manufacturing

Mid-Continent

17 Projects

42,000 Gross Bbls/d

Operators: Denbury

CO2 Source: Natural

Eastern Gulf Coast

20 Projects

39,500 Gross Bbls/d

Operators: Exxon/Anadarko/Merit

CO2 Source: Natural/Manufacturing

Rockies

69 Projects

187,000 Gross Bbls/d

Operators: Various

CO2 Source: Natural

Permian Basin

(17)

8 Projects

13,000 Gross Bbls/d

Operators: Merit/Chaparral/Whiting

CO2 Source: Manufacturing

8 Projects

13,000 Gross Bbls/d

Operators: Merit/Chaparral/Whiting

CO2 Source: Manufacturing

Mid-Continent

17 Projects

42,000 Gross Bbls/d

Operators: Denbury

CO2 Source: Natural

Eastern Gulf Coast

20 Projects

39,500 Gross Bbls/d

Operators: Exxon/Anadarko/Merit

CO2 Source: Natural/Manufacturing

Rockies

69 Projects

187,000 Gross Bbls/d

Operators: Various

CO2 Source: Natural

Permian Basin

0

20

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60

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100

120

1972

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1986

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1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

US

EO

R P

rooj

ects CO2 EOR is a

Time Proven Process

Note: Based on data obtained from the 2010 O&G Journal bi-annual EOR Survey

Company Wide• Experience

• # Active CO2 EOR projects

• CO2 Injected

Proposed Elk Hills CO2 EOR Project• Elk Hills CO2 EOR Project initial injection

• Anticipated start date

Oxy is a Worldwide Leader in CO2 EOR

38 years

25 projects

37 million tonnes/yr

(½ new, ½ recycle)

2 million tonnes/yr

2016

US CO2 Injection is ~ 92 million tonnes/yr*

*Source: S. Melzer

What is the CO2 EOR Process?

DriveWater CO2 Water CO2

MiscibleZone

OilBank

AdditionalOil

Recovery

How Does Carbon Dioxide Storage in Oil Bearing Formations Actually Work?

P

Ground Surface

Injection Pressure

Annulus Pressure P

Inflow

Tubing

Annulus

Injection ZonePacker

Confining Zone

Fresh Water

Grout

Wellhead

Both images show a slice of rock that has been magnified 100 times and treated with blue dye to show the pore spaces. The image on the left is sandstone, a good storage reservoir. The image on the right is a shale, which forms a good cap rock or seal.

Storage Reservoir Cap Rock

• Porosity is the amount of space between grains of rock; permeability is the connectedness of the pore spaces.

• A good storage reservoir has a lot of porosity and permeability which are combined in a term called “injectivity”

• A good cap rock has low porosity and permeability and acts as a barrier to prevent carbon dioxide from rising to the surface

Injection Well Design and Protective Mechanisms

Typical Injection Well

Source: Battelle

Elk Hills Oil Field – Stevens Reservoirs

0 2 MilesN

NWSNWS

31S31S29R29R

ELK HILLS OIL FIELDLOCATION OF THREE DEEP STEVENS STRUCTURES

CO2 From HECA Low-Carbon Power Plant

HECA site close to:

• Elk Hills Oil Field - CO2 EOR and geologic storage

• Adequate non-potable water supply

• Electric transmission system

Elk Hills Oil Field

HECA

CO2 EOR Will Be Implemented in Phases

31S & NWS Stevens Reservoirs contain:

• 640 active producing wells, 185 active injection wells

• Over 7.5 billion Bbls reservoir pore volume

• 20 yrs CO2 off-take from HECA will require less than 1 billion Bbls reservoir pore volume

CO2 EOR Project:

~ 250 Injection Wells/ Patterns

~ 250 New Wells

~ 107 MMCF/d CO2 Injection

Additional EOR AreaPrimary EOR Areas

NWS

31S

29R

CO2 EOR Project Initial Phase:

~ 38 Injection Wells/ Patterns

~ 56 Producers

~ 107 MMCF/d CO2 Injection

Stevens Reservoirs

• Lithology sandstone• Porosity 11-26%• Permeability 10-250 md• Max Pay 450 feet• Depth 5,500-8,000 feet• CO2 EOR Area ~5,500 acres• Oil Gravity 32-35º API

