Canadian oil sands research keeps production competitive

By Jim Stott
Calgary Correspondent

The future of Canada's continuing capacity to produce and export oil lies in the massive oil sands deposits in the Fort McMurray region of northern Alberta. Recoverable reserves with current technology are estimated at more than 300 billion bbl of bitumen.

They are expected to play a key role in any North American continental energy plan.

Whether oil sands production meets its potential will depend heavily on the ability of a substantial, and often cooperative, research effort by industry, government agencies, and universities to find more efficient and economic ways to harvest, transport, and process the oil sands.

A number of major expansion projects are already under way by existing oil sands operators such as Syncrude Canada Ltd. and Suncor Inc. These, plus projects under development or on the drawing board, are worth an estimated $51 billion (Can.). Current oil sands production of about 600,000 b/d is expected to grow to 1.9 million b/d within a decade. Syncrude, already Canada's largest oil producer with production averaging 210,000 b/d, recently began planning a $4.1 billion third phase that will expand production 110,000 b/d by 2005.

Research has helped make oil sands and heavy oil recovery production costs competitive with conventional crude and other energy commodities. The consistent trend since the late 1970s, with some blips in the graph, has been a steady reduction in production costs, largely attributed to research efforts.

Syncrude, a six-company consortium, says there has been a steady decline in its production costs, from $25.81 in 1979 to $12.64 in 1999. Syncrude is experiencing an increase in costs to $17.45/bbl in 2000 and $21.02 in the second quarter of this year. The group attributes the increase to lower production, maintenance costs, and higher natural gas prices. The massive overhead costs of running an oil sands operation remain the same, even when production drops.

Syncrude spends more than $30 million/year on research and has a state-of-the-art research center in Edmonton with a staff of 90 persons.

Areas of research include analytical chemistry, bitumen chemistry, materials research, measurement and analysis, separation processes, slurry transport, and tailings management.

John Oxenford, Syncrude's manager of research programs, says one of the characteristics of Syncrude has been its ability to continually find ways to develop and implement technology.

"This has been one of the major contributors to our ability, and the oil sands industry in general, to contain and reduce costs year over year," Oxenford says.

"Many of the developments that have come from Syncrude's research have become standards for the industry."

Oxenford says two of the main thrusts of Syncrude research include materials handling and environmental issues.

He said oil sand excavated from the mine face originally was transported to a bitumen extraction facility by conveyors. Development of larger pumps, larger crushers, larger trucks, and a slurrying device called a cyclofeeder makes it possible to move oil sands by pipeline, with a significant cost saving. By 2003, virtually all oil sand will be moved by pipeline or hydrotransport.

Environmental research is focused on reducing energy intensity of processing, reduced emissions, reduced land disturbance, improved tailings disposal techniques, reduced bitumen losses, and improved reclamation. Environmental research becomes increasingly important as activity increases and standards are raised. Oxenford says a significant part of this work is being down through a University of Alberta program and intellectual property developed is placed in the public domain.

Syncrude is also actively involved in research programs with outside partners including the Alberta Research Council, universities, the National Research Council, and suppliers. Topics include materials research, development of catalysts, reducing energy consumption, bitumen conversion yield, and condition/risk-based maintenance.

A large volume of oil sands research by Syncrude, Suncor, and others is shared through the Canadian Oil Sands Network for Research and Development. CONRAD coordinates collaborative research between 15 industry members, five government institutions, two universities, and one industry association. It holds regular workshops to share research results.

Oxenford notes that Syncrude spends more than $350 million/year on maintenance. Studies suggest these costs can be reduced by up to 25% by moving from time-based maintenance practices to condition-based systems. He says 99.9% of data from operating equipment will usually show that conditions are normal. The challenge is to find the 0.1% that indicates a fault before it develops into a catastrophic failure.

Syncrude is also researching intelligent systems/process control, which will detect such problems as lost teeth from a shovel bucket. Some of this work will be done at the Centre for Intelligent Mining Systems to be opened this year at the University of Alberta's Computer Science Department.

Mike Singleton, director of technology planning and integration for Suncor, Canada's second-largest oil sands producer, says production costs that were above $30/bbl in the late 1970s are expected to drop below $10/bbl in the next 2 years. Suncor has estimated its leases contain recoverable reserves of more than 8 billion bbl.

"We believe that research and technology are key levers for the future to reduce our costs and improve environmental performance," Singleton says.

Singleton says fine-tuning changes to the bitumen upgrading process have contributed significantly to cost reductions and he expects many more improvements.

He says industry's switch from draglines to truck and shovel mining operations has cut costs significantly and equipment suppliers have done important research in this area.

Suncor research includes a planned pilot project this year on solvents and steam-assisted gravity drainage work at its Firebag lease.

Singleton says the company is investigating some proprietary upgrading technologies but much of the industry research is shared.

"We're pulling together. I'm not aware of another industry that pulls in mining technologies, bitumen extraction, and upgrading technology and puts them all together," Singleton says.

"That's the trick. There is cooperation between commercial operators such as Syncrude and Suncor, either through joint venture research or sponsored research at universities or CONRAD, formed to bring together these kinds of efforts."

Related Articles

ExxonMobil replaces 103% of 2013 production

02/21/2014 ExxonMobil Corp. replaced 103% of its oil and natural gas production last year with additions to reserves, mostly of crude oil and other liquids.

Hydraulic fracturing stuck in New York policy vacuum

02/01/2014 Persistent institutional indecisiveness by elected officials in New York State has placed the state in the position of not having a statewide polic...

Contact hails Kakwa Montney tight gas-liquids well results

10/16/2013 Contact Exploration Inc., Calgary, said completion of its fourth operated horizontal Middle Montney formation tight gas-liquids well extends the sc...

Watching Government: BC Premier's energy stance

10/14/2013 British Columbia will not budge on its requirements proposed heavy oil export projects must meet, Premier Christy Clark said on Oct. 4. But that do...

Cyclic steam, gas enhance Bohai heavy oil production

10/07/2013

This article presents preliminary results of stimulation principles and offshore oilfield testing of cyclic steam and gas stimulation.

Understanding the science behind induced seismicity

10/01/2013 For several decades in the US, earthquakes occurred at a steady rate of 21 events per year. Beginning in 2001, this rate began to increase and peak...

Wyoming delegation asks Jewell to exempt state from BLM fracing rules

08/20/2013 Wyoming’s congressional delegation asked US Sec. of the Interior Sally Jewell to exempt the state and others that already regulate hydraulic fractu...

Sunshine signs oil sands JV, slows West Ells work

08/20/2013 Sunshine Oilsands Ltd., Calgary, signed a framework agreement with an undisclosed international third party to pursue a joint venture involving its...

Promise vs. obstructionism

08/12/2013 North America's energy transformation has progressed on two important fronts outside the US, where revulsion toward nongaseous hydrocarbons increas...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected