Alberta boosts bitumen numbers

Gary Park

For Petroleum News

A fourth oil sands region and continuing advances in technology have enabled Alberta to post staggering increases in its bitumen resources, according to the provincial government’s Energy Resources Conservation Board.

With the inclusion of 406 billion barrels from the undeveloped Grosmont deposit — the least known of the formations after Athabasca, Cold Lake and Peace River — Alberta now has an estimated 1.5 trillion barrels of resource, the regulator said.

However, the Grosmont bitumen is trapped in limestone rather than sand and still lacks the production methods to convert the deposit into commercial reserves.

Of the total resource numbers only about 170 billion barrels are currently viewed as exploitable using proven methods of extraction and processing.

But Carol Crowfoot, co-author of the ERCB’s annual reserves report and the board’s chief economist, said in-situ production using steam-assisted gravity drainage will underpin the growth rate over the next decade.

Thermal recovery now accounts for about half of the 1.49 million barrels per day extracted from the oil sands and production is forecast to reach about 3.2 million bpd by 2020, with Cenovus Energy leading the way.

In-situ production rose by 14 percent in 2009, while the pioneering mining operations also rose by 14 percent, largely due to the introduction of Canadian Natural Resources’ Horizon project.

The Grosmont deposits, following unsuccessful pilot projects in the 1970s and 1980s, took their biggest step forward in 2006 when Sure Northern Energy, a unit of Royal Dutch Shell, paid more than C$500 million for rights to 185,000 acres controlled by Husky Energy.

Startups pressing ahead

Laricina is targeting the launch of a 1,800 bpd operation later this year, with company President Glen Schmidt confident the better Grosmont projects will eventually be “every bit” as successful as the well-establish operations in the mining region.

He said carbonates require less steam at lower temperatures and pressures than conventional in-situ development, which Laricina hopes will result in lower operating costs.

The ERCB report said the McMurray-Wabiskaw deposit, which is dominated by open pit mining, declined by 0.4 percent in 2009 to 959 million barrels, while Cold Lake (re-evaluated for the first time in 10 years) recorded a 20 percent decline to 33.8 billion barrels.

It also noted that Alberta has produced 7 billion barrels of raw bitumen since the oil sands came onstream in 1967, or less than 0.5 percent of the available resource, compared with the 16 billion barrels of conventional crude pumped in the province since 1914.

Conventional oil production slumped 9 percent last year to 461,300 bpd, leaving about 3.5 billion barrels to be developed, although the ERCB says new technology is starting to unlock tight oil formations such as the Pembina Cardium play.

Coalbed methane accounted for 7 percent of Alberta’s total gas production last year and is expected to reach 20 percent by 2019.

No reserves were assigned to shale gas, although estimates place the resource at 850 trillion cubic feet.