Good to see THAI has been independently verified by a third party company.
Oil Sands Review
May 28, 2010
International Interest Growing In Petrobank's THAI
By Lynda Harrison
Now that Petrobank Energy and Resources Ltd.'s oilsands recovery process has been verified by a third-party the company is ready to take the patented toe-to-heel air injection (THAI) technology to the outside world, its annual meeting heard this week.
"We are very, very, very, very far down the track on some pretty large licensing agreements internationally," said Chris Bloomer, senior vice-president and chief operating officer, heavy oil and director.
Interest in THAI has been received from North America, Venezuela, central Asia, Russia, the Middle East and African countries, he said. Several companies have signed confidentiality agreements, allowing them to assess the technology, to be followed by a licensing agreement upon approval.
There are nine trillion bbls of heavy oil resources in place in the world, "and that's the playground that we look to apply our technology to so it's a vast potential resource," he said.
[Figure 1]
"There's a lot of oil out there that doesn't have a solution and when people look at our technology they realize that this is the solution," Bloomer told the meeting.
Petrobank's reservoir engineering firm, McDaniel and Associates Consultants Ltd., completed its first comprehensive evaluation of the THAI process at Conklin, concluding that the project is proving the process (DOB, March 12, 2010).
McDaniel has indicated it will issue a THAI-based reserves and resource estimate at Conklin once commercial production rates (greater than 250 bbls a day per well) have been sustained for at least three months.
Response from international companies has escalated over the past year, said Bloomer. The whole idea of combustion has changed worldwide and is now seen as the technology of choice, he said. "If we've done anything in this process we have revitalized that part of the industry but we have the technology that is the breakthrough in all of that."
Examples of the business model it will pursue in international arrangements are at Dawson and Kerrobert. Petrobank contributes the technology and in return gets half the resource and 10% gross royalty interest, said Bloomer.
The Dawson project in the Peace River area is planned as a two-well development targeting the Bluesky formation to further demonstrate the commercial potential of THAI. The 50-50 joint venture with Shell Canada Ltd. aims to boost the area's typical 10% recovery potential to up to 80%.
The partners have received conditional approval from Alberta Environment to proceed with the project. Construction is to begin shortly after they get final regulatory approval.
Both Petrobank and Shell may jointly expand production and reserves under the agreement using the technology on third-party lands or jointly acquired properties in the region.
Kerrobert, a 50/50 joint venture with Baytex Energy Trust, is the first application of the THAI technology in a conventional heavy oil reservoir. Petrobank is using knowledge gained from its Conklin demonstration plant at Kerrobert to tap into a heavy oil belt that runs from Lloydminster into the Kerrobert area east of Hardisty. Air injection started in October 2009 and two well pairs were placed on production the following month. High-temperature combustion has been confirmed and the first sale of oil was in January 2010.
Initial fluid volumes have tested at rates of up to 300 bbls per day per well, with oil cuts ranging from zero to 40%. The 10-degree API heavy oil has been upgraded to as much as 14 degrees API. Targeted production rates are 600 bbls of oil per well. The company anticipates having a fully commercial operation by the end of this year.
It also plans to commercially develop the initial earned lands which involves an additional 10 production wells in this portion of the pool. The expansion is scheduled to start in the third quarter of this year, targeting total project volumes of 7,200 bbls of oil per day.
In first-quarter 2010, a pump reconfiguration was completed and the wells are onstream (DOB, May 20, 2010). The project represents the potential of THAI on a global basis because it represents the type of reservoir that is present internationally, said Bloomer.
The company filed two new patents on THAI enhancements in the third quarter of 2009 and it now has a total of eight patents in its intellectual property, the most recent one granted in mid-May.
Third-party analysis has acknowledged THAI's larger exploitable resource base. "It's a very, very important step to the proving of the technology that we're getting recognition for impacting much more resource than other technologies like SAGD (steam-assisted gravity drainage)," said Bloomer. "We will get a higher recovery rate, lower capital costs, improved economics, our operating costs are much lower than competing technologies and long-term sustainability is really, really important and that's one of the things we strive for. This is a long-term sustainable technology."
THAI could be used offshore as well, as depth is not an issue, he said. |
