2

Agenda

In Salah CCS: Project Description

Site Selection and Management

Monitoring Stored CO2: Joint Industry Project

Key Lessons Learned from Phase 1

–Well Integrity: KB-5

–Seismic Interpretation

Plans for Phase 2

Questions/Answers

3

Krechba

Teg

Reg

Garet elBefinat Hassi Moumene

In Salah

Gour Mahmoud

Proposed ISG Pipeline

REB

Hassi BirRekaiz

Hassi Messaoud

Hassi R’Mel

Tiguentourine (BP)

02151093

Algiers

Tangiers

Lisbon

Cordoba

Cartagena

M O R O C C O

A L G E R I A

S P A I N

L I B Y A

MAURITANIAM A L I

SkikdaTunis

N I G E R

In Salah Gas Project

• Industrial Scale Demonstration of CO2 Geological Storage (Conventional Capture)• Storage Formation is common in Europe, USA & China• Started Storage in August 2004• 1mmtpa CO2 Stored (17mm tonnes total)• $100mm Incremental Cost for Storage No commercial benefit• Test-bed for CO2 Monitoring Technologies $30mm Research Project

Project Fun Facts

Project Overview

4

Additional CCS Infrastructure (CDM?)

Natural

Gas

(10% CO2)

& Water

Power-

GenPower-

Gen

Compression DehydrationPipeline

Transportation

Injection

Well-head

Dry Gas

for Sale

(<0.3% CO2)

Natural

Gas

Processing

Plant

CO2

Stream

Fuel Gas

Electric

PowerElectric

PowerOverburden

Stored CO2

CO2 Storage

Complex

CO2 Storage Project Boundary

Glycol

Dehy

Glycol

Dehy

5

CO2 Compression and Storage

50mmscf/d CO2

(1mmtpa)

Compression

Transportation

Injection

Storage

Krechba 501

Pilot hole plus 1250 metres of horizontal section

6

CGS Risk Profile

Risk Profile of a CGS Project

Time

Ris

k

Site

Selection

and

Develop-

ment

Operation

(Injection)

ClosurePost-Closure

MVAR

&QRA

Nation/

Landowner

Nation/

LandownerOperator Stewardship

Project

Phase

Monitoring

Baseline

Data

Acquisition

and Initial

QRA

MVAR

&QRA

MVAR

&QRA

We

Are

Here

Maximum Risk (Developer)

Maximum Risk (Nation)

7

Oil & Gas Capital Value Process

( Ref: In Salah Case Study, DNV 2009 )( Ref: In Salah Case Study, DNV 2009 )

8

Retrospective Compliance with EU CCS Directive

Colour Key

Compliant

Compliance possible

Non or difficult compliance

Section Category Activities Directive Assessment Characterisation Development Operation Closure

MPCP Appraise Select/Define Execute Operate Decommission

2.1 Life Cycle Risk Management Periodic Risk Assessment and Management

Model and performance Uncertainty assessment

3.3 Life Cycle Phases

Characterisation Characterisation/assessment of storage complex

Detailed Risk Assessment

Develop injection, monitoring, corrective measures plans

Development Detailed engineering design of the storage scheme

Baseline pre-injection monitoring

Operations Reporting of monitoring results to Competent Authority (CA)

Development of Corrective measures plan

New data used to update models and risk assessment

Monitoring plans to be updated and verified

Notify CA of any leakage or significant irregularities

Closure Develop monitoring plan with targets and methods

Conduct post closure monitoring

Updated site characterisation and risk assessment

Inspections by CA post closure

Pre-Transfer to CA Prove long term containment of CO2

Monitor and assess for 20 years

Site sealed and facilities removed

6

Risk Management for

Geological Storage

Use CO2Qualstore risk assessment methodology (DNV

2010a)Dialogue on Risk management with CA

In Salah CO2 Storage vs. EU CCS Guidelines

Storage Project Stages

GD1 Life Cycle Risk Management

9

In Salah CO2 Joint Industry Project (JIP)

1. Provide assurance that secure geological storage of CO2 can be cost-effectively verified and that long-term assurance can be provided by short-term monitoring.

