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AFX News: Statoil, Shell scrap ‘carbon capture’ plans

Published : Fri, 29 Jun 2007 09:04
OSLO (Thomson Financial) – Norwegian oil group Statoil and Britain’s Shell said they are scrapping plans to use carbon dioxide (CO2) to increase oil production.

An evaluation showed that ‘although the value chain is technically feasible, it is not commercial viable,’ Statoil said in a statement.

The project, announced in March 2006, involved the construction of a gas-fired power plant and a methanol production facility in Tjeldbergodden in central Norway, from which CO2 would be directly injected into the Draugen and Heidrun offshore fields to enhance oil and gas recovery.

It was designed to respond to the challenges of increasing energy supplies and addressing the related CO2 emissions, and was to be completed in 2012.

‘Use of CO2 for enhanced oil recovery on Draugen is not commercially defendable and thus will not make a positive contribution to the value chain,’ Statoil said.

‘The extra oil volumes that the Draugen licence operator believes to be recoverable are too low to justify the necessary investments in the field,’ it said.

Statoil said however it would continue ‘to explore if there is a possibility to establish the gas power plant at Tjeldbergodden with CO2 capture and storage’.

Shell pioneered CO2 for enhanced oil recovery in the 1970s, while Statoil is a pioneer in CO2 storage through its Sleipner field in the North Sea, Snoehvit in the Barents Sea and In Salah in Algeria.

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