Technical Heavy Oil Workshop - Alberta, Canada

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Royalties are paid to Alberta for each barrel of oil produced ... Heavy Oil. • API Gravity < 22.3. • Non-Thermal. • Lloydminster, Sparky, Dina, Waseca, McLaren ...
Technical Heavy Oil Workshop

Why Are We Here? • What is Canadian Heavy Oil Association? • Why are we here?

CHOA • 1700 individual members • Technical and networking opportunities • Education of members and general public • 25 years of volunteer support to our industry

What Does Alberta Offer? • Broad energy mix • Conventional & Unconventional Crude Oil • Conventional & Unconventional Natural Gas

• Balanced ‘regulatory’ framework that supports private & public investment • Heavy oil producer since 1938 • Evolved our industry through successful application of technology • ‘Well experienced’ service sector

Calgary/Edmonton • + 1,200,000 • Economy centered around petroleum, agriculture & tourism • Strong E&P/Services base

• + 1,200,000 • Provincial Capital • Government, Research & Manufacturing center of Alberta

‘World-Class’ Training & Research • Province has an exceptionally strong ‘high- learning’ educational base • Two major universities

‘public

research’

• Two major ‘technology & trades’ public institutions • Private/public research centers • All actively support heavy oil development in Western Canada

Global Reserves

52% Canada’s Oilsands

• Canada is a major world supplier • Alberta’s heavy oil (oil sands) are significant

Canadian Basins Northern Canada (Offshore)

Western Canadian Sedimentary Basin (WCSB)

West Coast (Exploratory)

Eastern Canada

Transportation & Marketing

Canada is the largest supplier of oil to USA, nearly 2 x Saudi Arabia

Alberta Regulations & Royalty Structure Regulations • Alberta resources are regulated by Energy Resources Conservation Board (ERCB) • Responsible for the production of all natural resources in the province • Strong ‘conservation & sustainability’ mandate • ‘Best-in-Class’ publically-accessible base data Ownership & Royalty • Alberta Crown (Public) owns the resources • E&P companies issued permits to explore and produce through ‘leases’ • Available to small private, large public & multi-national producers • Royalties are paid to Alberta for each barrel of oil produced • Royalty structure set up to encourage private investment in exploration, development , as well as research & development

WCSB Production Mix Leduc/Woodbend, Pembina Cardium, Swan Hills, Midale

Lloydminster Region, Bakken

Cold Lake, Athabasca, Peace River

Canadian Oil Production 2025 Total; 4.6 million barrels/day

2025 Total; 2025 Heavy Oil; 3.7 million barrels/day

Heavy Oil (by API Gravity)

• Heavy Oil API Gravity < 22.3 • High viscosity • Bitumen < 10 API

API = (141.5/sg)-131.5 sg = specific gravity @ 60 F

Oil Gravity & Viscosity

Heavy Oil/Bitumen Mix Unconventional • Bitumen < 10 API; high viscosity (ultra-heavy) • Thermal • Cold Lake & Athabasca Sand • Peace River Carbonates Conventional • Heavy Oil • API Gravity < 22.3 • Non-Thermal • Lloydminster, Sparky, Dina, Waseca, McLaren

Scale of the Oil Sands 250 miles

300 miles

S o urc e : A E UB R e s e rv e s a nd S upply D e m a nd O ut lo o k 2 0 0 5 C o urt e s y o f La ric ina E ne rgy Lt d.

