New technologies designed to recover “another Alberta’s worth” of untapped oil and gas will drive investment in the conventional fuels for at least the next 20 years, predict industry promoters.
While the province’s vast oilsands reserves are now getting recognition globally, “conventional oil is still very much of interest and natural gas is of huge interest,” says Alberta Economic Development Minister Mark Norris.
“There are a lot of new technologies to get existing fields back up and running, where they might have been deemed not worth producing,” Norris said during a visit last week to the Global Petroleum Show in Calgary.
The minister stopped to chat with renowned oilfield firefighter Mike Miller, CEO of Safety Boss Ltd., beside the Calgary firm’s rough-terrain fire-fighting truck that can snuff a blaze with 6,800 litres of water and 1,000 litres of foam.
Peter Faloon, business sector manager for dmg world media, the company that produces the annual three-day show at Stampede Park, says that judging by this year’s exhibits, “there’s still a ton of interest” in exploring for and producing conventional oil and gas in the Western Canadian Sedimentary Basin – the geological formations that are the source of Alberta’s energy wealth.
“The Western Canadian Sedimentary Basin is still a critical source of crude and natural gas for North America,” Faloon said in an interview.
The U.S. is a massive importer of Canadian oil and gas, he noted, making the geological basin “a strategic reserve for the Americans.”
Forecasts by the Alberta Energy and Utilities Board (EUB) and other organizations say conventional natural gas production from the basin will start to drop this year and continue to decline gradually over the next decade. Production of conventional crude from the basin has been dropping for the last 20 years.
But as Alberta Energy Minister Murray Smith has pointed out, there is still “another Alberta’s worth” of untapped oil and gas waiting to be exploited beneath the province.
That’s because existing technologies recover, on average, less than 27 per cent of the conventional oil in place.
New technologies – including next-generation pumping systems, sophisticated down-hole tools for identifying reservoir characteristics, and injecting carbon dioxide gas into wells – could boost the recovery rate to 40 per cent while also reducing environmental effects.
Each one-per-cent gain in recovery amounts to about 600 million barrels of oil, and an additional $40 billion to Canada’s gross domestic product, along with 100,000 jobs and almost $3 billion in additional government revenues, according to a recent study by Petroleum Technology Alliance Canada.
“The potential is huge,” said Ray Mills, CEO of Kudu Industries Inc. in Calgary.
Kudu makes a rotary pump that Mills said is replacing the familiar nodding pumpjack, with its reciprocating pump that has become a symbol of the Alberta landscape.
“With our technology, we can achieve much higher recovery rates from the wells than a pumpjack can,” he said.
Kudu’s progressing-cavity pump system, installed at the bottom of a well, costs much less than a pumpjack, uses one-third less power, is more durable and prevents the oil mixing with water that’s often also trapped in the reservoir, Mills said. “We’re pumping wells that are 99.5 per cent water, economically.”
Rotary pumps, which Mills estimates have replaced pumpjacks on up to half of Alberta’s oil wells, are significantly boosting recoverable reserves while extending the life of aging oilfields.
“It’s basically doubling the recoverable reserves and well life, which means better economics – less drilling and less wells for the same amount of oil.”
Companies are also using new down-hole tools to obtain maximum oil and gas production from new and aging reservoirs.
Grande Prairie-based ProTechnics, a division of worldwide Core Laboratories, makes a tool that’s installed in the wellbore and identifies different radioactive tracers used in assessing techniques to stimulate oil flow into the well.
“We can tell how the stimulation works on that well, whether it’s an old well or a new well,” said Lyle Doucette, ProTechnics’ district manager.
The technology enables companies to pinpoint which parts of the wellbore to either open up or close off to maximize oil production and minimize unwanted water or sand flowing from the reservoir.
Precision Wireline Technologies, a division of Calgary-based Precision Drilling Corp., also makes a down-hole tool that instantly tells companies which parts of the wellbore are producing natural gas or light hydrocarbons versus unwanted water.
“The advantage of this tool is we can actually send data over a satellite and the customer can watch the test (in) real-time,” said Vern Mathison, Precision Wireline’s technical representative for accounts in Western Canada.
Mathison said there is great potential for using the technology to produce more oil in previously uneconomic oilfields, as well as to maximize oil recovery in new wells. “The interest in this tool is huge. It’s a good way to monitor your reservoir.”
Wes Scott, show manager for dmg world media, says he expects to see more and more new technologies designed to get at Alberta’s untapped oil and gas wealth in the 2006 Global Petroleum Show.
“For the Alberta market, the Western Canadian Sedimentary Basin is a huge part of the industry and will be probably for the next 20 years,” Scott said.
Faloon agreed, saying: “A lot of the exhibitors here have a very strong message not only about their technology being better at doing what it does, but also having a lower energy demand and smaller environmental footprint.”
This year’s show featured close to 1,600 exhibitors – a record – and on track to attract at least 50,000 visitors.
Show organizers also expected the event to pump about $30 million into the Calgary economy and to generate $10 to $15 billion in sales for exhibitors over the next 12 months.