Heavy Oil Recovery and the Strategic Decisions That Need to be Made
The question is not how much heavy oil is in the ground, but how much of it can be recovered. For Canada’s heavy oil operators – those who could make Canada the world’s fifth-largest producer by 2015 – the answer depends on the efficiency of their recovery plans
When analysts try to estimate the world’s remaining oil reserves, one of the largest variables is heavy oil. If heavy oil is in your portfolio, here are some points to consider.
Roughly 10 percent of the world’s daily supply of petroleum is so thick that it can’t flow through pipelines on its own. Even so, the importance of heavy oil – often defined as anything less than 22 API gravity – is escalating. The reason is sheer volume. While proven oil reserves worldwide stand at more than 1,200 billion barrels of conventional crude, the amount of heavy oil in place is five to ten times greater.
In the decades ahead, heavy oil will likely affect global supply dynamics, since 80 percent of known heavy oil reserves are in the Western Hemisphere. Canada and Venezuela account for 90 percent of all known heavy-oil reserves, according to the Alberta Research Council, as reported by the Canadian Society of Exploration Geophysicists. Venezuela has the largest deposits, and by 2015 heavy or “unconventional” oil could make Canada the world’s fifth-largest producer.
The problem, of course, is that heavy crude is notoriously difficult to recover, transport and refine. Of the 6,000 billion to 13,000 billion barrels of heavy oil in place, only about 500 billion to 1,000 billion are considered recoverable with conventional technology. The main technical challenges are to lower the viscosity of the oil to make it flow more easily, and to better understand the composition of the oil, and how to handle heavier components.
The nature of heavy oil
Heavy oil reserves are very different from conventional plays. For one thing, the production time scale is much longer. Heavy oil reservoirs typically produce at a steady rate for decades. Over time, they make a lot of oil. California’s heavy oil region, centered in Kern County, has been productive for more than a century, with four of its largest fields delivering more than a billion barrels each.
Most heavy oil deposits are in poorly consolidated sand, which means that drillers must take extra precautions to maintain the integrity of well bores and manage the production and disposal of sand.
There are also vast differences in the types of heavy oil deposits, even from adjacent fields. Recovery methods that work on one side of the fence may not work on the other.
Reservoir simulation
Given the nature of heavy oil, reservoir models are perhaps more important than they are for conventional plays. Reservoir simulators for heavy oil should be able to take into account a variety of complex reservoir behavior when it is subject to heat, solvents or large geomechanical stress; in the latter case, to account properly for reservoir behavior, non-linear geomechanical variables at a resolution of one square metre across the entire reservoir are necessary to estimate surface movement over long production periods.
In the early phase of development, simulation can help engineers optimize the design of the production system, and to evaluate various well trajectories and drainage patterns. After production begins, operators may see a wide range of results from individual wells. In that case, accurate modelling can help optimize production throughout the life of a field.
Intelligent completions and continuous monitoring enable better control of inflow and outflow from the well – providing measurements in real-time for dynamic modelling and automated control. Prior to deployment of any such system a proper optimization study should be conducted using simulation tools.
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