Maintaining Injectivity, Economic Evaluation Remain Important Concepts

(Tech Connections Column, April 2002, American Oil and Gas Reporter)

Last month we addressed applying proven geological concepts in a thorough re-look at mature areas like the Illinois Basin. Continuing the theme that technology doesn’t have to be new to be of value, this column focuses on refreshing knowledge of basic concepts in two areas of interest to nearly all operators: maintaining injectivity in injection and saltwater disposal wells, and economic evaluation of producing properties.

Numerous factors influence sustaining injectivity. Among the more important issues is ionic composition or clay interactions. When fresh or low-salinity water is injected and comes into contact with reactive swelling clays (smectite or mixed layer smectite/illite clays), water will be substituted for cations, expanding the clay structure. Petrographic analysis, scanning electron microscopy, or X-ray diffraction analysis can be used to define the types and amounts of clays. Knowing the clays, specific treatments can then be developed.

Clays that are not normally considered water sensitive, such as kaolinite, may be susceptible to defloculation. Defloculation is brought on by a disruption of electrostatic forces, which can occur with abrupt reductions in cation concentration or by the presence of a caustic pH.

Chemicals such as demulsifiers, surfactants and corrosion inhibitors also affect injectivity. Many of these compounds have a polar nature, which may cause a shift to a more oil-wet condition that may improve water phase permeability and reduce the sensitivity of clay minerals. However, some chemicals create films that can trap hydrocarbons on the formation face, reducing injectivity.

Injectivity is also affected by suspended solids. Plugging and bridging in the pore system is controlled by particle size, flow velocity, pore size distribution, and to a certain extent, the wettability of the fines and formation. One rule of thumb is that if the particles are larger than 33 percent of the pore throat diameter, they will create stable bridges. But just a few inches into the formation where laminar flow prevails, particles as small as 7 percent of median pore throat may plug pores. Twenty percent of pore space is suggested as a practical standard for sustaining long-term injectivity.

Other factors include oil carry-over, dissolved oxygen, and bacteria. Oil carry-over less than 5 milligrams per liter can be tolerated by most formations having 20-30 millidarcies permeability. A practical test for determining oil carry-over is to fill a gallon glass container with water, seal and let it set for 24 hours at room temperature. If there is a visible oil “rim” on the top, oil carry-over is too high.

Too high oxygen levels lead to corrosion and solids. Consider closed systems, recognizing even then that oxygen scavenging may be required. Sulfate-reducing bacteria generally create the largest problem, but aerobic bacteria can also occur. Work to keep bacteria from being introduced into the system, but test frequently and recognize that some form of treatment will often be required.

Suppose a company has operated prudently. Production is up and it wants to sell. Or perhaps it is looking at buying properties. As with maintaining injectivity, there are common-sense thoughts for economic evaluation. At the most basic level, recognize that reserves are a function of economics, rather than economics being a function of reserves.

The first factor is what oil price to use. Everyone probably has his own opinion, but one should recognize that over time, in nominal terms the rate of change in oil prices has been very modest, and when price excursions do occur, prices tend to return to the historical trend relatively quickly. There can be comfort in consensus (see “Banks, Reserve Buyers Concur on Future Oil, Gas Prices,” the Oil and Gas Journal, Feb. 25, 2002), but this author’s experience is that “whenever industry agrees” regarding what will happen, that is usually not what happens.

With operating costs, one must recognize that there are variable costs related to lifting and handling fluids (dollars per barrel of fluid), variable costs related to wells (dollars per well), fixed costs (such as labor in dollars per month), property-specific overhead costs, and other foreseen and unpredictable costs. One must know the true economic limit, but accept that other factors influence whether the well/lease is really abandoned at the true economic limit.

In the “old days,” it was common to assume that salvage value offset abandonment costs. With low salvage values and environmental assessment, site restoration and remediation requirements, old-day concepts are no longer enough. One should accumulate funds from cash flow so there are no surprises at the end of a property’s life.

Editor’s Note: The author wishes to acknowledge injectivity insights excerpted from PTTC’s first quarter 2002 Rocky Mountain newsletter; “Water Quality Considerations Resulting in the Impaired Injectivity of Water Injection and Disposal Wells,” from the June 2001 issue of Journal of Canadian Petroleum Technology; and economic evaluation insights excerpted from a presentation by Richard J. Miller and Associates Inc. in a November 2001 West Coast PTTC workshop.