Norway CO2 Injection Said Too Costly To Boost Oil
Date: 27-Apr-05
Country: NORWAY
Author: Alister Doyle
"Technology and costs make CO2 (carbon dioxide) injection too expensive and risky for the licensees on the Norwegian shelf," the NPD said in a report to the Norwegian government.
Many oil companies pump water or gas into offshore oil wells to boost pressure and so force more oil to the surface. In the United States, CO2 injection has been used successfully for 30 years at some fields on land.
But the NPD study said it would cost too much to try to do the same off Norway with carbon dioxide, the main gas from human activities widely blamed for accumulating in the atmosphere and driving up global temperatures.
"Today companies make long-term investments assuming oil prices of about $18 a barrel," Gunnar Berge, head of the NPD, told Reuters. With CO2 injection "it would mean oil prices of $30 to be profitable."
"Considerably better technology is needed to obtain CO2 at lower costs," he said. Norway is the world's number three oil exporter behind Saudi Arabia and Russia.
High costs of transporting CO2 -- emitted by power plants, cars and factories -- by ship or pipeline meant that it was too costly compared to more easily available water.
"Studies conducted on fields in the North Sea -- Gullfaks, Ekofisk, Brage and Forties -- show that the effect of CO2 injection is not as successful," the report said.
MATCHES BRITAIN
Norwegian Oil and Energy Minister Thorhild Widvey said the report echoed findings on the British side of the North Sea.
Still, Widvey expressed hopes at a news conference that high oil prices, at $54 a barrel on Tuesday, might make CO2 injection a profitable option in future.
And she urged London, as rotating president of the European Union in the second half of 2005, to do more to promote cooperation and research into CO2 injection.
Some governments reckon that burying CO2 could help solve the problem of global warming. Many scientists say the buildup of CO2 could spur more storms, droughts and could raise sea levels in coming decades.
The Norwegian NPD report focused on the economics of injecting CO2 as a way of raising oil output without looking at the possible costs from global warming, like a likely swamping of coastal areas or low-lying islands.
The NPD estimated, for instance, that costs of CO2 injection at the Gullfaks field in the North Sea alone would require investments of 12-13 billion Norwegian crowns ($1.92-$2.08 billion).
At the end of 2004, an average of 45.5 percent of estimated oil reserves in offshore reservoirs was recovered off Norway, against a government goal of 50 percent.
Widvey also said that she was asking the NPD to see if the 50 percent recovery rate could be raised.
Fredrik Hauge, head of the Norwegian environmental group Bellona, said that Norway's NPD had got its calculations wrong and that CO2 could be profitable at much lower costs.
"They've made simple mistakes in their maths," he said.
