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Cenovus Energy raises oil sands bar
Gary Park For Petroleum News
Oil sands power Cenovus Energy has set its sights on a five-fold hike in production over the next 10 years to 300,000 barrels per day (net of its joint venture with ConocoPhillips), drawing on an updated “best estimate” of bitumen initially in place of 137 billion barrels.
In releasing an independent evaluation by McDaniel & Associates Consultants, Cenovus said its average finding and development costs are now C$8 per barrel.
The increase will primarily come from its Foster Creek and Christina Lake in-situ operations along with new projects at Narrows Lake and Grand Rapids.
Of the new bitumen initially in place estimate, 56 billion barrels are rated as “discovered,” which means at least one well has been drilled per section of land.
McDaniel believes much of the bitumen initially in place deposits are unrecoverable using current technologies because their bitumen concentration is too low, or other geological characteristics are considered unfavorable.
Those deposits that McDaniel lists as “exploitable” with current technologies are calculated at 14 billion barrels (before royalties at U.S. reserve pricing).
The company has undiscovered bitumen initially-in-place of 82 billion barrels.
Further assessment has boosted expected gross production capacity at Foster Creek to 235,000 bpd and Christina Lake to 258,000 bpd, a combined 15 percent increase over the previous target.
Narrows Lake next Narrows Lake, located near Christina Lake, is next on the Cenovus schedule for development, with the filing of a regulatory application expected shortly, including the possibility of deploying a solvent-added process along with steam injection.
Grand Rapids is scheduled for the test of a steam-injection well pair this fall, with a regulatory filing possible by late 2011.
The region includes the current Pelican Lake polymer flood operation and a potential future exploitation of the Grosmont carbonate formation.
Evaluation work is proceeding for a number of other projects that could come onstream after 2019 and there are plans to collect seismic data and drill stratigraphic wells on seven more promising oil sands assets over coming years.
Cenovus told an investor day June 17 that its objective is to have commercial projects approved by regulators with total capacity of 400,000-500,000 bpd net by the end of 2015.
Cenovus said that applying a manufacturing approach for project development by expanding in phases, approves the efficiency of each new stage and allows Cenovus to learn from the previous phase.
The company is budgeting C$40 million a year for research and development, doubling its previous spending. It currently has about 50 R&D projects under way and expects to introduce at least one new commercial technology each year, aiming to improve oil recovery, lower operating costs and shrinking the impact on the environment. It said that about 75 percent of these projects have environmental improvement as their primary goal.
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