The mobility ratio, which controls the sweep between the injected gas and the displaced oil bank in a gas injection process, is typically highly unfavorable due to the relatively low viscosity of the injected CO2. This difference makes mobility and consequently flood profile control the biggest concerns for the successful application of CO2 flooding. This led to the development of the Water-Alternating-Gas (WAG) process as a means of controlling the flood profile. The higher microscopic displacement efficiency of gas combined with the better macroscopic sweep efficiency of water significantly increases the incremental oil production as compared with waterflooding. Important technical factors affecting WAG performance that have been identified are heterogeneity, flow geometry wettability, miscibility conditions, injection techniques, and WAG parameters. My MSc research has aimed at studying the effect of the WAG ratio, CO2 slug size, and CO2 injection rate on oil recovery efficiency in heterogeneous system. I compared the recovery efficiency observed in a series of simulation runs using a compositional simulator with the Peng-Robinson equation of state (EOS).These sensitivity runs were performed by assuming four WAG ratios, four CO2 slug sizes, and four injection rates. An up-scaled SPE 10 comparative solution project model was selected for the compositional simulation as a heterogeneous system. My results indicate that the recovery obtained using the WAG process is a function of the injection rate as well as the WAG ratio and the CO2 slug size. These control the final spatial oil distribution and the displacement front given the permeability structure of the reservoir. The larger the CO2 slug size the greater the cumulative oil recovery, but at a certain value (optimum slug size) the incremental improvement of recovery gets smaller and smaller and in some cases recovery even decreases. The best cumulative recovery is obtained at a WAG ratio of 2:1. At the same slug size and WAG ratio, increasing the injection rate decreases total oil recovery. The cumulative oil recovery obtained by continuous CO2 flooding was in some cases 29 % low comparing to the WAG scheme. My research shows that without simulation it is not possible to predict and optimize WAG for a heterogeneous system.