Heavy Oil Research In Saskatchewan

Abstract

Saskatchewan's estimated 25 billion barrel heavy oil resource presents a ajor business opportunity for the oil industry, a major economic opportunity for the province, and a significant source of supply of petroleum products for Canada. However, the nature of the oil -viscous and heavy, and the nature of the reservoirs-thin and heterogeneous -make it a difficult resource to recover, transport and process. Less than two per cent of our heavy oil resource is, at present, considered to be producible and of this less than half remains. What are the opportunities and challenges that lie ahead? The 1990 demand for Saskatchewan heavy oil ranges from 100,000 to 150,000 barrels/day. Primary production by 1990 is expected to be between 50,000 – 60,000 barrels/day. Therefore, enhanced recovery of heavy oil will need to be between 40,000 and 100,000 barrels/day to meet the anticipated demand in 1990. This is a far cry from the present 9,000 barrels/day. Thus with the added complications of price uncertainty and diluent supply, the oil industry in Saskatchewan faces a major challenge over the next five years. What can the government do to help? The Saskatchewan Government has made it a priority to encourage greater production and use of this very large, but elusive heavy oil resource in order to optimize the economic benefits to the province. The four-point strategy being used to realize this policy to increase heavy oil production has been designed to:Create a more attractive fiscal regime.Establish more secure markets for heavy crude.Stimulate the development of the technology and know-how needed to effectively recover and utilize heavy oil.Ensure environmental and land-use issues are addressed. This article deals with the third point stimulating the development of new heavy oil technology. New technology is not the factor that will drive heavy oil development-prices and markets will But new technology is needed to allow heavy oil development. Permit me an analogy. Current recovery technology is analogous to a family sedan. While prices may fuel activity and markets may provide a destination to set out for, it is enhanced recovery technology that is our vehicle to get there. Unfortunately, heavy oil represents very rough terrain. Our current recovery technology-the family sedan-is not likely to get us over this terrain, ven if prices provide the necessary fuel and markets provide a clear destination. What we will need to get over this rough terrain is new enhanced recovery technology that is the equivalent of a 4 by 4 off-road vehicle. That is, new recovery technology and know-how will be needed if we are to take full advantage of improved prices and markets. How will we solve these technical problems? From a "funding" point of view, the oil industry is allocating funds to in-house research and to field pilot demonstrations. As well, the Governments of Saskatchewan and Canada have established The Heavy Oil Research Program, which is making $28 million available between April 1985 and March 1988.