An Old Player Receives New Lease on LifeJanuary 19, 2011
A historic oil field south of Houston, seemingly on its last leg after more than 80 years in service, is making a comeback.
A North Texas company has launched a sweeping project to tap potentially huge oil reserves still left in the ground at the famed Hastings field, located between Alvin and Pearland.
The project aims to free stranded oil by injecting carbon dioxide into the once-prolific reservoir in a process used since the 1970s in West Texas to coax more crude from aging fields.
It is made possible by a new $1 billion pipeline that carries the gas from south Louisiana to Hastings, and that eventually could help revive a number of dormant fields along the Gulf Coast.
Using conventional extraction methods, oil companies typically recover about a third of the oil in a reservoir. When carbon dioxide is injected into a well, however, it mixes with trapped oil and creates a new fluid that is less viscous and flows out more easily. Recovery rates can rise to 60 percent.
Plano-based Denbury Resources still has months of work to do before the project begins producing oil.
That work includes building new infrastructure and pulling up decades’ worth of oil field detritus.
And it includes winning over residents, not all of them excited about the prospect of yet another new oil development at Hastings.
“There’s a lot of scars on the acreage over the years,” said Marty Toombs, operations engineer for Denbury, during a recent tour of the field.
The Hastings project arrives as rising crude prices are providing fresh incentive for oil companies to pursue more costly or experimental projects that otherwise might not be feasible.
It also highlights the potential of enhanced oil recovery techniques, both to boost U.S. oil supplies and to dispose of large quantities of carbon dioxide, a heat-trapping gas linked to climate change.
The techniques could produce 85 billion additional barrels of oil in U.S. oil fields, with more than half of that profitable to extract at crude prices above $70 a barrel, according to a study early last year by Advanced Resources International.
Output could be even higher if regulators created incentives to capture carbon dioxide from industrial sources like power plants and steer it to oil production, the group said.
In Texas, one of the top oil-producing states, carbon dioxide-enhanced oil recovery projects already account for more than 15 percent of the average annual oil production, though most is from mature fields in West Texas’ Permian Basin, according to the University of Texas’ Bureau of Economic Geology.
Outside the Permian Basin, more than 5.7 billion additional barrels of oil could be produced statewide using the technology, the bureau estimates.
Susan Hovorka, a senior research scientist at the bureau, said it’s impossible to estimate the cost of going after those barrels, given variables like drilling expenses, cost of carbon dioxide and other factors. But with oil now trading around $90 a barrel, she said, investors are interested.
To this point, the biggest obstacle in redeveloping Gulf Coast fields like Hastings has been lack of a readily available source of carbon dioxide.
Denbury’s 320-mile Green Pipeline changes that. It transports carbon dioxide, mined in Mississippi, from Donaldsonville, La., to the Hastings field. Ultimately, Denbury hopes it also will carry carbon dioxide collected from Gulf Coast refiners, chemical plants and other industrial facilities — and be extended to other fields, including the much larger Conroe oil field in Montgomery County.
The Hastings field was discovered in 1934 by Stanolind Oil and Gas Co. and has produced about 600 million barrels of oil from 600 wells over its life. After hitting peak production of 75,000 barrels per day in the mid-1970s, it now yields just 1,000 barrels a day, according to Denbury, which took over the western portion of the field in early 2009.
Toombs, the operations engineer, said Denbury has been able to boost output at similar fields up to eightfold by injecting carbon dioxide.
He declined to share forecasts for Hastings but noted, “Denbury did not purchase this property to operate it as is.”
The firm, which started carbon dioxide injections in four wells at Hastings last month, expects to start producing oil late this year.This entry was posted in Oil & Gas. Bookmark the permalink. ← Offshore Industry Health & Safety Representatives Course (Australia) →