Edmonton is about to play a larger role as global oil production switches gears.

Oilfield service giant Schlumberger, with more than 52,000 people employed in 100 countries, has located its new state-of-the-art global reservoir fluids centre (RFC) in the provincial capital.

The opening of the 30,000-sq.-ft. centre in Edmonton's southside research park will allow Schlumberger to advance its research in reservoir fluids, as well as develop knowledge, equipment and methodologies needed to apply this research to practical operations.

It comes at a time when conventional light-crude production is declining in a large number of countries, said Claude Durocher, vice-president of Schlumberger Canada Ltd.

Jack Dagley, Business Edge
Schlumberger site manager Moin Muhammad holds up bottle of crude at opening of the reservoir fluids centre.

"The industry has recognized the need for more intensive oil-and-gas R&D," he said. "There is also growing interest in the production and exploitation of heavier, more viscous oils - up to and including bitumen mining - which requires better understanding of the reservoir and the fluid behaviour.

"Twenty years ago you could have probably got by with conventional crude," he added, noting that issues of waxing or sediment buildup in the product were not pressing. Today, however, with a decline in the production of conventional hydrocarbons along with increased global demand, producers are turning to heavier oil and more remote locations.

"This is forcing the operators to look at more complex environments," said Durocher. "Those complexities and challenges need to be solved."

This is where Edmonton comes into the picture, said RFC manager Moin Muhammad.

"This (the RFC) is the lead for reservoir fluid phase-behaviour research and product development," Muhammad said. "Industry is basically shifting towards heavy-oil production or tapping into heavy-oil resources, and that is where there is a need. Existing technologies are not fit for optimum heavy-oil production.

"This means we have to stay ahead of the technology and it means a lot of challenges for us," Muhammad added.

"It is going to keep us very busy and we will have to think outside of the box. For heavy oil, the technology has to be worked out."

To accomplish and meet these goals for a worldwide list of clients - in addition to Schlumberger's own internal R&D requirements - the facility features approximately 9,000 sq. ft. of laboratory space, 6,500 sq. ft. of equipment manufacturing and assembly space, and office space for research and product development, and engineering and software development.

Working together, the RFC's engineering, manufacturing, research and software groups design and develop fluid modeling software and state-of-the-art technology to assist the oil and gas industry with production challenges.

Currently, there are 64 staff, in addition to a few consultants. But Muhammad said that will increase. "We're adding at least seven more people in this quarter or the next one - four PhDs and three NAIT graduates."

Muhammad and his colleagues started moving into the centre in mid-December, leaving behind their old Edmonton Research Park offices because they were too small.

"We needed a bigger building and that particular centre was not designed for our R&D activities. The old space was only 19,000 sq. ft. This one is laid out much better."

The new facility cost $3 million to build and was a fast-track project - groundbreaking took place on May 4, 2004.

Deputy Energy Minister Ken Smith, on hand for the recent RFC grand opening, welcomed Schlumberger's investment and vote of confidence in boosting the oil sector. "To have those kinds of skills (here) is really important for Alberta."

Smith said that even though the province is very strong in oil and gas, "there's a tremendous amount of resources still in ground. We just need the brainpower to unlock it."

Referring to a Petroleum Technology Alliance Canada report, Smith noted that if an additional one per cent could be retrieved from existing conventional resources, it would mean another $35 billion in revenue and $4 billion in resource royalties, with 100,000 jobs created or sustained.

"This is not a dying industry. It's a long way from it," said Smith. "There is much, much more to be done."

(Laura Severs can be reached at laura@businessedge.ca)