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Edmunds Difficult Birth of Sagd-1

Edmunds Difficult Birth of Sagd-1

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On the Difficult Birth of SAGD

Neil Edmunds is a specialist in the thermal recovery of bitumen and heavy oil, and development of related simulation software. He has over 20 years of experience, including reservoir, production, and software engineering and has practised as a specialist, manager, and entrepreneur. Mr. Edmunds earned a B.Sc. in mechanical engineering at the University of Alberta in 1978. He began his career with Gulf Canada and went on to AOSTRA and Vikor Resources. He joined the UTF project in 1986, working on the Phase A, HASDrive, and B–pattern pilots until 1992. During the Phase B design period, he developed the Gensim coupled wellbore/reservoir simulator. In 1993, Mr. Edmunds joined CS Resources with responsibility for design and construction of the Senlac Thermal Project, a twin–well SAGD scheme in southwest Saskatchewan, and was later appointed vice president of recovery technologies. He retired from CS in 1997, and is currently engaged in a new software venture. Mr. Edmunds is a member of APEGGA, the Petroleum Society of CIM, and the SPE. He is the author or co–author of over 25 papers and patents on in situ technology, and was an SPE Distinguished Lecturer in 1996 – 1997.

Is There any Evidence SAGD is Better Than Conventional Methods?
The best evidence of this is that the more successful SAGD projects have demonstrated comparable oil/steam ratios (OSRs) to those of vertical/thermal implementations, even though the SAGD projects were conducted in reservoirs of significantly lower quality. This is illustrated in Figure 1, which compares the realized or projected OSRs of four actual projects plus a projected “prime Athabasca” case. Reservoir quality is characterized by permeability times thickness. It can be seen that approximately twice the kh is needed to achieve the same OSR using vertical technology, as can be obtained with twin-well SAGD. Pikes Peak and Cold Lake were each conducted in essentially the best reservoirs ever found in their respective formations; whereas the pay zone at Senlac, at only about 40 feet thick, would have failed most screening criteria that have been proposed for vertical CSS or steam flood. The low value of kh assigned to the UTF B Pattern is actually on the generous side. A low–energy estuary resulted in good quality sand units (5 Darcys) but with frequent silty laminations (25 – 250 mD), which prevented easy passage of steam around them. The reservoir was too heterogenous to estimate an effective bulk permeability, but geostatistical simulations and the observed project performance suggest an overall effective SAGD permeability of about 1.0 ± 0.3 Darcy. The projected Prime McMurray case is based on 40 m of 5 D sand, representing perhaps a top–decile Athabasca reservoir. Such reservoir quality is not ubiquitous over the deposit, but is known in commercial quantity at a number of widely-separated places.(5) Finally, OSR is by far the most important economic indicator for steam recovery, but the high productivity of SAGD pairs also promises lower unit costs for drilling, workovers, wellbore heat losses, and field operating labour.

This contribution attempts to address some questions suggested by the series(1,2,3) to date. The answers are not all technical in nature: “Problems aren’t solved by technology alone; we also need a thorough understanding of social dynamics.”(4) After some select technical observations, this contribution is indeed an essay on social dynamics, as they relate to R&D in general, and SAGD development in particular.


An excellent article by S.M. Farouq Ali entitled, “Is There Life After SAGD?” was featured in our Distinguished Author Series here in the JCPT, in the June 1997, Vol. 36, No. 6 issue. Since its publication, Farouq’s article has engendered considerable discussion. Ever mindful of the need for healthy dialogue and debate (Yes! There have been some differing opinions!) we have invited a follow-up series of Distinguished Authors to offer their views on this thermal technique for promoting gravity drainage of heavy oils/bitumen using horizontal well technology.