• Large geographic area • Remote area of the province

Geology

Mannville Group,Middle/Lower Cretaceous

Middle Cretaceous (outcropped)

Oil Sands Projects

• Largest growing sector in the Canadian Economy

Oil Sands Projects • Surface Mining • In-Situ (SAGD, ES-SAGD, ICP)

• ( • Operating Projects: 1.765 M bbl/d (2012) • Mining – 0.883 M bbl/d • in-Situ – 0.882 M bbl/d Source: Suncor/PetroCanada

• Under Construction: 0.435 M bbl/d (Est. $17 B) • Regulatory Approved 1.590 M bbl/d (Est. $83 B • Waiting on Regulatory Review: 4.465 M bbl/d (Est. $190 B)

11/15-25-049-26W3/0

KB: 609.0 m RR: 1985-09-02 TD: 662.0 m [TVD] FormTD: DPRW Mode: Susp Fluid: Oil HUSKY MCLAREN A15 25 49 26

Lloydminster Heavy Oil Belt Type Log

450 ( 159.0 )

460.00

460.00

CEMSQ

CLNY 464.1 (144.9) [TVD] < U>

PERF

PERF JET

UMCL 470.7 (138.3) [TVD] < U>

Colony Member

CLNY 464.1 (144.9) [TVD]

• Lower and Middle Mannville Group

UMCL 470.7 (138.3) [TVD]

475 ( 134.0 )

McLaren Member

• Reservoir Description: Quartz sands, silts, shales and minor coal

WSEC 488.5 (120.5) [TVD]

Waseca Member

500 ( 109.0 )

SPRK 514.3 (94.7) [TVD]

SPRK 514.3 (94.7) [TVD]

Sparky Member

525 ( 84.0 )

GP 531.5 (77.5) [TVD]

GP 531.5 (77.5) [TVD]

REX 543.7 (65.3) [TVD]

General Petroleum Member

REX 543.7 (65.3) [TVD]

550 ( 59.0 )

LDMR 562.5 (46.5) [TVD]

Rex Member LDMR 562.5 (46.5) [TVD]

Lloydminster Member 575 ( 34.0 ) CMGS 579.0 (30.0) [TVD]

Cummings Member 600 ( 9.0 )

• Deposition: 3-5 m thick blanket sands (Lindbergh) to 35m thick channel sand (Bodo) • Stacked reservoirs; 30 -90m apart separated by intervening water-bearing silts and clay shales • Porosity: 28-32% • Permeability Range: 5-15 D • Lag gravels with high perm. averaging 1-4 D • Average Permeability: 2D

CMGS 579.0 (30.0) [TVD]

DINA 599.5 (9.5) [TVD]

Mannville Group

WSEC 488.5 (120.5) [TVD] < S>

• Sw: 15% • Typical Depth: 500- 560 m deep

DINA 599.5 (9.5) [ TVD]

• No free gas Dina Member

625 ( -16.0 )

• Initial Pressure: 4-6 mPa (somewhat under-pressured) • Reservoir Temperature: 20-25 deg C

DPRW 647.5 (-38.5) [TVD]

DPRW

647.5 (-38.5) [TVD] 650 ( -41.0 )

Devonian 670.00

670.00

• Viscosity: 1000-12,000 cp

History of the ‘Lloydminster Heavy Oil Belt (HOB)’ • Lloydminster oil production started in late 1920’s, difficult production (sand) • Incentives created in the 1940’s promote development; first refinery built in Lloydminster area • Production starts to ramp-up in the late 1940’s; light oil discovered at Leduc • Lloydminster refinery tied into Inter-Provincial Pipeline in early 1960’s • Sand production continued to great impair productivity; developed screen/gravel pack technology • Sharp increase in oil prices in 1970-1980’s lead to great interest in HOB reserves • PCP pumping technology developed in 1980’s • Cold Lake production starts in 1985 • Upgrader capacity built in late 1980’s • CHOPS recovery technology evolves through high volume pumping technology • High commodity pricing has helped sustain technology development (solvent, caustic, etc))

Conventional Heavy Oil Development • Industry has evolved through continuous innovation

Upgrading Capacity Added CHOPS

• Supported by strong oil prices over recent years

PCP

Primary Production

Local Refinery

Horizontal Drilling

Solvent, Caustic Floods, Optimization

Challenge for Conventional Heavy Oil • Oil Sands offer large volumes/reserves, but are capital intensive • High number of suspended ‘conventional’ heavy oil wells;