Posted on 10/28/2009 5:07:18 AM PDT by thackney
The Alberta firm that put “fire in the ground” oil production on the map with successful tests in a Athabasca bitumen deposit opened operations in Saskatchewan on Tuesday.
And what it hopes to learn at this second test site for toe-to-heel air injection (THAI) — this time in a conventional heavy oil deposit which runs south from Lloydminster into the Kerrobert, Sask. area, east of Hardisty — could help Petrobank tap into a global market.
“Most of the world’s heavy oil is similar to what is found in the Alberta/Saskatchewan belt, so what we learn from Kerrobert will have implications in many countries, from Venezuela and Colombia to China and Russia,” said Chris Bloomer, Petrobank’s vice-president in charge of heavy oil.
Petrobank already has oil operations in Colombia, and plans to market THAI technology worldwide.
“And for both Alberta and Saskatchewan, there is a tremendous resource still in the ground,” he said.
Since conventional methods can only produce 10 per cent of the oil in place, Petrobank estimates there are 20 billion barrels of oil in Saskatchewan that can be recovered, and a similar amount remains to be produced in the Alberta heavy oil zone.
At a ceremony in Saskatoon on Tuesday, Saskatchewan Premier Brad Wall said the Kerrobert THAI project “is the type of sustainable innovation that will help (this province) to continue to move forward.”
Petrobank, which is partnered with Baytex Energy Trust on the 50/50 joint venture, recently sunk two vertical air injection wells and two horizontal production wells into the extensive Mannville channel conventional oil reservoir near Kerrobert.
Compressed air was added last week after a temporary steaming of the ground to mobilize the oil around the injector site. With the addition of the air, spontaneous underground combustion has begun.
“I think we will see some oil as early as today,” said Bloomer.
Petrobank’s Whitesands project near Conklin was the first to use the patented THAI process, which it says is a major improvement on the widely-used water-intensive steam-assisted gravity drainage (SAGD) systems.
THAI uses underground combustion to heat the bitumen or oil, and the combustion front pushes the oil and gases to the surface through the horizontal production pipes.
Petrobank has spent millions trying to master the system, developing new slotted pipes and catalyst-lined systems to prevent clogging from fine sand particles and begin to upgrade the oil.
“Whitesands was a challenging site, but we felt if the technology worked there it would work anywhere,” said Bloomer.
Whitesands sits over a shallow oilsands zone of between nine and 12 metres, compared with a zone of up to 30 metres at Kerrobert, which is much less viscous and has been produced by pumping alone.
“In the heavy oil areas, we are looking at secondary production, of going back into fields where 10 per cent of the reserve has already been produced. In the Athabasca bitumen zone, the sites are all green fields,” he said.
Petrobank has a third project underway, the Dawson site in the Peace River region of Alberta under a joint venture with Shell.
“That would represent the third trial in a different deposit. Dawson is a higher quality reserve than Whitesands, but not as high as Kerrobert. But THAI will work well in all three types of deposits,” said Bloomer.
Petrobank waited for months longer than expected for its Whitesands approval, and is still waiting for Dawson.
By comparison, Kerrobert was approved by the Saskatchewan government in just 56 working days.
“I think that speaks volumes about the system in Alberta, which is using the bitumen mining model for approvals rather than the conventional oil model. I think they have to change this approach,” said Bloomer.
Petrobank’s first commercial project will be May River, situated beside Whitesands. It’s an initial $250-million, 10,000 barrels-per-day operation which could expand to 100,000 bpd for a total cost of $2.5 billion, giving it the same output as the initial phase of Imperial’s $8-billion Kearl oilsands mine project.
Regulatory approval for May River is expected early in 2010.
I can think of a formation...
probably the only good thing about Socialism is that when your government gets to spending money hand over fist, they cannot afford to let environmentalism get in the way of their revenue streams
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