Development Of Heavy Oil And Natural Bitumen In Western Canada

Abstract

Abstract Activity in Alberta and Saskatchewan heavy oil and bituminous sands regions is widespread with projects of sufficient number and scope to produce a significant quantity of heavy oil and bitumen. This paper describes in general terms the location and nature of several projects in each of the prime developmental areas, with special attention to the drilling, production and transportation methods developed. Although numerous new commercial scale projects were expected to proceed in 1986, the drop in crude oil prices and shortage of cash flow since early 1986 has resulted in several postponements. The two oil sands mining projects in the Athabasca deposits continue operation with major efforts to reduce cost and defer projects for increased production. The vast resources of the area have been defined, the development of recovery technology and production systems is well advanced. Significant new production from these deposits will not be achieved until crude prices stabilize at levels above the recent U.S. $14 – $15 experienced. Introduction In Western Canada, resources of heavy oil and natural bitumen occur primarily in west-central Saskatchewan and northeast Alberta. Alberta's resources are the most significant in ultimate potential. The resources occur primarily in widespread Cretaceous sands with some potential sources in underlying carbonates. The crude oil is generally of heavy gravity 20 ° – 25 ° API in the south-east deposits and transitions to natural bitumen of 8 ° – 12 ° API in the northwestern deposits. Recovery methods span the entire technical and operational spectrum from near conventional through various thermal and other in-situ methods, to the oil sands mines in the Athabasca deposits. Production of raw bitumen and heavy oil exceeds markets available in Canada. A well developed transportation and marketing system delivers most of the crude to the U.S. markets primarily in PADD II (Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin). The emerging technology in recovery is supported by advanced technology in the application of slant well drilling, horizontal well drilling, and innovative water source and re-use methods. The price collapse of 1986 has caused the heavy oil and bitumen programs to be re-evaluated and, in many cases, delayed or reduced in scope. The certainty that remains for the industry is that an abundant resource has been defined over a vast area, technology has been established or is in advanced development to exploit these resources, and the fiscal and administrative policy of the governments is supportive of heavy oil and bitumen development. Occurrence of Heavy Oil and Bitumen The deposits of heavy oil and bitumen in western Canada, primarily in Alberta, are among the largest known in the world. The classification as bitumen or heavy crude oil used in this paper conforms with the practice in Alberta which defines natural bitumen as a viscous mixture of heavy hydrocarbons which, in its naturally occurring state, will not flow to a well. Heavy crudes are those mixtures which may flow naturally and have density greater than 900 kg/m3. For ease of reference, Alberta has adopted a geographic nomenclature for the bitumen deposits as Peace River, Athabasca, and Cold Lake (Fig. I).