SAGD projects in the oilsands are recognized as some of the highest cost oil extraction operations in the world. According to Petroleum Technology Alliance Canada (PTAC), the bulk of the cost comes in drilling and completions activities, and there is significant room for improvement.
However, budgets have been cut dramatically in the current market downturn, and that means that new technologies that could help reduce costs face a steep uphill battle to get to commercialization.
“In general, high costs have diminished the economic attractiveness of oilsands projects when oil was at US$100 per barrel, and are now threatening the industry with numerous additional project cancellations with oil in the range of US$30-$50 per barrel. It is crucial to reduce costs in order to sustain the industry,” PTAC says in a report circulated last week that was prepared for Natural Resources Canada (NRCan) under its Oil Sands Competitiveness Initiative.
“SAGD project economics and environmental performance can be significantly improved through the application of emerging technologies to bring down the cost of drilling and completion.”
Between March 2015 and April 2016, PTAC conducted a technology scan and gap analysis connecting oilsands producers and technology developers in order to identify high-value improvement opportunities.
The main challenges identified were the speed of drilling and uncertainties that impact the process, as well precision of well placement.
PTAC says that 20 solutions were identified during project meetings, but they hit a wall when it came to accessing funds to work towards commercialization.
“These meetings with senior oilsands producers provided close interactions between technology solution providers and oilsands companies for the purpose of aligning users and providers of technology,” PTAC says.
“However, the development and launching of [joint-industry projects] was severely affected by budget cuts imposed as a result of low oil prices and the industry downturn.”
Here are the five highest-value solutions the group identified:
- Precise TVD measurementsPrecise measurements of True Vertical Depth (TVD) are critical in SAGD because total recovery is maximized by placing the producer as close as possible to the bottom of the reservoir while staying inside the reservoir, PTAC says. “This project involved a new approach to measure depth using two available well parameters. A study was conducted to determine the feasibility, reliability and cost of the new approach. Pending positive conclusions from the feasibility study, the next step would be to advance a field trial JIP with interested oilsands companies.”
- Monobore SAGD Wells“The monobore concept could significantly reduce costs of drilling SAGD wells but would entail risks that are not fully understood. A preliminary study could be considered to better understand risks and potential cost savings,” PTAC says. “Critically, a number of field trials would be needed to prove and fully understand the risk-reward balance.”
- New active ranging technologyPTAC says there is a new system being developed that could reduce costs for ranging, or the guidance system that allows the injector well to be drilled at a precise distance from the producer well. However, the precision performance of the system would need to be demonstrated by conducting field trials. “At the present time the novel system is only applicable to shallower SAGD well pairs. Future technology improvements include accuracy and power advances. The technology could also be used for precisely placing infill wells and avoid collisions with observation wells.”
- New passive ranging technologyPTAC says a new technology is being developed that uses a systems approach to reduce costs while maintaining accuracy. However, field demonstration trials are required to prove the cost and performance claims.
- Multi-lateral junction for SAGDIn conventional oil and gas, producers sometimes employ multilateral wells, where a single wellbore is drilled from the surface and a multilateral junction is installed depth. This reduces costs and environmental impact. “This approach could also be applied to SAGD wells in the oilsands; however, SAGD operating conditions are far more severe that in conventional applications because of steam injection and the high temperatures to which the well is subjected,” PTAC says. “The first step in implementing this project would be to perform a feasibility study to clearly understand design requirements and costs, as well as the real potential for overall improvements in costs, production, steam-to-oil ratio, and environmental impact.”