Shell Backs GlassPoint Solar Oil Recover Technology

GlassPoint Solar Inc., which is building the first plant in the Middle East that will tap heat from the sun to coax heavy crude oil out of aging fields, obtained funding from a group including Royal Dutch Shell Plc.

California-based GlassPoint said Shell and RockPort Capital and others invested $26 million, allowing it to expand operations in Kuwait, Bahrain, and Oman. The three countries have sizable heavy crude deposits that require energy and technology to lift from the ground, said GlassPoint’s Chief Executive Officer Rod Macgregor.

The company plans to build local manufacturing plants for its equipment in countries where it will get contracts to reduce oil production costs.

“Shipping costs make a big part of our total costs and by moving production to the Gulf area we will save more and support local economies,” Macgregor said in an interview.

The company currently runs a 7-megawatt enhanced oil recovery plant, or EOR, spread over 4 acres. It injects 50 tons a day of steam into oilfields to loosen denser crude and allow it to move more freely to the surface.

Natural gas is traditionally the fuel used to heat steam for EOR projects. The scarcity of those deposits is making more nations consider solar as an alternative, Macgregor said. Oman uses 22 percent of its total natural gas output to generate steam and pump more oil from the ground, he said.

“Instead of exporting their gas, Gulf countries are using it produce more oil, and some countries are thinking about importing gas to use it for enhanced oil recovery,” he said.

Heavy Oil

GlassPoint is seeking work in Kuwait, where deposits in the northern fields and in the neutral zone shared with Saudi Arabia require extra energy to lift oil to the surface, he said.

Kuwait intends to boost output capacity by about a third to 4 million barrels a day by 2020 and maintain that level for about a decade by expanding its heavy crude deposits in northern fields, Kuwait Oil Co. Chairman Sami al-Rushaid said a year ago.

Chevron Corp. said last December it may invest $30 billion to $40 billion in an effort to add at least 5 billion barrels of crude reserves to an oil field shared by Saudi Arabia and Kuwait. It would inject steam in the reservoir.

“Chevron will need at some points in the future to rely on solar to generate enough steam for the project,” Macgregor said.

Tatweer Petroleum Co., a venture between Occidental Petroleum Corp., Mubadala Development Co. and state-owned National Oil & Gas Authority of Bahrain, plans to more than double declining crude and gas production at the Awali field in Bahrain at a cost of almost $1 billion a year through 2020.

“We are chasing contracts in Kuwait, Oman, and Bahrain, and we are getting positive response from clients,” Macgregor said. “Saudi Arabia and the United Arab Emirates are getting there too so it’s becoming the mainstream in the future.”

(Corrects headline in story that first moved on Dec. 11.)
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