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Alberta energy sector benefits from oil sands ingenuity

Athabasca Oil Sands Project, BP Canada Energy Co. top list of innovative firms

February 05, 2010
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22

Finding Saskatchewan’s Oil Sands

Since 2004, Oilsands Quest Inc. has raised $381 million from investors with a proposition that the decades-old official Alberta boundaries of the oil sands deserve to be expanded. As of late 2009 the bet has begun to pay off, says Simon Raven, the company’s chief geologist. “Our first bitumen,” he declared as he held up a test tube of Saskatchewan black gold in front of about 350 experts at a meeting of the Canadian Heavy Oil Association. “So watch out Suncor,” he joked to a crowd that knows all about the vast amount of work and investment the exploration firm still needs to do in order to catch up to the company that launched the oil sands industry by building the first commercial plant in 1967.

The sample came from test wells at a remote Saskatchewan location east of Fort McMurray known as Axe Lake, where Oilsands Quest has built an airstrip and at times housed more than 200 workers. Raven reports finding a motherlode of oil-soaked sand in layers up to 30 meters thick which are 80 to 92 per cent bitumen and buried only 185 to 205 meters beneath the northern bush. With more than $50 million of investors’ money still in the company treasury, work on a pilot production plant is scheduled to begin in late 2010 or early 2011.

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Faster, Cleaner, Cheaper

The oldest oil sands mega-mine is a work in perpetual progress, still refining faster and cleaner ways to tap black gold ore north of Fort McMurray 42 years after a foreign-owned ancestor of Suncor Energy Inc. started production by borrowing European methods of scooping up coal in warmer climates. After replacing the original earthmoving machinery with more durable, efficient North American-made jumbo trucks and shovels, the Calgary company is giving trial runs to a prototype of all-Canadian and even bigger hardware devised exclusively for Alberta’s bitumen belt.

The electric-powered, remote-controlled, next-generation “mobile ore preparation” machine roves on monster tank tracks to swallow up to 5,500 tonnes of oil sands per hour, replace 15 mammoth dump trucks, cut carbon emissions, reduce labor costs and start the bitumen separation process at the mine face. At the same time, Suncor is pressing ahead on a regulatory application for permission to make a 2010 start on using a method of accelerating tailings pond reclamation. The new system, known as tailings reduction operations, or TRO for short, makes a blend of yogurt-like bitumen separation waste and a manufactured polymer or jumbo molecule that dries out in weeks instead of years.

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Cradle of creative mining

The Syncrude Canada research center stands out in Edmonton as a cradle of creativity. Its 46-year history of making inventions and turning them into products, systems and processes capable of operating reliably on the colossal scale required by the nation’s biggest oil production site is no small feat.

A $40 million to $50 million annual budget helps, too. Breakthroughs by the center’s 120 staff, many of them scientists packing PhDs, range from mechanical details to methods of operating the mining and synthetic crude upgrading complex. Some designs are grand and take years to implement, such as engineering concepts that since the early 1990s enabled the plant to cut in half the temperature of its hot-water extraction process, thereby reducing costs and greenhouse-gas emissions. Attention to detail achieves simpler, quicker gains such as inventing a rubber patching method that extends the life of $65,000 tires on the world’s biggest mine trucks – which are $6-million behemoths for 400-tonne payloads that were also born in the oil sands.

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Going To Technical Extremes

Amid the worst oilfield slump in me-mory, Xtreme Coil Drilling Corp. posted 2009 increases in revenues, profit margins and net earnings. The trade secret behind the stellar performance is a combination of advanced equipment and an international marketing strategy that won a 2009 Alberta Export Award for the Calgary-based contractor.
On the technology front, it helps that the company, while led by industry veterans with global experience, is just four years old and making a fresh start using only the latest hardware. Xtreme owns nine patents and builds its inventions into rigs that it manufactures in the Edmonton industrial satellite of Nisku. The equipment caters to a growing international market for contractors capable of doing increasingly technical work. The Xtreme machinery is designed for rapidly drilling multiple deep and angled wells into small or awkwardly shaped targets buried in complex geology.

The business strategy departs from Canadian industry norms. When the firm was born in 2005, natural gas prices were at record highs and most contractors focused on catering to feverish demand for Alberta wells. Xtreme concentrated on international marketing, scored a breakthrough in Mexico and is spreading its wings from the United States to the Middle East.

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