A Novel Approach to Steam Flooding Economic Analysis

DOI: 10.14800/IOGR.1323

Abstract

The development of heavy oil reservoirs, particularly in regions such as the Niger Delta, offers substantial potential for increasing hydrocarbon recovery but also poses notable technical and economic challenges for the petroleum industry. Steam flooding has emerged as a prominent technique due to its ability to significantly reduce heavy oil viscosity, thereby enhancing its mobility and facilitating flow toward production wells. However, the economic viability of such operations remains a decisive factor in evaluating their feasibility and large-scale application.

In this study, we present a novel approach to the economic analysis of a locally designed steam flood system, aimed at enhancing heavy oil recovery in the Niger Delta region. Our analysis centers on the use of a natural gas-fired steam boiler over a five-year operational period. The total expenditure is calculated by combining the estimated cost of the heat energy generated and the expense of the local boiler installation. Additionally, we calculate both gross and net revenue over the same duration. Key financial metrics—such as cost of energy (COE), gross revenue, net present value (NPV), and the present value per dollar ($)—are assessed to determine the financial viability of the steam flood system.

Furthermore, we developed an artificial neural network model, utilizing the Bayesian regularization algorithm, to predict the cost of energy required for a steam flood project. The findings illustrate the economic potential of locally designed steam flood systems in optimizing heavy oil recovery in the Niger Delta. This approach not only offers significant economic advantages but also contributes to energy sustainability in the region. The study also underscores the importance of employing simple proxy models in the economic evaluation of steam and hot water flooding projects.

Overall, this analysis provides valuable insights for oil and gas industry stakeholders, demonstrating the economic feasibility and potential returns of implementing local steam flood technology in heavy oil recovery.