Introduction To Heavy Oil in The World and in Canada

MBDCI
Introduction to
Heavy Oil in the World and in Canada
Maurice B. Dusseault
The Heavy Oil Resource
MBDCI
The Oil Source of the Future

Heavy and viscous oils will
become the major world oil
source by 2040
New technologies from
Canada have led the way in
helping access this
challenging resource
SAGD
IGI
CHOPS
HCS
PPT
And, others are emerging
MBDCI
API Definitions
API is a measure of the oil density!
Density
API
g/cm
50 Condensate
~11.3API
0,780
Conventional Oil
45 0,802
40 0,825
Lightoil
30 0,876
20 0,934
ventional
Non-con-
Heavyoil
Oil
10 1,000
Extraheavyoil
(<10000 mPa.s)
Tarsand
/Bitumen (>10000 mPa.s)
0 1,076
API: American Petroleum Institute
Different countries, organizations

use different HO definitions API gravity = (141.5/SG at 60F) - 131.5
MBDCI
Future of Conventional Oil
1998 predictions: Conventional Oil Prediction in Red

Total Need Prediction in Blue Dots
Demand +1.5-2%/yr
Convl oil production Q- Bb/yr
31 Bb/yr
peaks in ~2006-10 (?)
Middle East >40%, 20
50% by ~2015
Cheap oil era may 2008

1978
have now ended Campbell and Laherrre
Heavy oil value

March Sci Am, 1998, p78

MBDCI
What is the Energy Issue?

People are consuming more energy
Countries want to develop (China, India),
increasing energy demand significantly
Developed countries are slowly consuming
more and more energy, but
Energy intensity is decreasing (good!)
Population growth is stabilizing (good!)
Traditional pollution is abating (good!)
This leaves CO2 as the remaining challenge,

but a very important one!
MBDCI
Changes in Energy Sources
1800 Direct Wood, Wind, Water, Animals
Steam Engine - Coal (1830 - 1900)

1850
Electric Dynamo - Coal (1900 -1940)

1900
Internal Combustion Engine
Oil - (1910 1970)
1950 Nuclear (1960 - 1990)
CCGT Natural Gas (1990 - ?)

2000
Fuel Cell Direct Electricity Nuclear
Hydrogen? Solar? come-back?
Scenarios to 2050 - Shell International (2001)

MBDCI
Energy Utilization Efficiency
Unit Energy Input per $ of

Gross National Product
1.0
All countries
are following
2008
similar trends
0.5
Clearly, we are using energy much more efficiently on a GDP basis.

For oil, it is even better (down to 0.43-0.44 compared with 1970)
1970 2000 2030

MBDCI
World Population Growth
World Population
- billions
Peak in about 2050 (?)
10
~9 billion
x
6 billion
5 April 2009 ~6.8109
1950 2000 2050

MBDCI
Oil per Unit of GDP

(PPP = purchasing power parity)

Source www.iea.org
MBDCI
Selected Countries Oil Intensity
kg oil per
real $ GDP)
Source www.iea.org
MBDCI
The Consumers - 82.6 MMb/d

Rank Country 2007Oil Consumption
1 United States 20.7 million barrels/day
2 China 6.5 MMb/d
3 Japan 5.4 MMb/d
4 Germany 2.65 MMb/d
5 Russian Federation 2.50 MMb/d
6 India 2.45 MMb/d
7 Canada 2.29 MMb/d
8 Brazil 2.19 MMb/d
9 South Korea 2.15 MMb/d

10 France 1.98 MMb/d
11 Mexico 1.97 MMb/d
12 Italy 1.88 MMb/d
http://www.photius.com/rankings/economy/oil_consumption_2007_0.html
MBDCI
Example of Energy Consumption

MBDCI
Lets Look at the US

US is the largest energy consumer
US consumes ~25% of world oil, 2nd largest
per capita (Canada is #1 per capita)
US is the dominant economic force (30% of
world GDP)
US population is increasing, but Europes is
now declining slowly
US GDP growth rate is less than developing

countries ~3.2% vs. ~7-10% for India, China

MBDCI
Per Capita Energy use - USA

http://www.eia.doe.gov/oiaf/aeo/pdf/trend_2.pdf For the USA
Source: EIA Annual Energy Outlook 2008

