Global energy demand is on the rise while efforts are being undertaken to increase the share of renewables to the energy mix. Even though, it is expected fossil fuels will remain an important contributor to meet this demand in the following decades. This can be attributed to the existing infrastructure, fossil fuels abundance, their energy density and ease of distribution.
As of today, in the oil and gas industry, competing oil-recovery techniques are screened and evaluated with cashflow based methods such as the Net Present Value rule. This method is entirely based on economics and may neglect important aspects related to the techniques. If fossil fuels will still be produced, their contribution to climate change should be mitigated. This can be achieved by considering the efficiency of the techniques employed for extraction. Additionally, the oil and gas industry is subject to uncertainty as the oil price is volatile, as has been observed in the past few years. In order to evaluate competing techniques, it is advisable to also consider the impact of this uncertainty in their evaluation.
In this thesis, the applicability of two concepts for the screening of competing oil-recovery techniques is explored. The thermodynamic efficiency is assessed with the use of Exergy analysis and the uncertainty on the price of oil is considered through the use of Real Option theory.