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Featured Articles
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Apr 2006
| Source: Oilweek Magazine
| | | Planning for the future
| | | Oilsands research needs to take new directions if full potential is to be reached
| | | Deborah Jaremko
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| The world is buzzing about Alberta’s bitumen, but the development currently underway is nothing compared to the ultimate potential of this resource if the "inaccessible" deposits can ever be unlocked. This includes resource in the so-called "Carbonate Triangle" of northeastern Alberta, a large bitumen bearing area that was under the radar until early February, when mysterious company 1122131 Alberta Inc. spent $465 million to buy in.
Outside of the oilsands sweet spots where today’s operations occur, there is an estimated 930 billion barrels of resource in the ground. However, efficiently accessing it may be even harder than the decades of research and development it took to bring the industry to its current level.
"All of this has happened because of innovation and creativity," says Dr. Soheil Asgarpour, oilsands business unit leader with the Alberta Department of Energy. He explains the co-operation among industry players combined with government support that initially made the oilsands a commercial reality is needed once again to create new step changing technologies, taking oilsands exploitation far beyond where it is today. "We have to do the same thing we did 20 to 30 years ago."
He says combined, government and industry in Canada only spend about $100 million per year on oil and gas research, and that has to change.
"We are not spending enough money on research and development. We need to increase investment, and also use those dollars efficiently."
Asgarpour was addressing attendees at a March technology forum presented by the Petroleum Technology Alliance of Canada (PTAC), an event intended to kick start the development of a technology roadmap for inaccessible bitumen.
"We need to develop a roadmap together and implement it together," he says.
There is a substantial amount of bitumen in Alberta that is currently considered uneconomic in comparison to the already massive amount of recoverable resource. There is an estimated 447 billion barrels in carbonate formations, 400 billion in reservoirs that are considered to be too thin, 36 billion in reservoirs with insufficient cap rock, 27 billion in reservoirs considered too deep for mining but too shallow for steam assisted gravity drainage, and 14 billion barrels with a low pressure gas cap that makes SAGD inefficient. As well, there are small deposits in Saskatchewan and significant volumes of bitumen left behind in existing tailings ponds.
"There are 40,000 barrels of oilsand that ends up in tailings ponds every day," Asgarpour says. "Clearly we have many resources we do not have the technology to develop."
With 447 billion barrels of original bitumen in place, the Carbonate Triangle will likely be a major focus in the future. In early February, 1122131 Alberta Inc. made waves across the industry with its carbonate land grab, buying into a region of the triangle that has yet to see a drilling rig.
"No wells have been drilled in that area," says Greg Stringham, vice-president of markets and fiscal policy for the Canadian Association of Petroleum Producers. "(The purchase) was certainly a step out from where the mainstream industry is looking at."
The Carbonate Triangle is estimated to contain as much as 12 to 15 per cent of the viscous oil in Alberta, says Dr. Maurice Dusseault, renowned heavy oil specialist and professor of geological engineering at the University of Waterloo. He explains the oil was placed by up-dip migration from deep in the basin, but instead of migrating into the Cretaceous sandstones that contain the vast heavy oil and bitumen resource base in Alberta, the oil was trapped in the older and deeper Devonian and Triassic rocks. The API gravity of the oil can be low as four degrees, but with 447 billion barrels in place, carbonates could potentially add a substantial amount to oilsands production.
"The size of that prize is huge," says Pat McLellan, president of Advanced Geotechnology.
Although to date much of the interest in carbonates has focused on the Grosmont formation, which underlies the Athabasca oilsands, producers are currently targeting the resource in other areas. Last March, BlackRock Ventures announced a new heavy oil discovery at Chipmunk, in the Peace River oilsands deposit.
BlackRock and partner Talisman Energy reported successful completion of three vertical wells producing a combined 960 barrels of 11 degree API oil per day from three separate reef-like structures in the Mississippian formation. Based on over 450 kilometres of 2D seismic, the company has identified 78 reef-like anomalies on 65,000 acres of working interest land along a 32 kilometre linear trend. BlackRock says Chipmunk appears to be the first sustained high-volume production of viscous bitumen from carbonate rocks in Canada without the use of steam.
"It is commercial and it is happening right now," says president John Festival. "People never thought that oil would flow."
Husky Energy is also currently chasing carbonate bitumen, in the Grosmont formation in the Saleski area. The company says there is close to 17 billion barrels of original bitumen in place and plans to drill resource evaluation wells on its properties during 2006.
