Canadian In-depth Oil Patch Analysis
The Canadian Oil Sands are large deposits of bitumen, or extremely heavy crude oil, located in northeastern Alberta, Canada. These oil sands consist of a mixture of crude bitumen (a semi-solid form of crude oil), silica sand, clay minerals, and water. The Athabasca deposit is the largest reservoir of crude bitumen in the world and the largest of three major oil sands deposits in Alberta, along with the nearby Peace River and Cold Lake deposits. Together, these oil sand deposits lie under 54,000 square miles (140,800 square kilometres) of sparsely populated boreal forest and muskeg (peat bogs) and contain about 1.7 trillion barrels of bitumen in-place, comparable in magnitude to the world’s total proven reserves of conventional petroleum.
With modern non-conventional oil production technology, at least 10% of these deposits, or about 170 billion barrels were considered to be economically recoverable at 2006 prices (the average crude oil price in 2006 was US$58.30), making Canada’s total oil reserves the second largest in the world, after Saudi Arabia’s. The Athabasca deposit is the only large oil sands reservoir in the world which is suitable for large-scale surface mining, although most of it can only be produced using more recently developed in-situ technology.
What are oil sands and heavy oil?
The oil sands is a mix of naturally occurring bitumen, a thick, sticky oil, and abrasive sand. Oil sands in the Athabasca deposit is composed of sand, oil, clay, and water. The oil in the oil sands is called bitumen and it looks very much like tar because it is black, thick and heavy.
Geologists speculate that the oil sands formed millions of years ago from the remains of tiny creatures buried in the seabed of an ancient ocean that covered Alberta. Warm temperatures, combined with the slow accumulation of thick layers of silt and sand, pressure cooked these remains and converted them into oil. This oil eventually migrated, saturating large areas of sand near the surface. Bacteria then fed on the lighter hydrocarbon chains in the oil, leaving behind only the molasses-like bitumen.
Conventional crude oil is oil that flows naturally or that can be pumped without being heated or diluted. Crude oil is commonly classified as light, medium heavy or extra heavy, referring to its gravity as measured on the American Petroleum Institute (API) Scale. Extra heavy oil (bitumen) has an API gravity of less than 10°. Heavy oil is oil that is not recoverable in its natural state through a well by ordinary production methods. Heavy oil can be produced with horizontal production wells. Extra heavy oil is produced using sand production and worm hole technology.
Viscosity is the property that defines a fluids ability to flow. The viscosity of bitumen at virgin reservoir conditions (~12°C) is 1.7 million cP; [viscosity varies from 1.0 to 1.7 million cP] in other words, the consistency of a warm hockey puck.
How are oil sands and heavy oil used?
Heavy oil and bitumen are used to make the same petroleum products as conventional forms of crude oil; however, more processing is required. Bitumen lends itself more towards diesel and jet fuel than gasoline and lighter products associated with conventional oil.
How are oil sands and heavy oil found?
Shallow oil sands are identified by thick viscous oil seeping from the ground. It is found with 10,000+ drill holes and to some extent seismic is used to delineate the thickness and extent in more detail of some of the high quality deposits. Deeper deposits have been identified using Automated 2-D Electrical Imaging, a geophysical technique that plots electrical conductivity variations in the earth.
How are oil sands and heavy oil produced?
Steam is often used to facilitate production by softening the bitumen, diluting and separating it from sand grains, and enlarging or creating channels and cracks through which the diluted oil can flow. The two most successful methods are cyclic steam stimulation and steam assisted gravity drainage (“SAGD”). Mining is also utilized to produce in a more shallow project.
How are heavy oil and bitumen processed?
Heavy oil and bitumen consist of large hydrocarbon molecules, which contain proportionately more carbon atoms than hydrogen atoms. Upgrading processes add hydrogen atoms and/or remove carbon atoms, which converts the bitumen into a product similar to conventional light crude oil.
At the extraction plant, the oil sands slurry (oil sands and water) enters a primary separation vessel where “froth” (a mix of air, water and bitumen) rises to the top, sand sinks to the bottom, and a blend of water, sand, bitumen and clay floats in the middle before going through a second separation process to extract additional bitumen. The bitumen froth is further processed to remove more water and solids, then diluted, and finally passed through centrifuges, or inclined plate settlers, to eliminate the last of the water and solids. The extraction process recovers more than 90 percent of the bitumen fed to the plant. (This is applicable to mining and not to SAGD.)
Upgrading
The nature of bitumen requires that its large molecules be split, or “cracked” into smaller fragments. Adding hydrogen (hydro-cracking) or removing carbon (coking) creates smaller hydrocarbon molecules that are easier to process.
The bitumen upgrading process removes most of the sulphur before the product is shipped to refineries, creating a sweet synthetic crude oil. The petroleum products are sent to a hydrotreater, where chemical impurities and trace metals are removed. This prevents the synthetic crude oil from changing its chemical composition while en route to the refineries. (SAGD may involve shipping raw bitumen with diluent directly to the refineries without upgrading.)