Techno-economic evaluation of CO₂-EOR in the North Sea
CO2-EOR is a possible means to produce incremental oil from active oil fields. In the ongoing climate change debate, it is also welcomed as a business case for geological storage of CO2 (CO2 Capture and Storage, CCS). The possibility for applying this technology in the North Sea has been under discussion for several years, but the high cost and financial risk have hampered its deployment until today. Using the techno-economic simulator PSS IV, potential CO2-EOR projects can be evaluated in a realistic way, considering technological, policy-related, economic and geological uncertainties using Monte-Carlo calculations. For the current study, around 450 to 750 MC runs were performed (lower for the Cluster, and depending on the field and scenario), which is considered to produce results in sufficient detail for the current set-up. This number is mainly limited by computing performance. PSS IV includes a unique feature, in that it makes project evaluations considering incomplete information about the future. Next to its standard Monte-Carlo methodology, where stochastic parameter values are changed slightly every calculation, a second level of Monte-Carlo calculations and stochastic parameters are used for creating an outlook towards the future. This methodology is called “limited foresight”, which produces near- optimal investment decisions. This is considered more realistic compared to an optimisation model, where actions are taken based on a perfect forecast of the future. This methodology is combined with Real Options analysis, to include the value of having future project flexibility.