2. Demonstrate to stakeholders that industrial-scale geological storage of CO2 is a viable GHG mitigation option.

3. Set precedents for the regulation and verification of the geological storage of CO2, allowing eligibility for GHG credits

Objectives (2005-10)

10

Joint Industry Project: Timeline

0

2

4

6

8

10

12

14

16

2005 2006 2007 2008 2009 2010

US DoE

EU RTD

Sonatrach

StatoilHydro

BP

EU Contract

CO2ReMoVe

Signed

BP/Statoil

JIPA Signed

BP/Statoil/Sonatrach

JIPA Signed

US DoE LLNL

Contract

Signed

1960-80 1996 1998 2000 2002 2004

Krechba

Appraisal

(Total)

Krechba

Lease

acquired

by BP

Kyoto Protocol

BP GHG Trading

In Salah

Development

Approved

(with CCS)

CO2 Injection

Wells Drilled

Start-up:

Gas Production

CO2 Storage

In Salah CO2 Storage JIP

Seismic

11

In Salah JIP Organisation (2010)

Executive Board

(BP/SH/So)Hill/Tesaker/Siaci

Program ManagerIain Wright

ModellingPhilip Ringrose

R&D / CommsBritta Paasch

MonitoringAllan Mathieson

Co-Fund GovtsEU R&D, US DoE

JIP Contractors JIP Contractors JIP Contractors

Advisory Board8 Independent

Academics

Program Operator = BPISG Shareholders

(BP/SH/So)

Field OperationJohn Midgely

Nabil Saoula

JIP Contractors

JV Contractors

12

Expected CO2 Migration

KB5

KB4

KB8KB8

KB8 Legacy Wells

13

Benefit

CostLow High

Low

High

Satellite

Imaging

Geochemistry

Micro-

seismic

Flowmeters

Wellhead

monitoring

4D gravityTracers

Dynamic

Modelling

Wellbore

sampling

Annulus

Sampling4D VSP

Cement

CO2 work

4D

Seismic

Tiltmeters

Cross-well

EM

Geomechanics

Logging

Surface EM

Aquifer

studies

Microbiology

Surface fluxObservation

Wells

Airborne

Flux

Park

Focussed

ApplicationJust Do It

Consider Key

To be tested

Water

Chemistry

Monitoring Technologies -Evolution

Soil Gas

14

InSAR at End March 2010

15

InSAR: London Jubilee Line Construction

16

2008 Quantified Risk Assessment

In Salah Containment Risk

0.001

0.01

0.1

1

10

100

1000

10000

100000

1000000

Pe

rme

ab

le z

on

es

in s

ea

l

Lea

kag

e -

Un

de

tecte

d f

ault

Lea

kag

e -

We

lls

Re

gio

na

l-sca

le

overp

ressu

rizatio

n

Loca

l-sca

le

overp

ressu

rizatio

n

Exce

ed

ing

sp

illp

oin

t

Ea

rth

qu

ake

indu

ced

fra

ctu

res

Mig

ratio

n d

ire

ction

Tota

l C

onta

inm

en

t

Ris

k

Ev

en

t R

isk Q

uo

tie

nt

Pessimistic(CL95%)

Planning(CL80%)

Optimistic(CL50%)

AcceptableProjectContainmentRisk (RQ)

AcceptableSingle EventContainmentRisk (RQ)

17

Focus on Two Topics

1. Well Integrity: KB-5

2. Seismic Interpretation

18

Focus on: KB-5 Decommissioning

Kb-5

Kb-502

1300m

19

KB-5: July 2007

CO2 breakthrough occurred at KB-5

between inspection intervals

(August 2006 to June 2007)

Detected by leak from valve

(should have been pressure on a gauge)

Approx. 0.1 tonne CO2 escaped

(3.2 million tonnes stored)

Flange and gauge fitted

CO2 injection at Kb-502 stopped during

KB-5 decommissioning

Flange, CO2, gauge (with pressure)

20

KB-5 Completion DiagramsRig Name: Super20

Start date: 11/01/1980

Suspension date: 18/08/1980

Well Data:

Hole Size Depths (mDDbrt)

26 ???

