Wide scale implementation of surfactant EOR faces many challenges mainly due to the uncertainty in field application (e.g. reservoir heterogeneity, surfactant adsorption, etc). It is important to have the ability to manage this uncertainty to produce optimal implementation policies. This paper suggests the use of Real Options theory as a possible source for a decision making and evaluation method in surfactant flooding. Real Option theory is based on the concepts of the options traded in stock markets applied to real projects. Real Options theory provides a dynamic framework to manage uncertainty and it also provides evaluation methods to produce quantifiable outputs.

The Least Squares Monte Carlo (LSM) algorithm is the evaluation method used in this paper. The algorithm was applied using example cases based on a synthetic reservoir model. The option evaluated was that of finding the optimal time for starting the surfactant flood. It was assumed that the life of the reservoir was 10 years. The option decision nodes were chosen to be at the start of years 4, 5, 6 and 7. The analysis was performed using Schlumberger’s ECLIPSE as the numerical simulator for the surfactant flood and a code was written in MATLAB to run the different simulations and the LSM algorithm.

Three examples were considered, where the first example assumes one state variable, the residual oil saturation to the chemical flood, Sorc. For the second case, surfactant adsorption, Ds, was assumed as the only state variable. The third and final case considered both Sorc and Ds as the state variables. The LSM algorithm demonstrated that, at this basic level, it can produce an optimal policy for a specific option. It was found that most of the optimal surfactant flood starting-times were at year 6. This was mostly due to its proximity to the breakthrough time of the model which was during year 5. The optimal injection policies recommended achieved, on average, an increase in recovery efficiencies of 0.092, 0.069 and 0.070 for examples 1, 2 and 3 respectively in contrast to the no-option scenario of initiating the surfactant flood at the start of the reservoir life (year 0). These values represent the value of the flexibility in initiating surfactant flooding. This method is being considered for more complex and realistic situations.

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