Economic Evaluation of EOR Project Based on Options Differential Equation Method

China began to research the tertiary oil recovery process from the 1980s. This technology is very mature in the current, but the economic benefits for the EOR project evaluation studies are relatively less and simple, moreover, the evaluation method is single, almost all enterprises have chosen to use net present value method. But net present value method ignores the flexibility which is managed by the decision-makers under uncertainty, not suitable for oil field development investment project evaluation. Real option valuation and strategic decision-making are an important way of thinking, often used in the evaluation of oil exploration, but for oil and gas production, dynamic process of evaluation studies are rarely involved. As the EOR project has the option characteristics, this article will introduce the idea of real options to the EOR project and try to establish the differential equation model of the EOR project evaluation. Differential equations are used for tertiary oil recovery project to analyze the option value.