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Fresh lift for revolutionary technology
Two Canadian juniors, Petrobank Energy and Resources and Duvernay Oil, have hitched up to develop 100 million barrels of oil resources in northwestern Alberta.
To gain a 50 percent operating interest in the Dawson property and 10 percent of production, Petrobank will contribute its patented and pioneering crude oil recovery technology and Duvernay, primarily a natural gas producer, will have a chance to commercialize its heavy oil holdings.
If the technology succeeds, the recovery factors could soar to 70-80 percent of original oil from 8-10 percent.
“If it works, there’s lots of upside for both companies,” said Duvernay President Mike Rose. He said the company is eager to roll out its technology, currently being tested at the Whitesands demonstration oil sands facility in northeastern Alberta, into other reservoir applications, domestically and internationally.
The process, known as THAI (toe-to-heel-air-injection), employs combustion to ignite oil underground, transforming it into a higher value product that is forced toward the production wells. It was first developed at the University of Bath in England.
Whitesands is testing a variation of the THAI process to further increase the quality of the produced oil and hopes eventually to produce 100,000 barrels per day.
Preliminary work on 25,000 acres Petrobank is also conducting preliminary work to use the technologies on 25,000 acres of oil sands leases in Saskatchewan.
If it can establish a viable alternative to natural gas-generated steam that is the currently favored method of melting bitumen deposits, it is likely to be swamped with interest from larger state-owned oil companies who are candidates to license the process.
But Bloomer said striking a deal with a major would not be consistent “without business plan and strategy, as it would slow us down. We want to move with people that are like us and we’ll pick our partners strategically.”
However, he said discussions are taking place with international parties as Petrobank positions itself in a “wide fairway” of opportunity.
Bloomer indicated a new partner could be secured within six months.
UBS Securities Canada analyst Andrew Potter said that if the Duvernay venture works it “could open the doors to another large global resource base.”
—Gary Park
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