Iraqi Reservoir Damage May Be Long-Lasting

28 September 2004

Iraq’s leading oil field, Kirkuk, may have suffered irreparable damage to its reservoir as a result of the reinjection of fuel oil, refinery residue and gas-stripped oil over the last 15 years, according to Iraqi industry sources.

The reinjected products amount to some 1.5 billion barrels, according to one estimate.

The process, which was widespread under the former regime of Saddam Hussein, is still continuing, as Iraq struggles to balance its product needs. In general, crude production since the end of last year’s war has continued in the same manner as before, with little sub-surface maintenance.

While under UN sanctions from 1990 to 2003, Iraq for years reinjected excess fuel oil into the Kirkuk field, to deal with excess products that it failed to export, legally or otherwise. Baghdad was allowed to export crude from 1996 under the UN supervised oil-for-food program, under strict supervision by UN monitors.

The smuggling of crude and products through the Mideast Gulf to the United Arab Emirates, as well as overland to Turkey and Syria, was rife at the time. Jordan also imported crude and refined products, including fuel oil for power generation, under trade protocols between the two countries.

Any excess fuel oil from refining for domestic needs, which could not be exported, was re-injected. Iraqi oil officials under Saddam’s regime, pressured to raise oil production to maximize oil revenues, long argued that the amounts were insignificant.

Crude production from the northern Kirkuk fields has been intermittent since the end of the US-led war last year, amid sabotage to export and domestic pipelines. But severe shortages of liquefied petroleum gas have forced North Oil Co., the upstream company in charge of northern production operations, to pump crude in order to strip it of associated gas for processing at gas plants, and then reinject the remaining crude back into the reservoirs.

Industry sources say that this process is continuing, as Iraq struggles to meet local LPG demand. Current production is just 2,000 tons per day, or just 40% of what was produced before last year’s war. The remaining 60% is imported from neighboring countries.

“I believe that Iraq has reinjected some 1.5 billion bbl of dead crude and fuel oil in Kirkuk over the last 15 years,” one Iraqi industry source with deep knowledge of Iraqi oil infrastructure and practices told International Oil Daily in Dubai.

“Depending on where it has been reinjected, the damage caused to the reservoirs could be extensive,” he added.

The extent of the damage is one of the issues covered by planned contracts for reservoir and engineering studies, which the Iraqi oil ministry intends to award next month. Some 14 bids were submitted by international companies, including oil majors BP and Royal Dutch/Shell, for the contracts, which will involve separate studies of the Kirkuk and Rumaila fields.

Petroleum engineers and analysts say the reinjection of so much fuel oil and crude could complicate the Kirkuk field’s reservoir study. “Kirkuk is already a carbonated field and reinjecting fluids that are not original fluids to the field could modify the reservoir structure,” said one engineer.

In a worst-case scenario, the use of additives could change the “wettability” of the field, creating oil-wet rocks instead of water-wet ones. That kind of damage is usually irreparable, experts say.

The injection of fuel oil has definitely increased viscosity, making crude flows harder, sources say. One remedy to this problem involves using gas lift and installing gas pumps in the subsurface facilities.

“It all depends on where in the field the injection took place, how big the area concerned is, and whether it was done at a limited number of wells and which ones,” said another petroleum engineer.

The vast Kirkuk field is 47 kilometers long and about 10 km wide, and has 350 wells.

The absence of specific data on where reinjection took place may be another problematic issue in preparing the reservoir study. Widespread looting of oil company offices in the aftermath of last year’s war and the absence of well logging over past years means that basic data may not be available for analysts to analyze the field’s past behavior and prepare simulations for future production.

“The lack of basic data means that there will be lots of guessing. It increases the uncertainties,” a petroleum engineer said.

Sources at companies that bid for the Kirkuk reservoir study said tender papers supplied by the oil ministry were not specific on the amount or quality of data that exists for the field.

The reservoir studies aim to use the latest technologies to monitor the reservoirs and collect data on their performance. The production process will then be adjusted according to simulations based on the studies, in order to maximize recovery.

Under the Saddam regime, the fields were pushed to their limit without adequate maintenance. Kirkuk was producing at close to 700,000 barrels per day, while the Rumaila fields supplied the majority of Iraq’s output, at more than 1.2 million b/d.

The reservoir engineering studies, together with crash programs already put in place by the oil ministry, will try to rectify the situation inherited from the old regime, by setting new objectives for maximum economic recovery rates and resource optimization at the fields.

By Ruba Husari, Dubai

(Published in International Oil Daily Sept. 28, 2004)

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