Market
The Energy Information Administration (EIA) forecasts an increase in global oil demand of 2% per annum, but production from existing capacities is shrinking at double that rate. An enormous gap is opening-up between the amount of oil that is required and the amount of oil that is currently in production. To put the size of the gap in context, by 2015, the oil industry will have to add new production capacity equal to double the current production of Saudi Arabia, the world's largest producer of oil. By 2035, eight times Saudi Arabia's current production will need to be brought online in order to satisfy the world's demand for more oil.
Enhanced oil recovery (EOR) is the future of oil production.
The number and size of new oil discoveries has been declining for decades, so where is the additional oil going to come from? If new discoveries are not the answer, then more oil must be produced from existing fields. The most common way to boost oil production from an aging field is Thermal Enhanced Oil Recovery (EOR). Over the next few decades, we are going to be seeing a lot more thermal EOR applied to the world's oil fields.
Normally, the steam required for EOR is produced by burning immense amounts of natural gas. With gas now a valuable energy commodity, oil producers would much rather sell the gas than burn it to heat up the ground. In many oil producing states, especially in the Persian Gulf region, there is a shortage of natural gas. Of the six countries in the GCC, only Qatar is a net gas exporter. All others are importers of gas.
Solar steam is the future of EOR.
Most of the world's oil fields are in sunny locations, like the Middle East or California, creating the possibility of producing steam for EOR using concentrated sunlight. Unfortunately, the high price of solar steam has limited its use for EOR to a small number of experimental installations, such as the one created in Southern California by ARCO in the 1980s.
GlassPoint has developed a solar steam generator specifically for Enhanced Oil Recovery that produces steam at a lower price than steam produced by burning natural gas. By breaking this price barrier, GlassPoint has created the market for solar EOR, allowing operators to reduce costs, reduce emissions and save gas for higher value applications.
GlassPoint's solar EOR solution is cost-competitive with natural gas today.
After the development of a successful prototype unit in China in 2010, GlassPoint's solar steam generators are being deployed at oil fields worldwide. In February 2011, GlassPoint unveiled the world's first commercial solar EOR project at a 100-year old oil field operated by Berry Petroleum in McKittrick, California. Then, in August 2011, GlassPoint announced the award of a contract with Petroleum Development Oman (PDO) to build a 7 MW solar steam generator for EOR at an oil field in Southern Oman. PDO is a joint venture of The Sultanate of Oman, Shell and Total.
Download the report from Raymond James.