Performance and Economic Analysis of Closed-Loop Heat Extraction by Retrofitting Abandoned Vertical Oil Wells into U-Shaped Wells

Oilfield-associated geothermal energy represents a significant resource, and utilizing abandoned wells for heat extraction offers a promising and cost-effective approach to geothermal exploitation. This study proposes retrofitting two high water-cut vertical oil production wells into a U-shaped configuration to enable heat extraction via closed-loop water circulation. A numerical model is first developed to assess heat extraction performance, followed by an economic evaluation based on a net present value (NPV) model to determine the financial viability of this approach. The effects of various parameters on heat extraction and economic performance are systematically analyzed. The results indicate that repurposing high water-cut oil wells into U-shaped configurations for closed-loop heat extraction is a viable strategy to extend their productive life. For vertical wells with spacing of 218.21 m and an injection rate of 600 m3/day, the initial wellhead temperature of extracted hot water reaches 68.43°C, with a corresponding heat extraction rate of 891.89 kW. A higher water circulation rate enhances the heat extraction but slightly lowers the wellhead temperature, with diminishing returns at higher rates. While increasing the injection temperature raises the wellhead temperature, it reduces the temperature gradient between the reservoir and circulating fluid, leading to a modest decline in heat extraction efficiency. Proper insulation along the production section of U-shaped wells improves the wellhead temperature and enhances the overall heat extraction efficiency. Economic analysis indicates that in configurations with a shorter horizontal section and limited heat exchange capacity, a higher circulation rate may paradoxically extend the payback period and reduce NPV. Similarly, higher injection temperatures decrease economic performance by narrowing the effective temperature gradient. Systems with shorter horizontal sections achieve rapid economic returns, while those with longer sections require more time to reach optimal economic benefits due to higher initial retrofit costs. The findings of this study can aid decision-making for optimizing the economic feasibility of geothermal energy extraction through the repurposing of abandoned oil production wells.