The Heavy Oil Resource MBDCI
Source: EIA Annual Energy Outlook 2008 For the USA

Much of this is from coal!
Source: EIA Annual Energy Outlook 2008 For the USA only


For the USA

MBDCI
Comments on USA Projections

A roughly stable situation predicted for oil:
Despite population growth & GDP growth
The future role of nuclear power is likely
underestimated
Nuclear is a carbon-free energy source
Technology in 2008 is far more advanced than in
1979, 1986 (less risk, higher efficiency)

Geological waste disposal has proven feasible
Coal growth predictions seem high

So, predictions are fine, but they change
(compare to EIA predictions made in 2000)
MBDCI
US Imports (Crude + Products)
COUNTRY MMBOD %
Canada 2.42 17.7
Mexico 1.53 11.2
Saudi 1.48 10.8
Venezuela 1.36 9.9
Nigeria 1.13 8.3
Algeria 0.67 4.9
2007 Angola
Iraq
0.51
0.49
3.7
3.6
Rest 4.10 29.9

13.7 100.1
US consumes: ~20.6 MMBOD
US imports: ~13.7 MMBOD (crude + all products
MBDCI
US Raw Crude Imports, June 2006
Angola 4.9%
Algeria 4.4%
Raw crude imports
Ecuador 2.6% 10.78 106 bbl for
Russia 2.0% June 2006
The rest Canada 16.7%
14.7%
Mexico 16%
Nigeria
9.2% Venezuela Saudi 14.4%
9.4%
Iraq
5.8%
The USA also imports gasoline, natural gas,

diluent, and other petroleum products
MBDCI
Shares of World Oil Consumption

From www.iea.org Key World Energy Statistics, 2007

MBDCI
Breakdown of World Fuel Sources
*TPES: Total Primary

Energy Supply
China 1986-2006
MBDCI
MBDCI
The Issues: Oil

What is the future for oil?
What does this mean for the industry?
What has been developed recently (Canada)?
New production technologies (CHOPS, SAGD,
PPT, VAPEX, hybrid schemes)
New waste disposal practices
What areas should you watch in the future?

Hybrid & sequential development schemes

Emerging production methods
Carbon issues!
MBDCI
1998 predictions: Conventional Oil Prediction in Red

Total Need Prediction in Blue Dots
Demand +1.5-2%/yr Q- Bb/yr
World production
~31 Bb/yr
peaks in ~2006
Middle East @30%,
20
50% by 2010
2008
Cheap oil era may
1978
have ended
Heavy oil value
7% of world prod. Modified; red line from Campbell and
Laherrre March Sci Am, 1998, p78
MBDCI
M. King Hubbert
In 1956, MKH predicted 1970 peak oil
production in the USA to within one year!
In 1967, MKH predicted world peak ~2000
Colin Campbell in 1996 predicted ~2005
Prof. K. Deffeyes in 2001 predicted ~2005
Hubbert-based predictions have proven the
most robust of all predictive methods

But, are widely criticized
I believe Hubbert-type predictions, but
MBDCI
Hubbert Curves
Production
Effect of increased
price and new
technologies
Time
MBDCI
World Crude Oil Supply (1990)
Chevrons predictions in 1990 (all predictions are necessarily wrong)

Total
60
Consumption
Conventional
Million Barrels Per Day
50
Ex. Heavy
40
& Bitumen
Reserves
30
EOR
20
10
Shale
Undiscovered Oil
0
1900 1925 1950 1975 2000 2025 2050 2075 2100
Source: Chevrons Corporate Planning and Analysis Division, 1990
This is a typical prediction from 1987 data

MBDCI
What Are Our Options?
We can make up the difference by developing

heavy oil and oil sands
High prices will affect demand (as in 1980s)
We can make oil from natural gas; trouble is,
natural gas is a valuable fuel too! Also, $
We can convert wood, plants, coal
We can go to a H2 or an ethanol economy ($)

Carbon issues will impact our future
technologies (carbon taxes, sequestration)
http://www.delphi.ca/apec/
MBDCI
Predictions
Based on worldwide data, we have not replaced

conventional oil consumption with more
conventional oil for ~21 of the past 25 years
Thus, things seem clear for conventional oil
But, things could change!
Massive World depression develops
War, environmental doom, asteroid impact,
Dramatic technological breakthroughs
Predictions cannot be based on these events

