According to the International Association of Oil and Gas Producers, about 6 Bbbl of produced water were discharged to the ocean in 2008. This database accounts for only about 32% of world production.

Adequate management of produced water is crucial not only for environmental reasons, but also for production optimization. Both factors are important in the current context of growing environmental awareness, maturing fields, and high oil prices. Operators seeking efficient solutions to cope with these issues create a market for innovative separation technologies and better water management methods.

Regulations and policy instruments
Awareness of environmental pollution has seen a steady increase over the years, and this awareness has been reflected in a tightening of regulations globally. The trend around the world is toward a stricter regulatory regime wherein operators will have to achieve high levels of operational efficiency to comply with state regulations and contribute toward a cleaner environment.

Regulations are a major driver for technological innovation in the area of produced water management. This opinion was verified by a recent survey conducted by OTM Consulting Ltd. Brazil is an example of a country that is gradually enacting well-defined laws to regulate discharge of produced water. Conselho Nacional do Meio Ambiente resolution 393, enacted in August 2007, sets a maximum daily oil-in-water concentration limit of discharged produced water from offshore platforms at 42 mg/l. The maximum monthly average limit has been set at 29 mg/l. Regulations were further extended in 2008 to establish well-defined guidelines for geological storage of effluent water.

water management, technology, development

Environmental and regulatory issues are the key drivers for water management technology development. (Source: “The Offshore Produced Water Gamechanger Report 2010-2014,” OTM Consulting)

Technology
Several technologies are available now to operators to help contend with produced water management at different levels, from minimizing water production to produced water separation to reinjection and reuse. Selecting appropriate technology is based on a detailed evaluation of factors including rate of production, production chemistry, and reservoir characteristics.

Produced water management has huge cost implications. Two major costs associated with water production are the cost of lifting water to the surface and the cost of water separation, treatment, and disposal/reinjection. There is a wide variation in the cost of produced water treatment. Some studies estimate the cost of treating one metric ton of produced water using conventional means at US $0.91. Modern concepts and technologies have demonstrated that this cost could be brought down to about $0.27/metric ton.

Recent innovations in produced water treatment technology that are at different stages of application or development include:
• Membrane-based treatment systems using surfactant-modified zeolites;
• Technologies based on advanced oxidation processes;
• Produced water treatment using gas hydrates;
• Electrostatic dehydration technology;
• Electroflotation technology; and
• Technologies using catalyst nanoparticles for water treatment, etc.

The share of produced water reinjection as a preferred produced water management option has increased over the years. The total amount of produced water reinjected in the OSPAR area increased from 189 MMbbl/year in 2001 to 554 MMbbl/year in 2007. Some cost and benefit considerations in choosing an approach include the level of technical difficulty, whether a dedicated disposal well must be drilled, and whether injection is for enhanced oil recovery.

Operator survey
A recent survey carried out by OTM Consulting Ltd. confirms produced water reinjection is emerging a preferred method of water management due to its environmental benefits. On average, for every metric ton of hydrocarbon produced, 0.9 metric tons of produced water were reinjected in 2008.

formation damage, water concerns

Formation damage tops the list of operators’ produced water concerns. (Source: “The Offshore Produced Water Gamechanger Report 2010-2014,” OTM Consulting)

Produced water reinjection is not possible in all geological formations, and operational issues are associated that could lead to inapplicability of this technique for a number of fields. The majority of respondents to the survey cited formation damage as their primary concern, followed by operational problems such as solids separation, high carbon footprint, dealing with increased pump pressure, and equipment maintenance.

About 75% of the respondents believe reservoir considerations play the most important role in deciding which water management option should be used. The most critical reservoir consideration was the availability of a suitable disposal zone. If the intention is to discharge produced water in an underground formation, a suitable formation with sufficient holding capacity must be available close to the production zone.

Survey participants were unanimous in their belief that produced water management is a complex issue with no single solution. The issue must be dealt with in a holistic manner using the best available technologies for reservoir modeling, production optimization, efficient treatment, and reinjection, bearing in mind the need for secondary oil recovery.

Produced water market
Analysis of the global market for final-stage produced water equipment and topsides equipment required for reinjection suggests the treatment market will be approximately $477 million/year, with the reinjection market at around $1.7 billion/year. The size of the market opportunity for final-stage produced water treatment systems is estimated at $4.3 billion for the next five years. This translates to 75% growth in the market for final-stage treatment equipment over the same period. The biggest growth driver is expected to come from aging installations that are experiencing high water cuts. Such installations could be prime candidates for produced water treatment system upgrades to manage increasing water volumes.

Installations in the 10- to 25-year age bracket are the most likely candidates for upgrades. Currently, there are about 3,269 offshore platforms that are in the 10- to 25-year age range.

The size of market opportunity for topsides-produced water reinjection systems is an estimated $9.9 billion. This number is largely attributed to the higher capital cost incurred in procurement and installation of topsides equipment. The analysis highlights that even though the percentage of produced water reinjected will increase during the forecast period (2009-2014), the market for produced water reinjection topsides equipment is expected to fall. This is the result of a moderation of construction activity, particularly in the Gulf of Mexico region, and the relatively lower likelihood of old installations opting to upgrade to produced water reinjection due to cost and technical considerations.