Investigating the impact of the future carbon market on the profitability of carbon capture, utilization, and storage (CCUS) projects; the case of oil fields in southern Iraq

Carbon capture utilization and storage for enhanced oil recovery (CCUS-EOR) is considered a promising solution to meet future global energy needs while significantly reducing carbon dioxide emissions. However, the future growth of CCUS-EOR is uncertain due to the global economic recession and low oil prices. This research analyzes the impact of uncertain oil and carbon market prices on the economic value of a CCUS-EOR project which contributes to appropriate investment and future policy decisions. To explore the potential trade-offs between available carbon dioxide (CO2) quantities for trading or injection for enhanced oil recovery, the market's trading mechanism is analyzed by predicting future oil and carbon prices. The forecasted market prices are then used in an optimization model to estimate the optimal cumulative cash flow from implementing a proposed CCUS-EOR project to capture CO2 from the Hartha power plant located in the southern Basra Province of Iraq, considering three different oil fields of Rumaila, Nassriya, and Noor. The results revealed that the profitability of the proposed CCUS-EOR project is affected by both oil and carbon market prices, and a higher carbon price is needed to compensate for the financial setbacks, resulting from reduced oil prices. The research also features the strategic decision-making of oil fields across different sizes in response to various price scenarios. The medium-sized fields consistently prioritize carbon injection for enhanced oil recovery (EOR) over market trading. In contrast, small and giant fields adapt their approach based on the prevailing market price dynamics.