MBDCI
Critique of Predictions
The future role of heavy oil has been
underestimated: this is beginning to change
The emergence of new technologies in the
15 years is not fully accounted for
Reserves will soon rise by 550 BB (heavy oil)
Total reserves will rise by another 1000 BB
Technology affects conventional oil as well

Nuclear will be reborn soon

Predictions based on history are useful, but
to be used with some caution
MBDCI
Who Produces the Oil?
2007: ~82.6 MMb/d total, OPEC about 41% of total

Non-OPEC Production
OPEC Production
MBDCI
Sources of Conventional Oil

Russia, Saudi Arabia, and USA are the
biggest producers, close to each other
The Middle East dominates the conventional
oil export market, and will continue for the
foreseeable future (25 years or more)
EIA predictions (next slide) for the year
2000 are likely unrealistically high because
of the approaching conventional oil peak

(Note that this does not necessarily mean a
total oil production peak!)
MBDCI
Oil Production by Region (Mb/d)
Region 1990 2000 2020

Persian Gulf 16.2 21.2 39.6
United States 9.7 9.1 10.0
Canada 2.0 2.7 3.6
Mexico 3.0 3.5 4.4
China 2.8 3.2 3.0
Central & South 2.4 3.8 6.5
America
Former Soviet 11.4 8.2 14.9
Union
Total World 66.7 76.8 118.3 ??
Oil and Gas Journal, Apr 15, 2002: US EIA data


MBDCI
Proved oil reserves at end 2005

www.bp.com
Venezuelan
HO & XHO
280
(MBD) A better view!
Canadian HO
174
South and
Central America
North America 103.5
59.5
MBDCI
Reserves-to-Production Ratios
(Conventional oil only!!)

MBDCI
Oil: Who Produces it?

Saudi 10.7 MMb/d Canada is now 6th
Russia 9.7 However, growth in
USA 8.3 heavy oil and oil sands
Iran 4.1 continues (Canada: ~5
China 3.8 MMb/d by 2020)
Canada (2008) 3.4 (rising) Where will other growth
Mexico (2008) 3.0 (dropping) come from?
UAE 2.9 Conventional is flat
Venezuela2.8
Norway 2.8
I believe that growth
Kuwait 2.7 will mainly come from
Nigeria 2.4 technology oil: i.e.
heavy oil, oil sands
2006 EIA data
http://tonto.eia.doe.gov/country/index.cfm

MBDCI
Are There Limits to Hydrocarbons?

Conventional oil ~ 2% of natural HCs
Heavy oil ~ 4-5% of total HCs
Natural gas ~ 5-8% of HCs
Coal + shale oil ~ >50% of non-gas HCs
Methane hydrates may comprise 10-25%!
We can synthesize oil from coal, wood, etc.
We can make oil from elements (C + H)!

e.g.: H2 from electrolysis (solar power)
C from various sources, then combine the two!
MBDCI
Example: Ethanol C2H5OH

Density of ethanol: 0.789
Density of gasoline: 0.737
Energy density of ethanol: ~25 MJ/kg
Energy density of gasoline: ~45 MJ/kg
In the tank of your car:
ETHANOL gives 19.7 MJ/litre
GASOLINE gives 33.2 MJ/litre

Pollution? About the same
Gasoline: fossil fuel; Ethanol: plants
MBDCI
Energy Sources are not Static!

Wood was a major source. Energy crises
(lack of firewood) were common in Europe
Wood displaced by coal 200 to 150 yrs ago
Much coal was displaced by oil last century
Natural gas has largely displaced heating oil
In the next +100 yrs, other sources needed
High density electrical energy storage?

Hydrogen cycle? Others?
Clearly, Energy Man is evolving

MBDCI
How Much is There??
World Oil Resources (not necessarily reserves)

400
300 Conventional
<100 cP
Heavy Oil
Billion m3
200 100-10000 cP
Bitumen
> 10,000 cP
100
0
D. Wightman (1997)
Saudi Arabia claims ~40 billion m3 (#1 in 2000)

With New Heavy Oil Technologies, Canada claims
>35 billion m3 of reserves (new #1 in the future?)
MBDCI
Oil Sands
Core from Venezuela
Weathered surface looks almost white

Oil sand slopes

in Canada
MBDCI
World Oil Endowment

Probably the total endowment is 12-13.4 trillion barrels
Venezuela and Canada together have ~25-28% of this
Oil shales
Conventional Oil Heavy Oil not included
30% 15%
Extra Heavy
and Bitumen
55%
Source: MacGregor, 1996 and UNITAR, 1998

MBDCI
Will Oil Run Out?

