CO2 Enhanced Oil Recovery Market size is projected to expand at a rapid pace over 2022-2028, as a result of the escalating demand for crude oil, alongside the rapid shift from the traditional heat, gas, or chemical injections to the CO2-EOR technique to increase the output of aging oil fields. According to the U.S. DOE (Department of Energy), the amount of oil resources that can be recovered with this technique is over 137 billion barrels, with 67 billion barrels recoverable at an economical price of $85 per barrel.
The CO2 enhanced oil recovery process is a form of tertiary oil recovery that can extract more oil as compared to the traditional techniques from the existing reservoirs and wells. In this technique, CO2 gets dissolved in the residual oil, lowers its viscosity, as well as displaces it from the rock pores to the producing well, with the potential to recover an additional 15%-20% of the original oil.
Mounting number of depleted oil reservoirs, coupled with the considerable rise in oil demand, are the major factors fostering the market trends. According to the International Energy Agency, the oil demand across the globe is slated to register by 5.7 million barrels per day in 2021 to 96.7 million barrels per day.
With regards to the technology spectrum, the continuous carbon dioxide flooding segment is poised to depict a high growth rate through 2028, on account of its effectiveness in reservoirs of over 2,000 ft. depth, where CO2 is in the supercritical state. However, unfavorable mobility, early CO2 breakthrough, and viscous fingering or channeling related to this technology, especially due to the presence of reservoir heterogeneities, may impede segmental expansion to some extent.
Asia Pacific is slated to account for an appreciable CO2 enhanced oil recovery market share during the forecast period, owing to the substantial investment in the oil & gas sector and the robust focus on oil exploration activities in developing economies such as India. Indian Petroleum Minister Dharmendra Pradhan, in 2020, announced an anticipated investment of nearly $118 billion in this sector over the next 5 years from U.S. oil companies and investors.
Prominent CO2 enhanced oil recovery market participants include Saudi Aramco, Elk Petroleum, Linc Energy, Anadarko Petroleum Corporation (Occidental Petroleum), Husky Energy (Cenovus Energy), Occidental Petroleum Corporation, NRG Energy, Denbury Resources, Kinder Morgan, and Whiting Petroleum Corporation, among others. Strategic M&A and business expansion are the key efforts being employed by these companies to expand their geographical footprint.
Meanwhile, Predator Oil and Gas announced plans to enter a share purchase agreement with FRAM Exploration Trinidad Ltd in September 2020. The company intended to progress its discussion with Columbus Energy, the parent company of FRAM, which is in line with its forward planning for the expansion of CO2 enhanced oil recovery activities across the Inniss-Trinity field.
The devastating economic and social impacts of the coronavirus pandemic have been witnessed in a range of industrial sectors, because of the temporary closure of businesses and the implementation of other restrictions to limit the virus spread. The rapid surge in oil price and pervasive supply shortage also have adversely impacted the oil & gas sector.
However, the market is expected to regain traction in the upcoming years impelled by the commendable increase in the demand for oil and high spending on the oil & gas infrastructures. For example, the oil and natural gas sector in India is predicted to receive a fresh investment of nearly $300 billion by 2030, with the government focusing on doubling the natural gas share in the energy base to 15%. These aforesaid factors, alongside the gradual relaxation of COVID restrictions, may bolster CO2 enhanced oil recovery market trends in the post-pandemic era.