E.S. Denbina Distinguished Author Series Chairman
FIGURE 1: COSR vs. reservoir quality, Canadian steam projects. 14 Journal of Canadian Petroleum Technology

Why Do All SAGD Wells Seem to Produce at 100 m3/d?
The UTF B pattern performance has widely come to be viewed as representative of the better Athabasca reservoirs. Nothing could be further from the truth; at least 1/3 of the total Athabasca resource is better than the B pattern, and the top 10% is enormously better. The author hypothesises that this situation has resulted in a syndrome of significant under-design in many projects, exploiting much better reservoirs. In order to reconcile predictions for such reservoirs with UTF results (while assuming sand quality is comparable), unrealistically low values for k h , k r o i , and/or k v/ k h must be employed. Acceptable OSRs are nevertheless predicted, and the project proceeds. The resulting field design may be too conservative by a factor of two or three, in terms of unit–length well performance. Thus, facility and lifting(2) capacities are short by similar factors compared to the true potential of the wells, and individually the wells may be too long to approach this potential without hydraulic impairment.(6) After start-up, the expected (low) oil rate is easily achieved, but the OSR is found to be much poorer than predictions. This is because if injection and production rates are substantially lower than the natural potential, SAGD degrades to a large pool of very hot water and oil, with the steam zone pancaked at the top of the zone. Most of the heat goes to losses, and the accumulated condensate does not allow much oil to drain. “Performance is worse than expected, because the reservoir is better than assumed.” It has formerly been assumed that this situation would be evident from the producer (BHT), or conversely that operation at low subcool (i.e., at temperatures slightly less than saturated steam) would automatically imply good drainage and maximum performance. It now appears that this is not correct, because the measured BHT is only the average resulting from mixing together various streams from along the pair.(7) It is possible to have a few tens of metres producing live steam with maximum oil rates, while the rest of the well produces cool fluids at low rates per unit metre, and still obtain a normal subcool at the liner outlet. The recommended approach to production control in view of these conclusions, is simply to 1) control fluid production rate, not BHT; and 2) periodically increment the rate, then wait long enough to judge the effect on oil rate and OSR; and 3) thus optimize the fluid rate according to operating profit. When excess steam capacity is available, the optimum production rate will likely involve some live steam production. If lack of steam capacity prevents producers from being operated up to the point of nominal, but sustained, steam production, then some pairs should be shut in to allow proper operation of the remainder.

law to each phase and dividing gives krw/kro = 2.0 (µw/µo). This shows that only a small krw, and thus a reasonably low Sw, are required to drain twice the water under the same potential gradient as the oil; it also implies a value of kro that is fairly close to 1.0, given typical oil/water relative permeability functions for unconsolidated sands.(9) Viscous fingering or other channelling effects would strengthen these conclusions.

How Can Experts Disagree so Much?
In particular, how can eminent authorities in thermal recovery still doubt that SAGD will be commercially successful, or even that such a thing really exists? The answer would seem to be that, SAGD simply makes no sense from the point of view of persons experienced with vertical schemes. This is not the fault of insufficient sense, common or otherwise; it simply reflects a different worldview. The Nature of Scientific Revolutions (10) coined the phrase, “paradigm shift.” In Kuhn’s context (the progress of physical science since Copernicus), a paradigm is a set of shared assumptions which underlie and pervade a scientific tradition. Kuhn identifies an historical pattern in scientific fields, which begins when some new observation or calculation casts doubt on fundamental assumptions of existing theory. Resolution of such crises may require a paradigm shift: adoption of a whole new world view, and the simultaneous abandonment of the old. There is more than one working assumption of conventional and conventional–thermal reservoir engineering which is discarded in SAGD theory, but the key one is: “gravity is a weak force, a secondary perturbation on viscous mechanisms.” In most reservoirs, under conventional depletion, this is quite valid. It just happens to not be valid in the case of gas/liquid displacements (e.g., steam floods) in high vertical permeability units, with low viscosity liquids. These are conditions where gravity is dominant, and match those inside a steam chamber. But stating the creed like this, or even reciting dozens of papers in support of it, is not likely to win many converts; Kuhn shows why that is. In the first place, no one changes their whole world view without very compelling motivation, in fact without a crisis, to use Kuhn’s word. Conversion is thus a personal experience which can’t be forced by the words of others. In any event, those words often make little sense to the intended audience: “. . . new paradigms . . . ordinarily incorporate much of the vocabulary and apparatus . . . previously employed. But they seldom employ these borrowed elements in quite the traditional way. Within the new paradigm, old terms, concepts, and experiments fall into new relationships one with the other . . . Communication across the revolutionary divide is inevitably partial . . .” “. . . the proponents of competing paradigms practice their trades in different worlds . . . they see different things when they look from the same point in the same direction.”(11) Regular readers of this JCPT series may have perceived a certain flavour of “talking at cross-purposes” from one contribution to the next. A specific example comes from Farouq Ali’s discussion under Well Spacing: “A horizontal injector would accelerate the override, and accomplish little more than what is already happening.” Override is a negative word in the traditional paradigm: it is gravity, come to rain on the linear parade. But in the SAGD paradigm, SAGD is (a kind of) override, which is heat transfer and depletion; the object of twin horizontal wells is to accelerate recovery as much as possible, to minimize heat loss and maximize economic recovery. We say, “accelerate that override!” Similarly, if condensate convection was important, that would be an enhancement, not a “concern.”