"It’s at very preliminary stages right now," says Husky spokesman Colin Lucik. "They are just trying to understand the resource."
Husky’s Saleski lands are nearby the purchases made by 1122131 Alberta Inc. Some of the parcels are even contiguous with Husky property.
"It’s just to the northwest," Lucik says, adding that the area presents a large resource but will take time to develop.
In the 1980s, the Carbonate Triangle saw a few pilot projects. At Buffalo Creek, with funding from the Alberta Oil Sands Technology and Research Authority, Unocal and Canadian Superior Energy conducted single well stimulation on the Grosmont, achieving production rates up to 440 barrels per day. The project went on from 1980 to 1986, and in 1983 was expanded into the Mclean pilot, a multiwell pattern of steam drive from a central injection well. That project also ended in 1986.
Around the same time, Chevron conducted a pilot in the Algar area, and Pembina Resources briefly operated a cyclic steam stimulation pilot on the Pekisko formation in the Peace River oilsands. Just like the reservoir characteristics of the carbonate triangle, Portfire Associates president Marc Godin says the outcomes of the Grosmont pilots varied substantially.
"They had spectacular but very erratic results," he explains, adding a large part of the challenge is the heterogeneity of the reservoir. "It is not uniform in bitumen accumulation. Saturation is very high, which leads to problems with permeability."
The carbonates are also characterized by a dual porosity system, where tunnels or "vugs" as large as ten centimeters in diameter are present, and the bitumen is found within the matrix itself. The vugs present a challenge for drilling operations, at times causing the drill bit to drop when passing through.
"The irregular network of vugs can lead to a loss of mud circulation while drilling," Godin says, adding it also presents a challenge for placing wells. "It is difficult to bond the well in place (with cement)."
Although the vugs have the potential to make drilling and well construction difficult, Advanced Geotechnology president McLellan says if the reservoir characteristics are well understood the issue could be managed.
"Natural fractures are going to play a key role."
He explains that over the last couple of decades industry has learned a significant amount about natural fracture networks, and how to create them. Technology now allows fractures to be extensively examined, looking at characteristics like spacing, filling and aperture.
"The advent of image logs has really changed the way we view fractured reservoirs. It’s more than just a picture of what the fractures look like."
Because the reservoirs are so heterogeneous, McLellan explains monitoring will also likely have to be used for effective production, which will inevitably involve the injection of a solvent or steam. This could be done using microseismic, which is already used in cyclic steam stimulation operations around Cold Lake so that operators can understand the changes happening under and on the ground. The CSS process is of such high pressure the ground is actually raised and operators must keep a close eye on the dilation.
"This is the sort of technology, tweaked and modified of course, for a carbonate setting that we’re going to have to look at," he says.
PTAC says developing technologies to successfully produce the vast amounts of carbonate bitumen in Alberta is likely a long term challenge for producers, and a larger future prize to look towards than other "inaccessible" deposits.
In order to help direct future research, PTAC is proposing a phased technology road mapping project, with an initial "high level" phase funded by Natural Resources Canada. Resources will be assessed to define potential size, technical extraction and greenhouse gas emissions challenges.
"What we are really talking about is trying to expand the bitumen and heavy oil resource base," says Bruce Peachey, president of New Paradigm Engineering. Peachey has been providing technical support to PTAC for a number of years, and New Paradigm is a founding member of PTAC.
The organization says that since these are new areas of investigation, the high level roadmap is needed to stimulate near-term exploratory work before a more detailed effort can be undertaken. Based on initial work, PTAC anticipates that additional funding can be generated by engaging the governments of Alberta and Saskatchewan, and in-kind support from producers and other organizations. Peachey stresses the research involved with unlocking unconventional bitumen is a long term effort.
"You can’t do research in three months and get the best solution. If you want to make significant changes you have to allow more time for research to happen."
Work on the roadmap began in October 2005, and Peachey says a final report should be issued by the end of April. It is expected the document will be available on the PTAC website by the end of May.
Portfire Associates president Godin says the oilsands is well suited to this kind of long term research and development, as it does not deplete as fast as conventional sources.
"It takes five to 10 years to develop and commercialize an invention. You are investing, you’re putting money into the thing and hoping to have another five to 10 years to try it out. You have to have a time scale of 10 to 20 years, and the oilsands offers that," Godin explains. "There will be oilsands here 100 years from now being exploited."
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