Natural cheap conventional oil must run out
But, oil from heavy oil deposits, shale, coal
conversion depends on $ + technology
At $45/BBL, much heavy oil is profitable
At $75/BBL, oil from coal (SASOL), gas?
At $80/BBL, major shale oil projects?

At $100/BBL, wood conversion is possible!
At some price, gasoline from chemistry (C+H)
Oil is thus infinite, depending on price

MBDCI
World Reserves: BPs View
www.bp.com
Total world reserves: 1047.7 thousand million (billion) barrels

MBDCI
World Reserves: Todays View
300
250
billion barrels
200
150
Alberta
100
50
0
q
da
a
la
o
a
si
Ira
bi
ic
e
a
us
zu
ex
ra
an
A
ne
M
C
di
Ve
u
Sa
These are sanctioned recoverable reserves

Sources: Oil and Gas Journal Dec 2002, AEUB
MBDCI
Greatest Total Reserves

Rank Country 2006 Proved Reserves
1 Saudi Arabia 264 billion barrels
2 Canada 179 billion barrels*
3 Iran 132 Bb
4 Iraq 115 Bb
5 Kuwait 101 Bb
6 United Arab Emirates 98 Bb
7 Venezuela 80 Bb
8 Russian Federation 60 Bb
9 Libya 39 Bb
10 Nigeria 36 Bb
11 United States 21 Bb
12 China 18 Bb
http://www.infoplease.com/ipa/A0872964.html
MBDCI
Albertas View of Oil Reserves
350
350 - Based on a less rigid view of recoverable
reserves and technology potential 300
recoverable reserves
300
Billions of barrels
250
250
200
200 EIA financial institutions
150
150 ~2003
data 100
100
50
50
0
0
.
da i A d a
rI a
n
e la s ia S A i co
n a ud na
C zu us U ex
Ca Sa Ca SE ne R M
Ve Source EIA + AEUB
MBDCI
World Reserves: Tomorrows View
350
300
250
billion barrels
200
150
100
50
0
Venezuela Canada S Arabia Iraq Russia US
Highly conservative estimates

MBDCI
Reserves
Steve Holditch (2003) estimates that Canada
has 305 BB of reserves, based on:
Prices of $25-35/bbl
2003 technologies (mining + new technologies
developed since 1985 SAGD, HCS,CHOPS)

Venezuela will rise to 340 BB (MBD)
40 from the Maracaibo Basin (2nd in world)
300 from the Orinoco Heavy Oil Belt
Other countries will soon start booking new

reserves based on the new technologies
S. Holditch, JPT, November 2003
MBDCI
There are also significant HO & XHO reserves in Russia, carbonates in ME, etc.
MBDCI
HOWEVER!
Value as Ratio of Earning Power

All commodities have dropped
in price since 1760. Oil is still
cheaper than in the year 1980.
Short-term fluctuations
Why? Efficiency, ingenuity, technology
Time
MBDCI
Crude Oil Prices Since 1861
2008
MBDCI
Is There Lots of Oil Left?

Few unexplored basins left in the world
Large fields are usually the first to be found
Geochemistry + seismics are now very
powerful evaluation and prediction methods
Huge data base on basins worldwide leads to
excellent modeling by analogy methods
Only deep offshore remains unquantified
Therefore, current predictions of an oil peak

seem to be more robust than previous ones
This applies to conventional oil of course
MBDCI
Typical Basin Discovery Pattern

Millions of Barrels of oil equivalent
1000
Largest fields discovered first
Mainly step-outs,
few new fields
100
New sub-basins,
Central Graben, North
10 Sea
Economic development limit price
Average size of all UK

1 discoveries in a given year
1970 1980 1990 2000

MBDCI
Are There Many More Basins Left?
All major easy basins are now explored:

Seismic lines have been run
A few test holes drilled
Geochemistry, HC generation has been done
Comparisons to other basins have been done
Offshore Arctic, Antarctic?