How Important is the Condensate?
Farouq mentions “numerical simulations by Ito and Suzuki (which) clearly show that convection is far more important than conduction,” referring to the role of condensate carrying heat into the mobile oil zone. It is very difficult to agree, however, when one considers the actual heat capacity of the condensate. Ito and Suzuki’s results(8) predict an average depth of water penetration to only about the 200° C isotherm, starting at a 263° C steam chamber. Based on the associated change in enthalpy, the liquid water could carry and deposit at most about 18% of the heat of condensation of the same water, which was obviously left back at the front. Convection due to oil is around 1/5 of this; conduction is the only thing available to carry the remaining 78%. When it is considered that the water streamlines are nearly perpendicular to the temperature gradient (nearly parallel to the isotherms), then the convective heat deposition per unit volume of reservoir must be reduced by the sine of the angle between the streamlines and the isotherms—if the water travels exactly along the isotherms, there is zero net convection. Convection is then probably less than 5% of that due to conduction. Condensate is 50 – 100 times less viscous than any oil at steam temperature. If the flowing WOR is 2.0, then applying Darcy’s
January 1999, Volume 38, No. 1

If We’re so Smart, Why Aren’t We Rich?
In other words, if concept and performance projections have been essentially correct all these years, why have major commercial operations not yet appeared? The answer to this may be summarized as: there is a vast difference between a proven concept

and a working industrial technology.

The Task Force Model
The author doesn’t expect to create controversy by suggesting that few majors have met these challenges well in the past. A common approach to experimental projects has been to divide the work into familiar specialties, supported by a mix of regular staff, researchers, and consultants. Since each specialty will only be needed for a certain phase of the (one-time) project, many positions are filled with temporary and/or part-time secondments. Such a “task force” model is founded on the erroneous equation of a proven concept with a developed technology. Companies think of SAGD field projects as proof-of-application tests, to “determine” the economics of SAGD in a given reservoir; whereas in reality they are entering into the process of learning and creating the technology necessary to apply the concept. Without this appreciation, there is a great tendency upon failure to blame the concept, rather than improve the implementation. A useful attitude for organizations contemplating technology projects is to view them as 1) the making of mistakes; 2) learning from those mistakes; and 3) remembering the lessons. The task force model has serious problems in all of these areas. Making Mistakes Mistakes are inevitable, but they only manifest when you actually try something. The task force model often diffuses technical authority to the point where no one is quite responsible for deciding anything. Long debates ensue which pre-empt field experiment; the problems which then actually appear are only rarely among those previously debated. Seconded or contract personnel are insufficiently isolated from their regular duties in the parent organization. When things aren’t going well on their special project, they feel a powerful desire to return to their regular, successful career path. This is in proportion to the diffusion of technical authority; people will be motivated only to the extent that they feel personally responsible for actions and outcomes. Learning from Mistakes A task force is assembled from industry specialists. The problem is, it’s the wrong industry. The right one doesn’t yet exist, and no one is certain what the new specialties should be; nor how their individual efforts should be interfaced. Some emerging SAGD specialties, for example, are “wellbore thermohydraulics” and “3D steam trap dynamics.” Whether extra or interdisciplinary, many severe problems tend to get lost in the voids between task force specialties. No one recognizes a problem as quite their problem, or else as a problem that can be solved, or even, sometimes, as a problem at all. Working relationships are transient, limiting both precision and honesty of communication; home truths are left unspoken at critical times. Remembering Mistakes After a field pilot is decommissioned, the only remaining asset is intellectual. Given the difficulty of transmitting novel ideas by paper reports and statistics alone, this asset primarily resides in the minds of project contributors. From this perspective, the entire investment in a pilot project is ultimately towards training of personnel. The single-project task force model practically ensures eventual dissipation of this investment; very few groups have enjoyed continuity through a full business cycle.(13)

