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CCS with EOR in the Danish North Sea / TriGen as an CO2 EOR enablerLondon 18 April 2012Lars Hende, Director Commercial & Strategy, CO2 EOR Erik Bek-Pedersen, Senior Process Engineer, Technology & Innovation

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1,000 bbl per dag

Maersk Oil operates 650.000 bbl of oil and gas equivalents per day

Operated or non-operated productionExploration or development activities

USA

Norway

United Kingdom DanmarkKazakhstan

Qatar Abu-Dhabi

Algeria

Angola

Brazil

Grenland

QatarKazakhstanUKDenmark

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Declining Production in Denmark (2011)

Source: DEA, 2011

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DUC Infrastructure

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• CCS remains accepted as a necessary climate change mitigation measure in Europe

• CO2 is suitable for enhanced oil recovery in selected mature oil fields in Denmark

• CO2 will be readily and timely available around the North Sea on acceptable terms to support profitable oil business

• The London Protocol does not prevent cross boarder transport of CO2 for EOR and CO2 EOR is appropriately recognised in the ETS system.

Base assumptions for CO2 EOR in Denmark

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CO2 EOR Onshore US

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CCS with EOR in Denmark as a CO2 Emissions Abatement MeasureAdvantages

• Reduces CCS costs (may avoid storage costs)

• Provides energy security• Accelerates CCS implementation• Reduces geological risks• Provides revenues to society• Uses current infrastructure and

facilities• Offshore – not onshore

Challenges

• High Capex• Oil recovery risks exists• Long-term liability• Chain complexity• Public perception issues

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Transport(20-30%)

Capture(50-60%)

Storage(10-25%)

Source: McKinsey

CCS costs

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Financial incentives for CCS with or without EOR are insufficient

EUA Prices

• Current CCS projects increasingly challenged dispite available funding from NER300 andEERP –EUA prices too low and uncertain

• Additional measures required to kick start CCS

• Emission standards may be required to ensure accelleration of CCS

• EOR may need separate encouragement

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Business Model

• Emitter to capture and transport CO2 in agreed volumes to the EOR/storage site at its risk and cost

• Storage provider to provide permanent storage of all volumes received at its risk and cost

• ETS allowances generated for the sole benefit of the Emitter• Subsidies (NER300 and EERP) for the sole benefit of the emitter• EOR generated for the sole benefit of the storage provider

Cap

ture

Tran

spor

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EOR a

nd S

tora

ge

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CO2 emissions concentrations

500km

250km

750km Ammonia

Cement

Iron & steel

Gas processing

Power

Refineries

Maersk North Sea field

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CO2 based EOR provides a bridge between several geopolitical agendas

Climate Protection Affordability of Energy

CO2 based EOR

Security ofEnergy Supply

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TRIGEN MOVIE

TriGen: Clean Power, Pure Water and Reservoir Ready CO2

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Principal CO2 Capture and Use Concepts

Atmosphere

Syngas& Shift

+ CO2 sep

Air Separation Unit

AmineAbsorption

CO2Compression& Dehydration

Power & Heat

Power & Heat

Power & Heat

N2

N2 O2

O2

H2

N2O2

CO2

CO2

CO2

Air

Post Combustion

Precombustion

Oxyfiring

Air

Air

Fossil Fuel

• Enhanced OilRecovery (EOR)

• Enhanced CoalBed Methane

• Old Oil/GasFields

• SalineFormations

TriGen is an oxy-fuel technology:Pure CO2 – no capture costAir Separation => energy penalty

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TriGen for Upstream Oil and Gas: Principles

(80 bar, 75 deg C)

Oxygen (O2)

Gas (+ CO2)

235 MWeGross

160

COCO22

Power

Nitrogen (N2 )

2

Separation 2000 m3/dPure Water

MWe

generator

2

Net Electric

OxyFuel

Converting (low quality) hydrocarbons into electricity, CO2 and water

300 mmcf/d

OxyFuel GasCombustor

Gas/SteamTurbine

85 mmcf/d

Technology Partners

Air Separation Unit (ASU)

75 MWe used by:• Air Separation Unit• Gas, O2, CO2 compression

50 mmcf/d

Gas (+ CO )

45 mmcf/d

CO2

Oil or Gas Reservoir

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Zero Emission Energy and Low Cost CO2

TriGen can accept low quality fuel gas (up to 90% CO2)

This makes TriGen a ‘full life cycle’ solution for CO2 EOR

Maersk Oil’s TriGen Technology links up the energy value chains

• TriGen’s oxyfuel combustion process delivers very pure CO2 and N2 without the high cost of carbon separation

• CO2 and N2 injectants can be used to replace valuable methane for secondary and tertiary oil/gas recovery

• Clean power and pure water for domestic use

• Enables ”zero emission” fossil fuel power generation

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TriGen Integrates Gas and Oil Field Developments

Power CO2

N2

Water (Cold or Hot)Fresh / Low sal

Carbonated water

Gas field (0-90 % Co2)

Steam

Gas(0-90 % Co2) Power EOR process

ROZ

EGR

Heavy oil

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12” Gas Generator

Oxyfuel Combustor using Space TechnologyOperating in California since 2005

CleanEnergySystems

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TriGen Technology Fit to CO2 EOR and Low Perm Carbonates

Tight Carbonates

CO2 EOR

TriGen

*TriGen makes EOR economic by supplying low cost CO2

Low Cost CO2

Optimal Recovery Efficiency

Contaminated Gas Supply TriGen Unlocks Value* From

More Challenging Reservoirs

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Advanced EOR potential enabled by TriGen...

TriGen’s multi product streams offers several attractive displacement process options to optimise reservoir recovery

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Maersk Oil objectives of EOR

• Maximize recovery to the benefit of all stakeholders

• Arrest declining production

• Easy oil is produced – maximize use of existing facilities

• Focus on sustainability and reducing carbon footprint

Total Danish Oil Production

Source: DEA

Potential IOR and EOR, up to 15%

Scope Production, 4%

Produced, 19%

Remaining Production, 6%

Remaining, ?%

• Residual oil• Thin oil columns• Bypassed oil• etc

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TriGen Value Summary

• Low cost CO2 and N2

Replacement of methane injection

Enabler for EOR and EGR

• Zero emission power from fossil fuels

• Pure water for WAG or domestic use

• Full life cycle CO2 EOR field development solution

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Thank you for your attention

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Back-Up

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Maersk EOR Activity Around the GlobeDeveloping the North Sea’s 1st

offshore CO2 EOR Flood

Developing the World’s 3rd Subsea HC WAG

Development (Deepwater)

LPG Injection with option to move to WAG

Piloting TriGen Oxyfuel Technology Operating HC WAG Offshore

CO2 EOR StudiesLoSal & Chemical EOR Studies

Partner in onshore HC WAG

Development