Economics of steam-assisted gravity drainage for the Nigerian Bitumen deposit

• An economic model constructed to assess SAGD feasibility for developing the Nigerian heavy-oil deposit.
• Impacts of both technical and non-technical risks on SAGD performance have been evaluated.
• There is more than 75% chance that SAGD would be an economic successful in Nigeria.
• There are options for mitigating SAGD risks in Nigeria.

Combining deterministic and probabilistic procedures, the economics and commerciality of steam-assisted gravity drainage (SAGD) for exploiting the Nigerian heavy-oil sands are investigated. Considering net present value (NPV) and value–investment ratio as the objective functions, the impacts of reservoir performance, costs, oil price and fiscal regime are evaluated. Within the range examined, reservoir performance, oil price, and expenditure profiles are found to be the primary determinants of project value and risks. For the case studied, SAGD has more than 75% chance of economic success (NPV>0), suggesting its attractiveness for the Nigerian bitumen deposit. However, potential risks are highlighted, and mitigation measures prescribed.