Concepts vs. Technologies
In Mastering the Dynamics of Innovation, James Utterback traces the history of many technological revolutions in diverse industries, demonstrating patterns which are familiar from Kuhn. but amplified by organizational dynamics. A theory or concept is a single thing that costs relatively little and is complete in one or two technical papers, and perhaps proven with a small-scale experiment. A technology, on the other hand, is a complete system of methods and tools, which requires the organized, long-term efforts of many talented people to create. Consider horizontal drilling: it’s a very simple concept, but there is an amazing amount of sophisticated technology utilized today in making it routine, including dedicated rigs. It took about ten years to develop the supporting bits and pieces, and scepticism about the practicality of horizontal wells was widespread until this was largely accomplished. If a new idea is sufficiently different, then a lot of existing tools, techniques, and rules of thumb become obsolete and must be replaced. Because even new paradigms are built from old ones, every individual and organization will grasp the new idea in their unique context, and none will have quite the same view of the implications—promise and problems—of the breakthrough at hand. Unexpected difficulties arise with every new piece of hardware or type of operation. Utterback calls this extended, painful process the “fluid phase.” Donnelly captured the essence of this phase, in his recent contribution to this series: “attempts to apply (new EOR) technology in every conceivable situation are made with many of these attempts ending in failure . . . there is a deluge of modifications to the original concept . . . many of these will . . . prove unfruitful.” The fluid phase ends when a dominant design finally emerges, as a result of demonstrated economic success. No one can objectively predict exactly what that design will entail, until after it has appeared; nor when it will appear, because no one can predict which problems will be encountered or what will be required to overcome them. In Utterback’s survey, a time scale of twenty years from initial concept to dominant process is not at all unusual. SAGD is going to take somewhat longer than this, it appears; but consider that a SAGD test is conducted in a remote and invisible place, and requires millions of dollars and typically five years to design, build, and operate. A reservoir is a “reactor” of uncertain properties and proportions, which is never reproducible from one experiment to the next. Needless to say, these aspects complicate matters greatly.

What’s the Biggest Hurdle? Paradigm Meets Organization
Technology development is necessarily an organizational activity, requiring large amounts of risk capital over many years. Established companies are the natural players, especially in the petroleum industry. Unfortunately, the effect of a truly radical approach is to: “. . . destroy the usefulness of the architectural knowledge of established firms; and since architectural knowledge tends to become embedded in the structure and information–processing procedures of established organizations, this destruction is difficult for firms to recognize and hard to correct.”(12) The “architectural knowledge” of an oil company includes things like property evaluations, exploration focus, project cash flow profile, scheme optimization, well completions, lifting equipment, treating economics, operating policy, maintenance profiles, and so on. All of this is lost in the jump to thermal production. For example, under primary production, sand control is harmful and expensive; but with thermal recovery, it’s both essential and generally benign to productivity.

A Proposed Model
Ongoing businesses concentrate on efficient execution of proven technical recipes, but technical development is the search for new recipes. The kitchen will get messy, there will be occasional smoke, and among the senior chefs an irresistible urge will eventually arise to put an end to experimentation and clean up. If technical development is an organizational activity, and if the organization needs a wholly different mindset from business as usual, what should it look like? The ideal characteristics of such a
Journal of Canadian Petroleum Technology

group might include that: • It is a permanent and separate business unit which reports the to parent organization at the executive level (all necessary management are members of the group) • It is chartered solely to develop and implement a specific technology opportunity (e.g., twin-well SAGD on lease X): no broad R&D mandate, no other operational responsibility. Members are full time and free of extraneous duties • It is of a minimum size, to maximize individual responsibility and challenge, and interdisciplinary communication • Group performance measured in terms of demonstrating hard technical parameters (e.g., SOR, CDOR) within an agreed budget and timetable • It designs, operates, and analyses all field tests, and with success evolves into the commercial group, by means of timely infusion of seasoned managers, and perhaps reassignment of the more easily-bored researchers The last ideal follows the observation that is easier to instill operating discipline into a formerly freewheeling research group, than it is to impose radical new technology on an existing operation. The best place to make converts is at cult headquarters.

