In the immiscible displacement of oil by carbon dioxide gas, the solubility and diffusivity of carbon dioxide are important factors that determine the efficiency of the process, because an increase in the carbon dioxide solubility and diffusivity into oil leads to an increase in oil recovery. It is shown by experimental studies that the solubility and diffusivity of carbon dioxide into oil are governed by the saturation pressure, reservoir temperature, composition of the oil and purity of the gas. The solubility and diffusivity of carbon dioxide into Aberfeldy heavy oil were measured, using impure carbon dioxide gas containing nitrogen as the main contaminant gas. It was noted that increasing the concentration of nitrogen in the carbon dioxide stream decreased the solubility and diffusivity of carbon dioxide in oil, consequently leading to a reduction in the swelling of the oil by carbon dioxide. Displacement experiments were also conducted to observe the effect of using impure carbon dioxide in place of pure care bon dioxide in the immiscible displacement WAG process. It was noted that the presence of nitrogen in carbon dioxide adversely affected oil recovery by the process and that increasing the nitrogen concentration up to 30 mole% could result in 10% loss in oil recovery.