Showing posts with label oilsands. Show all posts
Showing posts with label oilsands. Show all posts

Friday, February 19, 2010

Planned Decadal Oil Production






This item sketches the apparent emerging oil production picture over the next decade.  The surprise is the expected levels of production out of Iraq.  I would like to believe them except that they arrive rather conveniently to reassure us all that there is no problem with oil supply.  The point is that we are been promised around 12 million barrels per day by the end of the decade.

 

The decline of current production is not predicted at all by anyone.  My own best guess is no guess at all except to say it could be fairly modest which is rather unlikely to massively catastrophic which is also unlikely.  The projected new production is around fifteen percent of current production over the next decade.  Yet all historic major fields are well into decline.

 

As I have stated in the past present production levels are not sustainable even with what is promised.  We need to be under 50 million barrels fairly soon.  The question is if we will be ahead of the curve or if we will be forced.

 

I do not know if we risk a present decline of twenty million barrels per day or not over the next decade.  Historical comparables suggest that it is so.

 

On a more upbeat note, enhanced production using THAI can make up any short fall by the end of the decade by producing deeper heavy oil everywhere.  Burning oil can remain an option for a couple of decades or more yet.  The pricing structure however will drive the development of every likely alternative and this will be a transition period.

 

The good news is that the transition may continue to be fairly smooth.

 

Latest Canadian Oilsand Production Growth Forecast and Summarizing Main World Oil Production Growth Sources

FEBRUARY 10, 2010

 

 




Adding Significant Oil in Iraq, Brazil, Canada and the United States

Canada will be adding a little of 1 million barrels of oil per day from now to 2020. More could be added if oil prices stay strong.


Canadian Oilsand


Economics coming into line for some projects
-Driven by stronger oil prices and lower costs
-Projects under construction:
Imperial Kearl Lake
•Shell Jackpine and Shell upgrader including Quest CCS project
-Projects Re-activated
•Suncor Firebag Phases 3 and 4
Devon Jackfish Phase 3 application in 2010
Cenovus Christina Lake –application for phases E, F, G
•ConocoPhillips/Total –Surmount phase 2
•Husky/BP –Sunrise phase 1





-Enhanced Oil/Tight Oil
•Technology enabled plays such as the Bakken, Cardium and Viking (multi-frac horizontal wells)
•Narrow Light/Heavy Differentials
-Good news for heavy oil projects
-Tough for stand alone upgraders in the short term
•Competing against existing capacity left empty by Venezuela and Mexico



Friday, February 29, 2008

Malcolm Greave’s THAI toe and heel air injection heats up

It is rare to see a professor come out and cheerlead a new technology, even if he is the father of the process. In this case it seems a well earned right. THAI or toe and heel air injection is proving to be far better than anticipated and making the projected improvements much more probable.

This article was published a couple of months ago and this last week we have also seen the THAI story been told on the national news. I have been keeping a watchful brief on the pilot test from before it got funded. This is actually a remarkable discovery, and its real success infield is wonderful. Personal experience kept me cautious until I saw the early production results. We all can now throw that caution to the wind.

I believe that this will also access huge reserves of conventional oil that is now classified as dead oil. Of course a lot of those fields will have to be dried out. However, any sandstone based reservoir that is reasonably thick should be exploitable. You will notice particularly that they are quoting an amazing 70% to 80% recovery and in well catalytic upgrading to as high as 26 api. Of course, they are now getting a bit over the top. However, I certainly can anticipate resources for which these levels may be possible.

In fact, I suspect that a lot of oil companies will be rather sorry that they ever used water floods at all. For the layman, natural flow will deliver up to perhaps 40% of in place oil. The truth is that this is more like 30 to 35%. Water floods will sweep out maybe another 15%. This means that generally, half of the original oil remains behind. And it is rather unlikely that a wet formation can be made to work with this method, although I reserve the right to be surprised.

The power of this method comes from the fact that the air is under pressure permitting the development of a 600 degree burn zone. This is hot enough to encourage reforming of the oil, to say nothing about its liquefaction. On top of that the combustion product is CO2, CO and steam (H2O) as well as entrained nitrogen. All these gases except H2O dissolve into the oil itself helping to improve its viscosity. These gases also dissolve into the water helping to break the oil free of the sand itself.

The only escape for all this heat is with the production fluid itself or through a very slow leaking into the surrounding non porous sediments. This is also true of the production gases which will tend to penetrate the formation ahead of the burn front speeding the process up.

I expect that it will be possible to set up a 100 well burn front within the formation that will obviate any need for pillars or untreated zones between burns. It also seems that as the burn front gets a fair distance down the formation, it will be good practice to place additional injection wells at the burn front and seal the older wells.

In fact there is little reason not attempt to treat one hundred percent of the formation with a closely managed burn front that is moved slowly along with additional production and injection wells placed as needed.

I am particularly encouraged with the experiments starting with using 3d seismic mapping to follow the location of the burn front. If this works, then it will be possible to almost micro manage the system.

The real payoff with this system is that it uses drilling industry resources which are sufficient and fully in place in Alberta to swiftly add a million new barrels of production every year. Each well pair will pump out 1000 barrels per day. With air injection and a full sand handling system, they are not cheap, but they are not unusual and will certainly meet the industry standard of a three year payback with absolutely no discovery risk.

Since this all works best on oil that is likely below the mining zone, we have likely added all of Canada’s oil sands to the world’s oil inventory. I believe that this will easily exceed one trillion barrels, though up to now measurement has never been much of a priority. I also remember seeing a map once in which the tar sands were shown to extend far north along the McKenzie Valley. I think every one just gave up once they found a trillion. I suspect accurate measurement just became important again.