The Petroleum Society is celebrating its 50th Anniversary!
We are initiating a worldwide membership drive. The Petroleum Society currently has 3,000 members.

This is how it works . . .
In every J CPT package during 1999 you will find a membership form (your mailing label will appear on the right side). Photocopy this form and pass it out to as many of your colleagues as possible. Have all of the forms returned to you and send them to us at once.

Your incentive is the prizes . . .
Mail or fax us five new members’ applications (with payment) and we will immediately REWARD you with a Petroleum Society Stainless Steel Travel Mug.

Was There Any Life Before SAGD?
It remains mystifying that enthusiasm for vertical/thermal technology should exist at all in Canada: not because of SAGD’s promise, but rather because of the failure of California-style technology to address the vast bulk of Canadian heavy resources, despite several decades of effort and hundreds of millions of dollars. The two vertical projects in Figure 1, essentially the only successes to date, generated marginal economic returns from the cream of reservoirs. Should we hope for reservoirs that fit a known technology, or should we build technologies that fit our known reservoirs?

- OR -

Mail or fax us ten new members’ applications (with payment) and we will immediately REWARD you with a Petroleum Society Golf Shirt.

- OR -

Mail or fax fifteen new members’ applications (with payment) and we will immediately REWARD you with a Petroleum Society Denim Shirt. For companies interested in becoming a corporate member, call us and we will fax you a corporate membership application. Upon receiving the completed form (with payment) we will immediately REWARD the corporate representative with a Petroleum Society Denim Shirt.
All members participating in this membership drive will be entered into a draw for a GRAND PRIZE (prize to be announced at a later date) to be awarded at the end of 1999.

1. FAROUQ ALI, S.M., Is There Life After SAGD?; Journal of Canadian Petroleum Technology, Vol. 36, No. 6, June 1997. 2. B U T L E R, R.M., SAGD Comes of AGE!; Journal of Canadian Petroleum Technology, Vol. 37, No. 7, July 1998. 3. DONNELLY, J.K., Who Invented Gravity?; Journal of Canadian Petroleum Technology, Vol. 37, No. 9, September 1998. 4. B A L L, Norman, An All Female Engineering School?; U of A Engineer, University of Alberta, Fall 1998. 5. ALBERTA EUB Atlas of Crude Bitumen Reserves; A l b e r t a Department of Energy, 1996. 6. EDMUNDS, N.R. and GITTINS,S.D., Effective Steam Assisted Gravity Drainage to Long Horizontal Well Pairs; Journal of Canadian Petroleum Technology, Vol. 32, No. 6, June 1993. 7. EDMUNDS, N.R., Investigation of SAGD Steam Trap Control in Two and Three Dimensions, CIM/SPE 50413; I n t e r n a t i o n a l Conference on Horzontal Well Technology, Calgary, Nov. 1 – 4, 1998. 8. I T O, Y., and S U Z U K I, S., Numerical Simulation of the SAGD Process in the Hangingstone Oil Sands Reservoir; CIM Paper No. 96-57, 47th ATM, Calgary, Figs. 6 and 9, June 10 – 12, 1996. 9. M U S K A T, M., Physical Principles of Oil Production; I H R D C , Boston, Fig. 7.8 and Sec. 7.5., 1981/1949 10. KUHN, T.S., The Structure of Scientific Revolutions; The University of Chicago, 1962. 11. KUHN, T.S., The Structure of Scientific Revolutions; The University of Chicago, pp. 149-150, 1962. 12. HENDERSON, R., and CLARK, K., Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms; Administrative Science Quarterly, Vol. 35, No. 1 (1990), p. 9; quoted in Utterback, p. 195. 13. MILLER, K., What Causes Booms and Busts in Heavy Oil?; Journal of Canadian Petroleum Technology, Vol. 37, No. 6, June, 1998.￿

CERI 1/ page 4 3 1/3 x 4 7/8 NEW CAMERA READY ATTACHED

January 1999, Volume 38, No. 1


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