Heavy Oil Innovation Haunted by Low Oil Prices and Bad Memories

Abstract

Oil production from heavy oil wells in western Canada jumped after One of those wells is owned by Canadian Natural Resources (CNRL), which reported that production rose 50% (SPE 196187). The gains “have proven the economics of continuing the operation of the downhole electric heat and CNRL will be applying to continue the enhanced oil recovery process,” according to a report to the Alberta Energy Regulator. Still, those heating cables made by Salamander Solutions are a tough sell. It is up against depressed heavy oil prices, the high cost of electricity in some locations, and long memories of heating cables that failed. “I talked to an operator who told me the reservoir performance when the heater lasted was great, but he would never do it again,” said John Karanikas, the chief technology officer for Salamander, who said that none of its cables has gone out in a customer’s well. Older cables required multiple splices to connect 100–200 m sections. If one of those weak points failed, the rest of the line went out like a string of lights after a single bulb fails, said Scott Penny, general manager for Petrospec Engineering, a partner in the business that installs the heating cables. Salamander’s cables can heat a well more than 7,000 ft long without a splice, Karanikas said. The company is working on planning some complicated installations where a splice is required. The company has put a lot of work into more durable ways of connecting cables, which it has patented. Heating cable technology was developed by Shell, which needed electric cables capable of heating rock to 650°F—which required an electric cable that could heat to 1200°F. In comparison, heavy oil is easy. It only needs to reach 300°F. (Oil shale is kerogen-rich rock where extreme heat can extract a lot of oil, which is different that oil in shale, which is in ultratight rock that is released using fracturing.) Shell tested the cables by running them at even higher temperatures, jolting them with extreme power surges, and simulating years of hard use, Karanikas said. The cable passed those tests and worked in the field, but Shell dropped oil shale in favor of more conventional oil and gas options. Salamander was created to market the heating cable technology, with a staff made up of many veterans of the development process. Tough Customers Both tests in the recent paper were in older wells in a heavy oil field. The many wells like those, which are still on primary production, could offer a large market for electric heating. The Salamander heater cable in the CNRL well was installed by Shell, which sold the field to the Canadian company. Shell was looking for a heating alternative to steam that did not require costly casing upgrades to handle steam heat, said Carl Stretch, a Shell engineer who worked on the project.