Synergy between Geothermal and Stranded Oil Fields to Add Value to Geothermal Projects (2017)

This MSc thesis has been written by former intern Daniel Aramburo Velez.

The Dutch Government is aiming for a CO2 neutral energy supply in 2050; this requires a transition from using energy from fossil fuels to using renewable energy sources. Decline in oil production in the Netherlands occurs in an epoch with an increased interest in geothermal heat production as an alternative source of energy. In the present study it is investigated how oil production from stranded fields (fields abandoned when field development was considered not to be profitable), especially those with heavy oil, can add value to a geothermal project when thermally-enhanced oil recovery (EOR) with injection of hot water from a geothermal reservoir into an oil reservoir and coproduction of oil and geothermal energy is considered. The main focus is on the oil reservoir, while productivity and temperature of the geothermal source is assumed to be constant.

In order to determine the feasibility of such project, a geological model for an oil reservoir was constructed, taking the Moerkapelle field as a case study, so that reservoir simulations can be performed on it and results in terms of oil production, heat production, total energy production and economics can be obtained and analyzed. Geological modelling (structural and stratigraphic) and reservoir simulation are developed in three different stages, every time making the model more complex (i.e. heterogeneity due to structural and sedimentary features).

Project feasibility was calculated in terms of the percentage of reduction on the required subsidy for a geothermal project (required subsidy is the one that makes the NPV of a geothermal project to be zero under a pre-royalty pre-tax framework). For a homogeneous reservoir the reduction in required subsidy for a single doublet geothermal project can reach 85% and complete subsidy independence can be achieved when scaling up the project to 3 or more doublets. However, for heterogeneous reservoirs, the subsidy reduction for a single doublet geothermal project would not be higher than 52% in the most optimistic case and, when all the realizations are taken into account, there is no added value from the synergy but still an average reduction in the NPV of 13%. Scaling up the project to 3 or more doublets generates an average reduction of 31% in the required subsidy with a maximum reduction of 73% in the most optimistic case.