Harbir Chhina keeps Cenovus Energy Inc. running smoothly
Alberta Oil C-Suite Energy Executive Awards
Harbir Chhina got his first taste of the oil sands in 1982, as a freshly minted engineer with the Alberta Oil Sands Technology and Research Authority (AOSTRA), the Crown corporation formed under Peter Lougheed in 1974 to promote the development of new technology for oil sands and heavy crude oil production.
He was there when AOSTRA launched its first in-situ bitumen recovery facility using steam – a baby of then-chairman Maurice Carrigy, who took a gamble on so-called steam-assisted gravity drainage, or SAGD, at a time when none of the companies that helped fund AOSTRA’s projects thought it worthwhile.
“Nobody thought it would work,” recalls Chhina. Carrigy disagreed, and “went full steam ahead.” Chhina would remember the guts and the gamble – as well as the stringent analysis behind the gamble. And he would put it to work in project after project for his next employer, the Alberta Energy Company, with which he would spend the next 24 – and counting – years of his career, moving up the ranks as AEC transformed into Encana Corp., finally becoming executive vice-president of oil sands when Cenovus was spun out in 2009.
The performance of two of these oil sands assets, Foster Creek and Christina Lake, has been nothing short of phenomenal: both projects are operating at about 100 per cent of the outputs the company predicted, while the industry averages about 60 per cent.
Chhina, the recipient of Alberta Oil’s 2012 Energy Executive Award for top engineering and operations executive at a Canadian energy company, is critical to that success – although he attributes the projects’ success first and foremost to the quality of the geo-play.
“I call them the motherlodes,” he says, extolling the vertical and lateral continuity of the resource. The concentration of the crude within a comparatively small geographical area lets Cenovus (and its partner in both projects, ConocoPhillips) keep operating costs down as it steadily ramps up production.
But it takes talent to spot and exploit “a really good lot” as well as Chhina exploited Foster Creek, the first SAGD development in Alberta. Chhina was initially hired by AEC to make Primrose Lake perform, but he ended up shutting down that project and discovering Foster Creek instead. “I still remember its well log number,” he says. “As soon as I saw it, I was so impressed with it. I analyzed it for SAGD and, boy, it had potential.”
Potential for production and as it turned out, potential trouble: the well log was 50 kilometers from any road, never mind other infrastructure. The first drilled injector hit the first drilled producer, and the team didn’t realize it had made a hole in the casing until too late, “so a well that was supposed to be $3 million ended up costing us $7 million.” Chhina went a full $16 million over his $16-million budget.
But – he delivered on time and proved the concept. In 1996, Chhina and his team finally got to build Foster Creek, which started producing in 2002 and in 2010 became the largest commercial SAGD project in Alberta to reach royalty payout status. Since those first missteps, his projects have been consistently on time and on budget. “It’s good to make your mistakes in the pilot phases,” he says.
- Graduated from the University of Calgary
- Convinced Alberta Energy Company to launch Alberta’s first commercial SAGD project
- Managed Cenovus’s oil sands operations to 95,000 barrels per day net to Cenovus in 2012, a 44 per cent increase from 2011
- Recognized for getting projects done on time, on budget and achieving or exceeding projected metrics
On the necessity of surrounding yourself with smart people: Whenever I woke up in middle of the project and felt I was over my head, I would start looking for other smart people to help us. That’s my biggest learning: when you start hitting a brick wall, hire people smarter than you. You have to know when you’ve reached your limitations.
On the power of technology: If we have the right people working on [our technological challenges] and we give them money and time, we will get the solutions we need. As we improve technology,we will be able to get excellent results in situations where the resource quality is good but not great.
On making mistakes: We make mistakes just like everybody else. We just made them with smaller dollars in the pilot phase. And we applied the lessons to the next phases. This is not rocket science, but common sense, but that’s really the secret to the success of our projects.