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Oil sands surpass conventional crude production in Alberta All major reserve categories decline in 2001, despite record drilling; established natural gas reserves could be gone in eight years, conventional crude in 6.5 years Gary Park PNA Canadian Correspondent
Alberta crossed a threshold in 2001,with production from the oil sands region surpassing conventional crude for the first time, the beginning of a trend that will see the oil sands contribute as much as 75 percent of output within 10 years.
The Alberta Energy and Utilities Board reported that the province produced 272 million barrels of bitumen last year, compared with 261 million barrels of conventional crude.
Reserves of crude bitumen, conventional oil and natural gas all declined despite record drilling levels across Alberta.
Reflecting the maturity of the province’s industry, the board estimated that if no more oil or gas were found, established gas reserves of 42 trillion cubic feet would disappear in about eight years, while conventional crude reserves of 1.7 billion barrels would be gone in about 6.5 years.
Only 2 percent of oil sands produced But the oil sands resource is placed at 175 billion barrels and, so far, only 2 percent of the initial established reserve has been produced.
Remaining established reserves for mineable bitumen include 4.46 billion barrels for the Syncrude Canada Ltd. project, 2.89 billion barrels for the Suncor Energy Inc. leases and 1.12 billion barrels for the Albian project scheduled to come on stream early in 2003.
The remaining establish conventional crude reserves dropped 4.6 percent from 2000, with only 56 percent of production or 148 million barrels replaced through exploratory and new enhanced recovery schemes.
The board said new discoveries in 2001 added almost 40 million barrels to light and medium oil reserves and 17.6 million barrels to heavy crude reserves.
The board said it believes a 1988 study placing potential recoverable reserves of crude at 19.7 billion barrels is still accurate. Of the 19.7 billion ultimate potential, 14.5 million barrels have already been produced.
Successful wells down Successful oil wells dropped 18 percent in 2001 to 2,220 from 2,700 in 2000. Provided crude prices remain strong, the board forecasts that 1,800 and 2,100 successful wells will be completed in 2002 and 2003, then average about 2,400 a year until 2011.
However, production of conventional oil, oil sands and pentanes plus is expected to climb from 1.53 million barrels per day to 2.7 million barrels per day as a result of heavy investment in the oil sands region.
Alberta ended 2001 with remaining established gas reserves at the field gate plant of 42 trillion cubic feet, continuing a 20-year decline in reserves despite an all-time high of 9,682 successful wells which replaced 67 percent of production compared with 90 percent in 2000 from 8,264 successful wells.
The board expects to complete an updated study of the province’s ultimate marketable gas potential in 2003, revising a 1992 forecast of 200 trillion cubic feet, of which 106 trillion cubic feet has been produced and consumed.
Drilling to average 10,000 wells until 2011 Drilling is predicted to range from 9,500 to 11,000 wells per year for the 2002 to 2005 period and average 10,000 wells per year until 2011, with production declining by 2 percent a year from 2006 to 2011, largely because new pools are smaller and new wells exhibit lower initial production rates and steeper decline rates.
A combination of growing Alberta demand for gas and declining production could soon affect volumes available for shipment from the province.
The board’s mandate requires that gas needs of the core market — residential, commercial and institutional consumers — must be met over the long term before any new gas removal permits can be issued.
But the board noted that other potential sources, such as frontier areas and coalbed methane, could supplement supplies of conventional gas. Remaining reserves of ethane were placed at 1.6 billion barrels and other natural gas liquids were estimated at 1.3 billion barrels — both largely unchanged from 2000.
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