17 1/2 1732

12 1/4" 2800

8 1/2 3415

Casings Depths (mDDbrt) `

18 5/8 150

13 3/8" 1732

9 5/8" 2800

LOT or FIT EMW (SG)

Reservoir Sections

Kb-5

Well Schematic

13?" 68ppf N80 API shoe 1732m

9?" 47 ppf P110 API shoe at 2800 mMDbrt

8 1/2 Hole

Ciment plug at 3210m

Note : All depths referenced to

Super20 RTE = 5.4mAGL

Cement plug at 2746m

Kil

l s

trin

g

2 7

/8"

EU

6

.50#

N8

0

2681m

Brine 1.14 SG , PH=10

185/8" 87.5ppf K55 API shoe ???m

Ciment plug at 2980m

2850m

3200m

Bridge plug at 2706m

DV at 1680 m

TOP of Cement at 2350m

TOP of Cement at 1100m

Before (1981) After (2009)

21

Focus on Seismic Interpretation

Sleipner Precedent: Seismic is the preferred monitoring technology

22

Cost

Low High

Seismic at Krechba is very ExpensiveB

enefit

Low

High

Satellite

Imaging

Geochemistry

Micro-

seismic

Flowmeters

Wellhead

monitoring

4D gravityTracers

Dynamic

Modelling

Wellbore

sampling

Annulus

Sampling4D VSP

Cement

CO2 work

4D

Seismic

Tiltmeters

Cross-well

EM

Geomechanics

Logging

Surface EM

Aquifer

studies

Microbiology

Surface fluxObservation

Wells

Airborne

Flux

Park

Focussed

ApplicationJust Do It

Consider Key

To be tested

Water

Chemistry

Soil Gas

23

Seismic Survey Only Covered 2 of 3 CO2 Plumes

2009 3D survey – covers only

northern part of Krechba field,

extends slightly further to N (into

neighbouring licence block),

includes:

• Kb-2, Kb-4, Kb-5, Kb-8, Kb-9z,

Kb-16z and Kb-17z exploration

& appraisal wells

• Kb-11 & Kb-14 gas production

wells

• Kb-502z & Kb-503z CO2

injection wells

Original 1997 survey area

New 2009 survey area

24

Seismic Aligns with Satellite Deformation

25

In Salah CCS: Conclusions

Pioneering (Industrial-Scale) CCS project:

– Successful CO2 storage: > 5years, > 3mm tonnes stored, 19 GHGT10 Papers

Excellent collaboration: IOC/NOC/Government/Academia

Injection operations very much as anticipated

Site selection and management is more important than monitoring

Monitoring programmes will be very site-specific:

– InSAR (Satellite) and Wellhead data are very cost-effective

– Seismic very useful, but complex and expensive

CO2 plume/pressure is not homogenous

– Needs high resolution data for appropriate characterisation

– Have modified the storage operation based on lessons learned

26

What Next?

Phase 1: 2006-2010

In Salah is a “data-rich”

project in a “data-poor”

environment

Phase 2: 2011-2015

–LLNL, LBNL

27

JIP2: US DoE Program (2010-2012)

Technical Task Lab

Geomechanics/Geochemistry: Coupled modelling LLNL

Satellite Imagery: stochastic inversion LLNL

Satellite Imagery: deterministic inversion LBNL

Satellite Imagery: Interpretation LBNL

Seismic: Fracture analyses LBNL

Geomechanics: Induced Microseismicity LLNL

Geomechanical Response: Microseismic LBNL

Geomechanical Response: Coupled modelling LBNL

Geochemistry: Modelling of caprock/shallow aquifer LLNL

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Questions?

www.insalahco2.com