Deep offshore (>200 m depth), limited

Remote oil is more difficult, so is deep oil
Conclusion: we are running out of basins
MBDCI
Size and Distribution of Fields
100
Viscous oil fields
Original Oil in Place OOIP - %
Conventional oil fields

75
Comments
Biggest fields dominate the resource base,
50 especially in viscous oil
In conventional oil, 50 largest fields have 50%
of the known conventional OOIP
This suggests that the number of small
viscous oil fields is likely under-reported
25 Faja del Orinoco, plus a few Canadian and

Russian fields = 50% of viscous oil resources
Likely, all the big ones in viscous oils have
been more or less delineated
0
Number of Reported Fields - %
MBDCI
Oil production, all 2030

optimists
types (C, H, XH) prediction for
conventional oil
2006-
2008? probable
oil future
conventional
prediction
Time
MBDCI
Optimists vs. Pessimists

Optimists use USGS data
Pessimists fail to account for the new
emerging technologies that will help slow
down the decline rate
However, the peak production of
conventional oil is imminent (2-5 years?)
Demand will have to be met by higher
prices and heavy oil

Lets study some data
MBDCI
World Oil Supply Predictions

<>
MBDCI
BP: Trends in Oil Production

2002 Rank Country Oil 1992 Oil 1997 Oil 2002
1 Saudi Arabia 9.10 M b/d 9.36 M b/d 8.68 M b/d
2 Russian Fed 8.04 M b/d 6.23 M b/d 7.70 M b/d
3 US 8.87 M b/d 8.27 M b/d 7.70 M b/d
4 Mexico 3.12 M b/d 3.41 M b/d 3.59 M b/d
5 China 2.84 M b/d 3.21 M b/d 3.39 M b/d
6 Iran 3.52 M b/d 3.73 M b/d 3.37 M b/d
7 Norway 2.22 M b/d 3.28 M b/d 3.33 M b/d
8 Venezuela 2.50 M b/d 3.32 M b/d 2.94 M b/d

9 Canada 2.06 M b/d 2.59 M b/d 2.88 M b/d
10 UK 1.98 M b/d 2.70 M b/d 2.46 M b/d
11 UAE 2.51 M b/d 2.49 M b/d 2.27 M b/d
12 Iraq 0.53 M b/d 1.17 M b/d 2.03 M b/d
MBDCI
Viscous Oil Production - 2007
~1.7 Mbod
Alaska ~0.3 Mbod

Canada Russia
UK
~0.4 Mbod Netherlands Kazakhstan ~0.3 Mbod
USA
~1.0 Mbod Italy
Eastern Europe
Turkey
Iraq China
Syria
Kuwait
~0.35 Mbod Venezuela
Libya
Egypt Saudi
Iran India
Legend Mexico Arabia

Trinidad Oman ~0.25 Mbod
SD/SF/SAGD/CSS/CHOPS Nigeria
Indonesia
Columbia Angola
SF/SD
Ecuador
Mining/SAGD/VAPEX/THAITM Peru
Brazil
Madagascar Australia
Cold Production
CHOPS
SAGD Argentina
Cyclic Steam Stimulation
Others/not enough information Courtesy Satinder Chopra

MBDCI
Oil is NOT Like Gold!

Fixed gold amount in Only fossil HC is a
the earths crust fixed quantity
Richest mines are Politics often dictate
always exploited first differently (e.g. USA)
Cant create gold Oil can be created
Gold is stored as well With minor exceptions
as used (i.e. a buffer all produced oil is
against high prices) consumed, no storage
Gold cannot be Oil is destroyed when

destroyed (in principle, used, and cannot be
always recyclable) recovered in any way
Middle East Oil?

MBDCI
MBDCI
USA Refinery Feedstock Evolution

33 1.5
1.4
API gravity Sulfur
32 1.3
API Gravity
% Sulfur
1.2
31 1.1
1.0
Feedstocks are getting heavier
30 0.9
84 86 88 90 92 94 96 98 00 02 04
MBDCI
Why Focus on Canada?

