S. Kuczynski, J. Hendel, A. Sikora
Wednesday 19 December 2018 by Libadmin2018


Evaluation of the profitability of investment projects in the oil industry have been the subject of numerous publications both international and Polish. Global primary energy consumption growth will undoubtedly cause difficulties in predicting changes of the price of crude oil and other energy sources. The strategy of reducing greenhouse gas emissions, which has being implemented in Europe, would also affect the economic viability of enhanced hydrocarbon recovery methods of injecting CO2 into the oil deposit (CO2-EOR CO2-Enhanced Oil Recovery). The paper discusses the cost-effectiveness of CO2-EOR, assuming that a coastal thermal power station and a refinery, which are producers of CO2, as well as Offshore Company which exploits hydrocarbons, are in one capital group. This integrated model includes the costs of CO2 separation from the thermal power station and refinery’s flue gas, the cost of transport, storage and monitoring and, finally, a profit of the capital group made from avoiding the purchase of CO2 emission permits. Profitability of such a project depends on many factors i.e. the costs of the following stages of CCS – data extracted from the literature, and difficult to predict future prices of oil and CO2 emission permits. The last two factors have been a subject of a detailed analysis. The article considers three scenarios of applied CO2-EOR technology (injection of 125 ktCO2/y, 250 ktCO2/y and CO2 water-alternating-gas injection). The cost-effectiveness of each scenario was analyzed for twelve different models of future prices of oil and CO2 emission permits. Net present value (NPV) is positive only for 13 among 324 analyzed scenarios. Discussed case study will be profitable only for extremely optimistic (high) oil prices, high CO2 emission permits, large CO2 injection rate and for expected discount rate not higher than 15%.

Keywords: CO2-EOR, methods of enhanced oil recovery, carbon dioxide sequestration (CCS), economic analysis

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