Toe-to-Heel Air Injection (THAI™) System

Published Thu, 2007-11-29 16:08 Energy

A new method developed in Britain over the past 17 years for extracting oil is now at the forefront of plans to exploit a massive heavy oilfield in Canada.

Duvernay Petroleum is to use the revolutionary Toe-to-Heel Air Injection (THAI™) system developed at the University of Bath at its site at Peace River in Alberta, Canada.

Unlike conventional light oil, heavy oil is very viscous, like syrup, or even solid in its natural state underground, making it very difficult to extract. But heavy oil reserves that could keep the planet’s oil-dependent economy going for a hundred years lie beneath the surface in many countries, especially in Canada.

Although heavy oil extraction has steadily increased over the last ten years, the processes used are very energy intensive, especially of natural gas and water. But the THAI™ system is more efficient, and this, and the increasing cost of conventional light oil, could lead to the widespread exploitation of heavy oil.

“The world needs to switch to cleaner ways of using energy such as fuel cells,” said Professor Malcolm Greaves, who developed the THAI™ process.

“But we are decades away from creating a full-blown hydrogen economy, and until then we need oil and gas to run our economies.

“Conventional light oil such as that in the North Sea or Saudi Arabia is running out and getting more expensive to extract.

“That’s why the pressure is on to find an efficient way of extracting heavy oil.”

THAI™ uses a system where air is injected into the oil deposit down a vertical well and is ignited. The heat generated in the reservoir reduces the viscosity of the heavy oil, allowing it to drain into a second, horizontal well from where it rises to the surface.

THAI™ is very efficient, recovering about 70 to 80 per cent of the oil, compared to only 10 to 40 per cent using other technologies.

Duvernay Petroleum’s heavy oil field in Peace River contains 100 million barrels and this will be a first test of THAI™ on heavy oil, for which THAI™ was originally developed. Duvernay Petroleum has signed a contract with the Canadian firm Petrobank, which owns THAI™, to use the process.

The THAI™ process was first used by Petrobank at its Christina Lake site in the Athabasca Oil Sands, Canada, in June 2006 in a pilot operation which is currently producing 3,000 barrels of oil a day. This was on deposits of bitumen - similar to the surface coating of roads - rather than heavy oil.

Petrobank is applying for permission to expand this to 10,000 barrels a day though there is a potential for this to rise to 100,000.

The 50,000 acre site owned by Petrobank contains an estimated 2.6 billion barrels of bitumen. The Athabasca Oil Sands region is the single largest petroleum deposit on earth, bigger than that of Saudi Arabia.

Professor Greaves, of the University’s Department of Chemical Engineering, said: “When the Canadian engineers at the Christina Lake site turned on the new system, in three separate sections, it worked amazingly well and oil is being produced at twice the amount that they thought could be extracted.

“It’s been quite a struggle to get the invention from an idea to a prototype and into use, over the last 17 years. For most of the time people weren’t very interested because heavy oil was so much more difficult and expensive to produce than conventional light oil.

“But with light oil now hitting around 100 dollars a barrel, it’s economic to think of using heavy oil, especially since THAI™ can produce oil for less than 10 dollars a barrel.

“We’ve seen this project go from something that many people said would not work into something we can have confidence in, all in the space of the last 18 months.”

Professor Greaves, who was previously Assistant Professor at the University of Saskatchewan in Canada, and who also worked with Shell and ICI in the UK, is looking at making THAI™ even more efficient using a catalyst add-on process called CAPRI™.

This process was also developed by Professor Greaves’ team at Bath and is intended to turn heavy oil into light while still in the reservoir underground. The CAPRI™ research has recently been awarded funding of £800,000 from Engineering and Physical Sciences Research Council, including £60,000 from Petrobank. The project collaborators are Dr Sean Rigby, from the Department of Chemical Engineering at Bath, and Dr Joe Wood of the University of Birmingham.

Source: University of Bath

Tuesday, August 14, 2007

THAI proclaimed a success

A couple of bits of rather interesting news on the energy front lately.

Algeria is building out a solar energy plant in the Sahara that will be able to supply power to 4,000,000 homes. The method will be parabolic trough mirrors concentrating the energy on a fluid holding tube. This is very conventional and will be combined with a natural gas plant, obviously to even out the energy flow. The field will cover 45 football fields.

The output will also be tied into the European grid. There is plenty of room for expansion and the project is big enough to induce a drive for maximum efficiency.

Much more interesting on the oil front, is that the operators of the THAI pilot test in the Oilsands of Alberta have proclaimed it a success. It has been operating for a year now and many problems have been worked out. The method consists of running a horizontal production well along the bottom of the formation for perhaps a thousand meters and then drilling an air injection well vertically to the toe area or end of pipe. Air is injected under pressure until ignition is achieved. This creates a char front that releases the remaining oil into the production well. I have been watching this with interest for two years.

Its success opens the door for the exploitation of all the deeper oil sands without the need to burn natural gas to produce hot water or steam. And a production rate of 1000 barrels per day suggests that we can go quite deep.

Up to now, published reserves have been limited to oil available to mining and shallow SAGD prospects. We can expect the SAGD prospects to be converted to THAI prospects and a major increase in suddenly economic deeper reserves to be added.

Canada may turn out to have (a fair guess only) a trillion barrels of recoverable oil because of this technique. It will still take decades to roll out. Also there are a lot of abandoned heavy oil discoveries around the globe that can now be revisited with this technique.

We know that oil supply is getting visibly very tight and that we cannot alleviate it any longer by simply pumping faster. This means however, that at least North America can engineer a soft landing. The bad news is that most of those other global resources are in decline or at least on the edge of decline. If you want to scare yourself to death, look at the decline of North American production after the peak in 1972.

Investing full out we might be able to stand still in the current regime. Yes folks, we need to lick the algae problem.