Carbon Dioxide and Enhanced Oil Recovery Project: Economic and Risk Base Model

The use of CO₂ for EOR project can either be (1) capturing flue gas, separate the CO₂, store and transport it to injection point or (2) purchase a volume of the CO₂ needed for the project. This paper examined the former, for a reservoir that requires CO₂ injection for EOR. Economics and stochastic analysis were carried out to ascertain the viability of the CO₂-EOR project. The forecast variables (NPV, IRR and PI) from the economic (deterministic) model shows that the project is viable. However, the risk (stochastic) model shows that there is less than 50.725%, 52.274% and 52.274% certainty that the project will yield $631.5MM NPV, 58% IRR and 3.51 PI, with an average of 51,76% uncertainty impacted by the input parameters (CAPEX, OPEX, oil price and discount rate). The CAPEX and discount rate are the major parameters that impact high uncertainty on the project. Therefore, mitigating them will increase the chances of obtaining the values forecast variables.

Keywords: Carbon Dioxide (CO2), Economic, Enhanced Oil Recovery (EOR)., Uncertainty, probability distribution function, stochastic