The goal of this project is to improve the efficiency of miscible C02 floods and enhance the prospects for flooding heterogeneous reservoirs. This report provides results of the first year of the three-year project that will be exploring three principle areas: Fluid and matrix interactions (understanding the problems): interfacial tension (IFT), phase behavior, miscibility, capillary number, injectivity, wettability, and gravity drainage. Conformance control/sweep efficiency (solving the problems): reduction of mobility using foam, diversion by selective mobility reduction (SMR) using foam, improved injectivity, alternating water and gas injection, and using horizontal wells. Reservoir simulation for improved oil recovery (predicting results): gravity drainage, SMR, C02-foam flooding, IFT, injectivity profile, horizontal wells, and naturally fractured reservoirs.