KUALA LUMPUR (Sept 23): Petroliam Nasional Bhd (Petronas) has allocated RM1.1 billion over the next three to four years towards research in the Enhanced Oil Recovery (EOR) programme, Petronas Board of Directors member Datuk Mohamad Idris Mansor said today.

Petronas currently has more than 10 EOR projects in the pipeline at various maturation stages, but requires more research to optimise the technology in view of depleting resources.

“There are still major challenges in applying EOR technology to other fields,” he said in his speech while opening the Malaysia Oil and Gas Services Exhibition Conference 2014.

“EOR projects require high investments and are technology-intensive, fraught with risks and require highly skilled technologists to unlock true hydrocarbon potential.

“Petronas, through its E&P Technology Centre, has allocated substantial resources, manpower and finance to conduct research and develop innovative and applicable technologies to rejuvenate and enhance production of these fields,” he added.

EOR uses steam flood, water flood injection or hydraulic fracturing to enhance yield of oil extraction.

It requires earth models, numerical simulators, pilot studies, and sophisticated monitoring tools for implementation.

Mohamad Idris said the first application of EOR technology is being implemented at the Tapis oil field, offshore Terengganu at a cost of RM10 billion.

It has the potential to boost production from Tapis by up to 35,000 barrels of oil per day from the present 3,000 to 4,000 barrels per day, he said.

“The implementation of the EOR will increase the economic value of the field, extending its life by more than 25 years,” he added.

He also said Petronas has awarded six risk service contracts (RSCs) to niche exploration and production companies and their selected local oil and gas service contractors as well as partners.

Three of the RSCs are Berantai, Balai Cluster and Kapal Banang Meranti are now in production while three others-Tanjung Baram, Tembikai Chenang and Ophir-are under development.

At present, Malaysia has approximately 22.2 billion barrels of oil equivalent of oil and gas reserves, being the third largest gas reserves in the Asia Pacific region behind China and Indonesia.

Mohamad Idris said the oil, gas and energy sector contributed about 30% of the country’s Gross Domestic Product (GDP) and approximately 40% of the country’s revenue.