Expert Viewpoint with David Hin-Sum Law

Q. What exactly is heavy oil?

A. The generally accepted definition of heavy oil is: a type of high-viscosity crude that may, or may not, naturally flow into a well bore. The density or specific gravity of the crude makes it heavier than conventional light oil. Most of the heavy oil will certainly only flow to the surface with assistance. Some tar-type heavy oils in Canada are found in near-surface deposits, which can be mined by open cast means.

Q. Why is heavy oil suddenly newsworthy?

A. This is due to a number of “negative” factors: the high price of crude oil; concerns about security of supply from some politically unstable areas; the forecast of declining conventional oil production; and global oil demand that is about to out strip supply.

However, there are also some “positive” reasons: improved profitability; technical advances that have improved productivity; enormous reserve size; low geological risk; low capital investment required for non-thermal primary recovery projects; and a perceived reduction in the environmental issues associated with sand disposal and greenhouse gas emission.

Q. How would you describe the current state of the heavy oil industry?

A. In the past, the majority of heavy oil production has come from just a handful of countries: Canada, Venezuela, the USA and China. The volumes being produced have been relatively modest, when compared to orthodox oil production, partly due to low recovery rates. However, technological resources are now being focused towards heavy oils. Not surprisingly these developments are starting to improve the performance of heavy oil recovery.

Moreover, whenever heavy oil is produced, it usually requires significant energy to bring it to the surface, and further investment in time and energy to upgrade, transport and refine it, which is always going to add expense. In addition, and this is becoming very significant, many observers feel that the environmental issues associated with heavy oil recovery are not being addressed.

 Q. What is important now in the heavy oil industry?

A. One needs to recognize that existing heavy oil recovery technologies developed by the majority of the heavy oil production countries may not be directly applicable to other new countries considering heavy oil development. Countries such as the former Soviet Union, Kuwait and Brazil, to name but a few, are actively looking for ways to develop their heavy oil. For the heavy oil “knowledge bank” this is important because these countries have different reservoir characteristics and therefore their parameters are providing a new dimension and impetus to research previously undertaken, which can now be revisited with a new focus.

            From an industry perspective, we need a better understanding of reservoir characteristics and also what kind of heavy oil we are dealing with, so engineers can predict and, effectively assist, its flow.

 Q. Are you looking for further innovations to come from the heavy oil industry itself, equipment manufacturers or the service sector?

A. All of them, plus research initiatives and detailed development provided by the R & D organizations and the academic world, with modeling software and monitoring hardware coming thick and fast from the computer and IT industries. There is no single silver bullet but a multidisciplined integrated solution—each player in the industry has their role to play in this.

 Q. Can you break this down any further?

A. There should be a whole raft of initiatives available to the heavy oil reservoir engineer to choose from when looking to improve recovery: different tools, different modeling techniques and different ways to drill the reservoir.

For example in Venezuela where heavy oil can naturally flow to the well bore due to its relatively low viscosity, a greater understanding of the geology of the reservoirs has meant that the scientific placement of multilateral wells has ensured that drilling efforts are becoming more productive. While fifteen years ago, most of Canada’s heavy oil, which could not naturally flow to the well bore, was produced from vertical wells, nowadays steam assisted gravity drainage (SAGD) using a pair of horizontal wells is the most common form of the tar-type heavy oil recovery. This has only been possible due to advances in drilling technology.

 Q. Do you think SAGD is the way forward for thermally assisted recovery?

A. SAGD is a robust thermal recovery process, which has revolutionized the heavy oil industry in Canada. However, SAGD was developed to deal with Canadian reservoirs and their distinctive heavy oil characteristics, and if the method is to be successfully exported, it will also have to be adapted. But SAGD is definitely the future for heavy oil in Canada.

 Q. Are there any environmental issues with the cold production method?

A. Cold heavy oil production with sand (CHOPS), a primary heavy oil recovery method used in Canada, involves the drilling of vertical wells into the heavy oil reservoir and, uses progressive cavity pumps to remove both heavy oil and sand to the surface. The essential part is that sand is encouraged to flow, usually in large quantities, to achieve economic oil production rates. This sand causes a great deal of damage to equipment (pumps and valves) as well as problems associated with well failure.

However, environmentally there are other issues, namely ground settlement and the need to dispose of this sand once the heavy oil has been recovered, in an environmentally safe manner. This can be a significant operational cost.

On the other hand, cold production in Venezuela is quite different from that in Canada. Economic oil production rates can be achieved using multilateral wells without sand production. Sand avoidance and exclusion schemes are possible, but they can seriously reduce the flow of heavy oils to the point where the well becomes uneconomical. It is a double-edged sword: a compromise between maximum oil production and minimum sand production.

 Q. And new challenges?

A. A very real challenge is offshore heavy oil recovery as most of the recovery technologies nowadays are developed for land-based heavy oil and cannot usually be applied to offshore situations where working space is limited. For example, it is difficult to house steam generating equipment on an offshore platform. As a result, the heavy oil industry must address the problem of replacing steam-assisted recovery with something else.

 Q. What is likely to be important in the future?

A. Thermal recovery has contributed to dramatic advances in the heavy oil industry in recent years, and indeed continues to do so. It is certainly the part that everyone is focusing on at the moment because it gets you the better recovery factor. Thermal recovery is also being considered as a follow-up recovery process after primary production to recover more oil from the reservoir.

However, one of the big drawbacks is the significant amount of the greenhouse gas, CO2, emitted when heating the steam for thermal recovery. This is definitely going to be an issue for future resolution.