Huge heavy oil reserves
The recent new technologies have been
largely developed in Canada
Conventional oil is depleting in a highly
explored, mature basin
Canada is the first country to go through:
A peak in oil (conventional) production

A trough in production
Now, the old peak exceeded by new heavy oil

MBDCI
Oil Development Costs, Canada
Cost/b of new Western Canadian

production capacity Sedimentary Basin
Exploration costs for
Operating costs (OPEX) of new conventional oil
non-thermal heavy oil
~$USD 18.00/b
CSS/
CSS, SAGD OPEX SAGD
Effect of new >$USD 15.00/b
technologies
~$USD 8.50/b
1996? (CHOPS OPEX)
2008 Time
Exploration is becoming more costly, basin is highly mature

MBDCI
What is the Ultimate Recovery?
The TOTAL (OOIP) reserves are:

Venezuela ~ 1.6-1.81012 bbl (Faja + Maracaibo)
Canada~ 2.2-2.51012 bbl (WCSB)
Other countries less heavy oil (Russia 600 Bb, Iran 100
Bb, etc)
With new, emerging and future technologies for
heavy oil, in Canada
Pessimists 20% recovery (existing methods)

Expected 35% recovery (evolving methods)
Eventually 50% recovery (future methods?)
MBDCI
Variety of Rock Types
Rock Type -% k - mD
Alaska (Ugnu) sandstone & UCS 27 36 500 10000
Canada (Alta/Sask) sandstone & UCS 26 32 1200 7500
USA (California) sandstone & UCS. 32 40 600 7000
Ku-Maloob-Zaap (Mexico) fractured limestone 5 6 1000 10000
Venezuela (Orinoco) sandstone & UCS 30 32 1200 10000
North Sea (Captain, Alba) sandstone & UCS 33 35 3000 7000
Indonesia (Duri) UCS 27 34 1000 4000

China (Gaoshen & sandstone & 23 32 500 2200
Huanxiling) dolomite
Kuwait (Neutral Zone - fractured dolomite 15 24 10 200

SUG)
MBDCI
Alberta Bitumen Production
2.2 MB/day
+ heavy oil
0.75 MB/day
Courtesy: Alberta EUB

MBDCI
Western Canadian Oil Mix

MBDCI
Bitumen Production Forecast (AB)

Alberta ERCB 2008 Oil and Gas Journal, July 2008

MBDCI
Alberta, All Liquid Products

MBDCI
Bitumen - 2007
These figures do
not include heavy
oil south of line Oil
sands
Some Cold Lake region
region production
is from CHOPS
+heavy oil from
elt
lB
Saskatchewan
Oi
avy
He
In situ
Mined
Alberta ERCB, from Oil and

Gas Journal, July 2008
MBDCI
Syncrude Canada OPEX
35
Operating costs continued to drop until ~2000!!
30
25
Actual Projected
US $ / Bbl
20
Recent data
15
10
0
81 83 85 87 89 91 93 95 97 99 1 3 5 7
Source: Syncrude Annual Report
For mining bitumen, $10 OPEX may be a lower limit

MBDCI
Viscous and Conventional Oils
100% 100% This chart is not

Profit margin intended to reflect a
specific case, but is a
Royalties and generalized statement
taxes of the cost driver
differences between
Upgrading &
transportation
viscous and
conventional oils
OPEX
CAPEX
Exploration
Conventional Heavy, XH
petroleum petroleum
MBDCI
Heavy Differential Price
Source: NEB Website

http://www.neb.gc.ca/clf-nsi/rnrgynfmtn/prcng/crdlndptrlmprdcts/cndnmrkt-eng.html
MBDCI
Development Areas, Canada
Alberta Saskatchewan
Athabasca Mining
HCS, Peace River oilsands
oilsands SAGD
CHOPS CHOPS
Cold Lake oilsands
CP
CSS, HCS
Wabiskaw SAGD
deposits
CHOPS
Edmonton
Lloydminster Saskatoon
Calgary
Heavy Regina
Oil Belt
MBDCI
Heavy Oil - Global View
Cradle of new technologies: SAGD

Barrels OOIP
Mining, SAGD, VAPEX, THAI ~1 billion
Arctic ~10 billion
conditions ~100 billion
Alaska UK Russia
Canada >1 trillion
Netherlands
E. Europe
Steam Italy Turkey
flood USA
Jordan Kuwait
China
Lower Egypt
48 Egypt India
Mexico
Saudi
Trinidad Arabia Oman Offshore
Offshore
Venezuela Nigeria
challenge
Ecuador
challenge Colombia Angola Indonesia
Peru Brazil
Madagascar
Australia Steam
Argentina flood
Cold Offshore
production challenge
Source: JPT, IEA ,Schlumberger OFS Marketing

MBDCI
Vast Heavy Oil Deposits

Source: Head Jones &

Larter 2003, Nature
MBDCI
Why New Technologies?

