4
Program Effectiveness and Recommendations for Improvement

This section contains, in summary form, the panel’s response to the two questions posed to it by the Department of Energy. The first question, “Has the Reservoir Class Program proven effective in demonstrating the application of new and existing technologies to prolong production in marginal fields?” is addressed in the following two sections of this chapter. The second question, “How should the program be modified to improve its effectiveness in meeting this goal?” is dealt with in the final section.

ELEMENTS NECESSARY FOR SUCCESS

By expanding reserves, effective recovery techniques can greatly prolong the productive life of marginal reservoirs. Applying technologies that are compatible with the reservoir architecture, trap conditions, oil properties, and drive mechanisms will result in the desired increased production and prolonged reservoir life. Whether or not such technologies are applied in a given field depends on the economics of their application and acceptance of these technologies as effective by the producer community. Success of the Reservoir Class Program therefore depends on two factors: (1) demonstrating economically successful technologies that have broad application for improving oil recovery within and among reservoir classes, and (2) conducting successful technology transfer that reaches a wide range of operators who produce from marginal fields. Success also depends on fa-



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4 Program Effectiveness and Recommendations for Improvement This section contains, in summary form, the panel’s response to the two questions posed to it by the Department of Energy. The first question, “Has the Reservoir Class Program proven effective in demonstrating the application of new and existing technologies to prolong production in marginal fields?” is addressed in the following two sections of this chapter. The second question, “How should the program be modified to improve its effectiveness in meeting this goal?” is dealt with in the final section. ELEMENTS NECESSARY FOR SUCCESS By expanding reserves, effective recovery techniques can greatly prolong the productive life of marginal reservoirs. Applying technologies that are compatible with the reservoir architecture, trap conditions, oil properties, and drive mechanisms will result in the desired increased production and prolonged reservoir life. Whether or not such technologies are applied in a given field depends on the economics of their application and acceptance of these technologies as effective by the producer community. Success of the Reservoir Class Program therefore depends on two factors: (1) demonstrating economically successful technologies that have broad application for improving oil recovery within and among reservoir classes, and (2) conducting successful technology transfer that reaches a wide range of operators who produce from marginal fields. Success also depends on fa-

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vorable economic conditions and a confidence that such conditions will persist through the intended period of technology utilization. The program intends to demonstrate technologies that can be applied under present oil prices. It is worthy to note that some project operators who briefed the committee stated that their project would not have been accomplished without the 50 percent cost-sharing from the DOE. All of the operators stated their projects certainly would have been smaller in scope without DOE funding, and they would not have had an element of technology transfer. EFFECTIVENESS OF THE PROGRAM The Reservoir Class Program has been successful in encouraging the application of a broad spectrum of conventional and advanced technologies for increasing oil recovery from existing fields. Some of the projects, as cited in the report, are already showing promising results. In most projects, however, it is too early to determine whether the application of these technologies will result in increased oil production. The most effective features of the program are the large number and variety of participants, the geographic diversity of the projects, and the requirements for a 50 percent cost-sharing arrangement. The cost-sharing arrangement ensures a commitment to obtaining results that lead to the practical outcomes that benefit both industry and the nation, namely increased domestic oil production. The main weaknesses of the program are in the areas of project review and technology transfer, and these issues are addressed in the recommendations of the report and summarized in the following section. The greatest uncertainties regarding the effectiveness of the program in prolonging the production from marginal fields are the success of individual projects, technology transfer, and the price of oil. If the technologies demonstrated are successful, if the technology transfer process is effective, and if oil prices remain at or above their present levels, then the program will likely contribute significantly to enhancing domestic production by reducing the rate of well and field abandonment thus extending the life of marginal fields. KEY RECOMMENDATIONS Reservoir Class as Basis for Organization Continue using the reservoir class concept as a basis for organizing the Reservoir Class Program. Future proposal solicitations, however, should be open to meritorious projects from previously funded reservoir classes as well as the class currently being solicited.

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Peer Review and Quality Control Establish a more complete review process that features the use of external technical experts (peer reviewers) to conduct: Proposal evaluation Project monitoring, including evaluating the completeness and appropriateness of reservoir characterization assuring correct application of technology Review of project results prior to technology transfer Evaluation of results after project completion Technology Transfer The ultimate responsibility for transferring the results of all field demonstration projects should be accepted by DOE. Furthermore, DOE should design and implement a new and innovative comprehensive plan for transferring technology for the Class Reservoir Program.

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