UBB1 Structure; CI = 250 ft

356A-31S

358X-33S

356-34S

387X-34S

387-32S

336X-32S

355C-35S

UBB1 Structure; CI = 250 ft

356A-31S

358X-33S

356-34S

387X-34S

387-32S

336X-32S

355C-35S

Stratigraphic Cross Section

31S Structure

Stev

ens

Res

ervo

irs

Using CO2 to Contact Stevens Reservoirs

Reef Ridge Shale Planned 20-year Volume of CO2

Stevens Reservoirs

Free Water LevelFree Water Level

Reef Ridge Shale Planned 20-year Volume of CO2

Stevens Reservoirs

Free Water LevelFree Water Level

Reef Ridge Shale Planned 20-year Volume of CO2

Stevens Reservoirs

Free Water LevelFree Water Level

Injection and Production Facilities

Central Tank Battery

Reinjection Compression Facility

CO2 Recovery Plant

31S Structure

NWS Structure

CO2 Supply PipelinesPhase 1 CO2 EOR Areas

Process Flow Diagram

Oil & Water

13 WAG Manifolds Water

InjectionFacility

13 Production / Well-testing

Satellites (20-30 wells each)

WaterTreatment

Oil / WaterSeparation

Inlet Gas Separator

Oil &Water

Water

Water Water

CO2CO2 WaterDriveWater

MiscibleZone

Additional Oil

Recovery

Oil Bank

HECA

NWS Low Pressure Injection

Facility (A1/A2)

ReinjectionCompressionFacility (RCF)

CO2Removal

Plant (CRP)

CO2Facility

Production Wells

Injection Wells

AlternatingCO2 &Water

O

M

Oil to SalesM

NGL to SalesM

N2 to ESOZM

HC Gas to SalesM

O

O

O

O

O

HC Gas + CO2

High Purity CO2

Nitrogen

High Purity CO2

HC Gas

NGL Recovery

CO2 + HC Gas

CO2

CO2

Oil

O

O OExcess Water Makeup Water

OO

Well Fluid

M OCustody Transfer Meter & CO2 Analyzer / Sampler Operations Meter for Total CO2, HC Gas, Water, Oil

Test Meter

AggregateProductionMeter

Oil & Water

13 WAG Manifolds Water

InjectionFacility

13 Production / Well-testing

Satellites (20-30 wells each)

WaterTreatment

Oil / WaterSeparation

Inlet Gas Separator

Oil &Water

Water

Water Water

CO2CO2 WaterDriveWater

MiscibleZone

Additional Oil

Recovery

Oil Bank

HECA

NWS Low Pressure Injection

Facility (A1/A2)

ReinjectionCompressionFacility (RCF)

CO2Removal

Plant (CRP)

CO2Facility

Production Wells

Injection Wells

AlternatingCO2 &Water

O

M

Oil to SalesM Oil to SalesM

NGL to SalesM NGL to SalesM

N2 to ESOZM N2 to ESOZM

HC Gas to SalesM HC Gas to SalesM

O

O

O

O

O

HC Gas + CO2

High Purity CO2

Nitrogen

High Purity CO2

HC Gas

NGL Recovery

CO2 + HC Gas

CO2

CO2

Oil

O

O OExcess Water Makeup Water

OO

Well Fluid

M OCustody Transfer Meter & CO2 Analyzer / Sampler Operations Meter for Total CO2, HC Gas, Water, Oil

Test Meter

AggregateProductionMeter

CO2 EOR vs. Saline Aquifer Injection

Sequestration through EOR• Secure reservoir / natural trap

• Many injectors and producers

• Mass balance

• CO2 saturated reservoir: 30% to 50% trapped each cycle

• CO2 valuable injectant commodity

• Class II UIC Permit

Saline Aquifer Sequestration• CO2 fate less certain – pore space

ownership issues, CO2 tracking

• Injection wells

• Zone of high pressure

• CO2 plume

• CO2 is disposed

• Class VI UIC Permit

Role of MRV Plan

• Identify and assess risk of potential leakage of CO2 to surface

• Monitor behavior of injected CO2

• Determine volume of CO2 sequestered

• Establish reporting framework

• Define site closure and post-closure monitoring

How Much CO2 is Sequestered?

Material Mass Balance Equation:

CO2 transferred to OEHI for EOR- CO2 measured in products moved offsite- CO2 emitted through leakage (if any) - Incidental and operational losses of CO2

= CO2 Sequestered

Benefits of CO2 EOR Project

• Jobs

• Low-carbon electricity

• GHG emissions reduction

• Extend life of mature oil field

• Less dependence on foreign oil

• Tax revenue

Oxy Elk Hills CO2 EOR Project