Thermo-hydro-mechanical analysis of CO2 injection into deep aquifers

One of the biggest challenges for humanity is global warming and consequently, climate changes. Even though there has been increasing public awareness and investments from numerous countries concerning renewable energies, fossil fuels are and will continue to be in the near future, the main source of energy. Carbon capture and storage (CCS) is believed to be a serious measure to mitigate CO2 concentration. CCS briefly consists of capturing CO2 from the atmosphere or stationary emission sources and transporting and storing it via mineral carbonation, in oceans or geological media. The latter is referred to as carbon capture and geological storage (CCGS) and is considered to be the most promising of all solutions. Generally it consists of a storage (e.g. depleted oil reservoirs and deep saline aquifers) and sealing (commonly termed caprock in the oil industry) formations. The present study concerns the injection of CO2 into deep aquifers and regardless injection conditions, temperature gradients between carbon dioxide and the storage formation are likely to occur. Should the CO2 temperature be lower than the storage formation, a contractive behaviour of the reservoir and caprock is expected. The latter can result in the opening of new paths or re-opening of fractures, favouring leakage and compromising the CCGS project. During CO2 injection, coupled thermo-hydro-mechanical phenomena occur, which due to their complexity, hamper the assessment of each relative influence. For this purpose, several analyses were carried out in order to evaluate their influences but focusing on the thermal contractive behaviour. It was finally concluded that depending on mechanical and thermal properties of the pair aquifer-seal, the sealing caprock can undergo significant decreases in effective stress.

Valuing an offshore exploration project through real options analysis

This thesis applied real options analysis to the valuation of an offshore oil exploration project, taking into consideration the several options typically faced by the management team of these projects. The real options process is developed under technical and price uncertainties, where it is considered that the mean reversion stochastic process is more adequate to describe the movement of oil price throught time. The valuation is realized to two case scenarios, being the first a simplified approach to develop the intuition of the used concepts, and the later a more complete cases that is resolved using both the binomial and trinomial processes to describe oil price movement. Real options methodology demonstrated to be capable of assessing and valuing the projects options, and of overcoming common capital budgeting methodologies flexibility limitation. The added value of the application of real options is evident, but so is the method's increased complexity, which adversely influence its widespread implementation.