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[I]ncreasingly, the world's energy majors and minors are engaging in the water business as they strive to sustain production.
For every barrel of oil produced, the companies are having to pump about three barrels of water, according to Epcon marketing VP Lasse Jahnsen.
In other words, based on current global output of about 80million barrels of oil, some 240million barrels of water is also produced.
And the water-cut will go on climbing, passing 400million bpd in five years at huge cost.
[snip] "For example, I'm working a lot with Saudi Aramco. Their problem is that they have four or five fields that are more than 50 years old. Process plant is designed for a water-cut of maybe up to 30%, but they have 70% and 90% water-cut in some places.
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by Jeremy Cresswell
The Press and Journal
North Scotland
Read the original here.
EXACTLY a year ago, private equity player 3i invested £2.2million in Epcon, a tiny Norwegian firm specialising in water treatment systems for the oil&gas industry.
The attraction was that this firm (Norsk Hydro took a stake in 2002) offers a technology that may make the difference when it comes to large-scale treatment of produced water, bearing in mind that there are other systems on the marketplace.
Epcon's Compact Flotation Unit (CFU) is said to offer higher throughput capability and significantly lower weight and footprint compared with existing systems. This is a key claim as, increasingly, the world's energy majors and minors are engaging in the water business as they strive to sustain production.
For every barrel of oil produced, the companies are having to pump about three barrels of water, according to Epcon marketing VP Lasse Jahnsen.
In other words, based on current global output of about 80million barrels of oil, some 240million barrels of water is also produced.
And the water-cut will go on climbing, passing 400million bpd in five years at huge cost.
While the Epcon technology is about cleaning produced water, rendering it benign, its success will have less to do with environment (except in the North Sea) and more to do with scavenging large quantities of oil that might otherwise be dumped into the environment (most of the rest of the world).
Jahnsen told Energy: "Everyone knows now that the only way to increase oil production worldwide near-term is to get rid of the water. Environmental objectives are being achieved by default ... it has nothing to do with clear-headed management of the problem. This has become a water industry. Oil&gas is just a small part of it.
"For example, I'm working a lot with Saudi Aramco. Their problem is that they have four or five fields that are more than 50 years old. Process plant is designed for a water-cut of maybe up to 30%, but they have 70% and 90% water-cut in some places.
"If they are not able to handle the water, then they have to reduce oil&gas production. The driver is economic. It's all about money. The environmental benefit is a spin-off."
Turning to the North Sea, he said water-cuts were frequently running at 60% or higher.
"In Norway, where we're producing around 3million bpd of oil, we're also producing 4million barrels of water. In the UK sector, for every 2million or so barrels of oil, some 3million barrels of water is pumped."
While some is re-injected, most is discharged (over the side of platforms). This is expected to climb to at least 9million bpd in just a few years.
The big issue with the North Sea is that many fields are now so mature that they are near or at the limit in terms of water treatment capacity and more equipment is needed to boost that capacity further in order to access more oil.
There are big differences between operators. Some have planned for large water-cuts while others have failed in this regard.
"Most have reached ceiling and need additional capacity," said Jahnsen.
"We have looked at every platform in Denmark, Norway and the UK, and I would say there will be a need for new capacity of up to 3million bpd within the next five years.
"We're currently looking into about 30 projects in the UK and Norway. That represents an investment of about $100million.
"Re-injection is one solution, but it's problematic and not as popular as it was a few years ago because some reservoirs have been ruined as a result. Installation costs are huge, too."
Commenting on the broad global picture, Jansen warned that, onshore, there may be discharges of 2,000-3,000 parts of oil per million of water - that is significant and harvestable. For a few thousand dollars' worth of water discharge cleaning technology, millions of dollars' worth of oil can be scavenged.
So how will Epcon grow? After all, it's very small and it has competitors.
As far as Jahnsen is concerned (and 3i, too) it's basically a no-brainer, as long as claims can be validated. And with turnover set to quadruple this year compared with 2004, perhaps Epcon is on to a winner.
To date, the company has signed contracts with a number of major oil companies in Norway, the UK and Brazil, including Statoil, Norsk Hydro, ChevronTexaco, ConocoPhillips and Petrobras. The company has already established a leading position on the Norwegian Continental Shelf and is well positioned to achieve a similar position in other key markets such as the UK Continental Shelf and Brazil.
All contracts are EPC; the company doesn't build anything. It does the design work, but not detailed engineering, and contracts out manufacturing.
"That's the only way to do it," says Jahnsen.
"Remember, we're not selling equipment, we're selling a process solution."
He sees a number of options for the future, including remaining independent, but questions the sense of this as Epcon is a one-horse company in terms of what it offers.
"Oil companies are not interested in just a water treatment product, they also want solids handling ... they want the full package. So we must team up with others to secure the huge new market that is now emerging," said Jahnsen.
"We could have a nice business, so to speak, concentrating in the North Sea. But there's a much bigger game out there in places like Iran, Oman and Malaysia. We must get much better.
"We have several options ... we know we need to do something; more venture capital, get taken over, pursue a takeover/merger with a similar-sized firm.
"We are a small company in a small town in Norway.
"Think on it ... Saudi Aramco alone offers opportunities 50 times bigger than the whole North Sea market. Alone." |
Bottleneck 
