Conoco Inc. is near agreement on terms of a joint venture with Maraven SA to start developing 55,000 acres in the 360,000 acre Zuata area of the Orinoco tar sands belt in Venezuela.
Venezuela's congress approved the joint venture in 1993 (OGJ, Aug. 23, 1993, p. 22). Conoco hopes the agreement with Maraven will take final form early in 1995.
J.L. Stalder, a Conoco engineering professional, outlined the project status during a Society of Petroleum Engineers meeting in Houston.
Stalder said the joint venture could start drilling in 1996 with first production as early as 1997. The $1.7 billion, 35 year project includes a $1 billion dollar upgrader with a delayed coker process to convert 9.5 gravity heavy oil to a 20-23 gravity syncrude.
Construction of the upgrader, on the Venezuelan coast, is to start in 1997. The plant will include a hydrotreater to stabilize the crude, and export tankers will have a nitrogen blanket to maintain crude stability during shipment.
Conoco expects to produce 65,000 b/d of heavy oil for 3 years during Phase I of the project. Plans for Phase 2, the remaining term of the joint venture agreement, call for a 120,000 b/d field production plateau with the upgrader turning out about 104,000 b/d of syncrude.
Conoco has the refining infrastructure along the U.S. Gulf Coast, mainly at its Lake Charles, La., refinery, to handle this type of crude. Therefore, Stalder said, more expensive technology required to upgrade to a 33 gravity syncrude was not needed.
About 3,000 metric tons/day of solid coke produced by the upgrader will be sold to a Conoco subsidiary, Louisiana Carbon, that will resell it mainly to burn with coal in U.S. electrical power plants.
Two pipelines will connect the field to the upgrader. One will carry heavy oil mixed with about 20% diluent. The other will return the diluent, a 40-50 gravity naphtha, from the upgrader to the field.
DRILLING, PRODUCTION
Maraven has drilled more than 200 wells on the Zuata block on about 5-8 km spacing to delineate the reserves. It also has conducted a production pilot.
The joint venture initially plans to drill about 200 wells. The number later will increase to 1,200 to maintain the targeted 120,000 b/d plateau needed by the upgrader during Phase 2.
Drilling will take place from pads with slant wells having a 400 m bottom hole spacing, or about 35 acres/well. Horizontal wells are also being considered. Gravel packing is likely, although some horizontal wells in the region are not gravel packed and produce without problems. Periodic well workovers are expected.
The heavy oil lies at about 2,000 ft.
Conoco plans to use cyclic steaming to boost production rates. Some wells in the area have initial cold rates of 150-600 b/d, with some pumping as much as 1,000 b/d.
Stalder said this unexpected high mobility may be due to compaction drive in the unconsolidated sands or a "foamy oil mechanism," retained gas in the heavy oil. Another possible explanation is that reservoir permeability is much higher than the 10 Darcies maximum laboratories can measure. Well tests indicate possible effective permeabilities that range as high as 20-30 Darcies.
To generate steam, a nearby Maraven gas reservoir will supply fuel for the project. As the heavy oil reservoir depletes, Conoco expects that in 5-7 years associated gas production will meet steam generation needs.
During the project life, the joint venture expects to recover about 1.5 billion bbl, or about 10-15% of oil in place.
Conoco said extra costs to upgrade the heavy oil are similar to the higher finding and development costs for conventional crude in other regions of the world.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
Issue date: 12/26/94
