The maturity of most North Sea oil fields means there is a narrow time window to deliver CO2-EOR, with potential incremental oil recovered declining by three quarters, from about 500 million barrels, between 2025 and 2030, if a sufficient and reliable supply of CO2 is not delivered early enough. Redevelopment costs are likely to restrict the reopening of closed fields.
Decisions made in the next two years will determine the extent that the benefits from CO2-EOR are realised, including taxable oil revenues, offering low-cost storage for CCS and sustaining the wider oil industry. Several CCS capture plants will need to be operational by 2025 to deliver the supply of CO2. Early approval of both CCS Competition projects will enhance the success, followed by Phase 2 plants in operation by early 2020s.
The most realistic location for CO2-EOR is in the Central North Sea. Enabling more than one CO2-EOR project will require a CO2 pipeline to bring emissions from capture plants in either Teesside or Humber. Enabling the development of a CO2 transport company would de-risk the link between capture and storage operators.
Oil price variability presents a significant risk to CO2-EOR investments. Interventions to the offshore tax regime will be needed to desensitize projects. Early engagement with the public will also be needed to inform developments and establish acceptance for CO2-EOR.
Recommendations
- The oil and CCS sectors need to be coordinated, within Government and across industry.
- Early policy decisions on CCS Phase 1 & 2 will determine the outcomes of CO2-EOR and will be improved if both Peterhead and White Rose go ahead.
- The offshore tax regime needs to support CO2-EOR’s high expense and risks.
- Enable a CO2 transport/infrastructure company to reduce risks for emitters, stores and CO2-EOR.
Steering Group
Steering Group chair:
Angus Gillespie, Shell International
Steering Group:
- Jonathan Thomas, EDU, DECC
- Tony Espie, BP
- Peter Emery, Drax Power Ltd
- Tassos Vlassopoulos, GE
- Paul Sullivan, National Grid
- Steven Fogg, Atkins
- Andy Leonard, Oil & Gas UK
- Ward Goldthorpe, The Crown Estate
- Julien Hailstone, Nexen Petroleum UK
- David Rennie, Scottish Enterprise
- Chris Bryceland, Scottish Enterprise
- Paul Freeman, OCCS, DECC
Further Information
Please contact Richard Heap from the ERP Analysis Team