Conventional oil production Q- Bb/yr
~31
peaks ~2005-
2010
20
Heavy oil will become strategic
in the next 15 years 1978
~2008
New technologies can help 100 yrs
increase recovery ratios Conventional Oil Prediction**

New technologies will lower Time
heavy oil costs

Exploration costs are almost
zero! **Campbell and Laherrre
March Sci Am, 1998, p78
MBDCI
What is Left?
~13.5-14.5 Tb of liquid HC (not counting gas,
shale oil, methane hydrates)
~4.6 Tb conventional, 9.4 Tb heavy (<22API)
1.1 Tb of conventional oil produced to 2008, 1
Tb of conventional oil remaining
0.5-0.6 Tb from future new technology
1.0 Tb heavy oil certain (current technology)
Another 1.0 Tb very likely

Another 1.5 Tb from future new technology?
~2.0 Tb current technology, 4-5 Tb ultimate
Husky Energy MBDCI
Lloydminster
Upgrader
~80,000 b/d (2006),
being expanded
(2007)
MBDCI
Conclusions
Conventional oil will soon peak
Good for heavy oil, IOR, profits
Remarkable technology advances recently
We must try to consolidate & perfect them
The future for viscous oil looks genuinely
promising at present
If we dont develop viscous oils now, we may

never H2 cycle, replacement, CO2 issues, etc.

Introduction To Heavy Oil in The World and in Canada

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MBDCI

The Oil Source of the Future

API is a measure of the oil density!

API: American Petroleum Institute

Different countries, organizations

Future of Conventional Oil

1998 predictions: Conventional Oil Prediction in Red

Heavy oil value

What is the Energy Issue?

Traditional pollution is abating (good!)

This leaves CO2 as the remaining challenge,

Changes in Energy Sources

1800 Direct Wood, Wind, Water, Animals

Steam Engine - Coal (1830 - 1900)

Electric Dynamo - Coal (1900 -1940)

CCGT Natural Gas (1990 - ?)

Scenarios to 2050 - Shell International (2001)

Energy Utilization Efficiency

Unit Energy Input per $ of

Clearly, we are using energy much more efficiently on a GDP basis.

1970 2000 2030

World Population Growth

1950 2000 2050

Oil per Unit of GDP

(PPP = purchasing power parity)

Selected Countries Oil Intensity

The Consumers - 82.6 MMb/d

9 South Korea 2.15 MMb/d

Example of Energy Consumption

Lets Look at the US

US GDP growth rate is less than developing

Per Capita Energy use - USA

http://www.eia.doe.gov/oiaf/aeo/pdf/trend_2.pdf For the USA

Source: EIA Annual Energy Outlook 2008

Source: EIA Annual Energy Outlook 2008 For the USA

Much of this is from coal!

Source: EIA Annual Energy Outlook 2008 For the USA

Source: EIA Annual Energy Outlook 2008 For the USA

For the USA

Source: EIA Annual Energy Outlook 2008 For the USA

Comments on USA Projections

1979, 1986 (less risk, higher efficiency)

Geological waste disposal has proven feasible

Coal growth predictions seem high

US Imports (Crude + Products)

Rest 4.10 29.9

US Raw Crude Imports, June 2006

The USA also imports gasoline, natural gas,

Shares of World Oil Consumption

From www.iea.org Key World Energy Statistics, 2007

Breakdown of World Fuel Sources

*TPES: Total Primary

The Issues: Oil

What areas should you watch in the future?

Hybrid & sequential development schemes

Future of Conventional Oil

1998 predictions: Conventional Oil Prediction in Red

most robust of all predictive methods

World Crude Oil Supply (1990)

Chevrons predictions in 1990 (all predictions are necessarily wrong)

Source: Chevrons Corporate Planning and Analysis Division, 1990

This is a typical prediction from 1987 data