Heavy Oil Challenges & Opportunities

North Slope Alaska

Gordon Pospisil - BP Exploration (Alaska) Inc.
January 6, 2011

Outline Heavy Oil - An Alaskan Sized Prize

Where and What is Heavy Oil?

Current Alaska Development Challenges

Schrader Bluff / West Sak Formation

Future Development Potential

Schrader Bluff / West Sak Formation

Ugnu Formation

Global Heavy Oil

Alaska is on the Map but

Alaska

Canada

Historical Focus on Light Oil

Arctic challenges
High costs

40 years of heavy oil development

Cradle of Heavy Oil Technologies
Open Data Environment

Barrels OOIP
~1 billion
~10 billion

Alaska

~100 billion
UK

Russia

>1 trillion

Canada
Netherlands
Italy
USA
Lower
48

E. Europe
Turkey
Jordan
Kuwait

Mexico

Saudi
Arabia

Trinidad
Venezuela
Ecuador
Colombia
Peru

Egypt

Egypt

Brazil

Nigeria

China
India

Oman

Angola

Indonesia
Madagascar
Australia

Argentina

Source: JPT, IEA ,Schlumberger OFS Marketing

HO Workshop, SEG 2006

What is Heavy Oil?

Light End Molecules

North Slope Heavy oil is a residual

formed from light oil that has lost the
small (light) molecules leaving the
heavy ones. These form
hydrocarbon compounds
characterized by long, complex
molecules.
Most of the hydrogen is in the light
ends so heavy oil is depleted in
hydrogen.
The long molecules of heavy oil
impart high internal friction resulting
in high viscosity.
A heavy oil model in a Calgary museum

Viscosity resistance to flow

Crude Oils

Viscosity
(centipoise)

108

Tar,
Bitumen
Extra
Heavy Oil
Heavy Oil
Viscous Oil
Light Oil

Familiar
substances
Window putty
Caulk

107
Vegetable shortening

106
105

Peanut butter
Tomato ketchup

104

Molasses

103

Honey

102

Maple syrup

10

Corn oil

Water

Temperature/Viscosity Relationship
for several oil samples

Viscosity reduction

Heat

Solvent

Dilution (Diluent)

Low
Temperature

High

Low

Viscosity is the resistance a material

has to change in form.internal
friction.

Viscosity

High

Heavy Oil Key Properties & Considerations

High Viscosity (Physical Property)
Flows very slowly: wells produce at lower rates than light oil
wells
Developments require lots of wells
Waterflooding is less effective due to the viscosity contrast
between heavy oil and water
Often produced with lots of sand
Thermal techniques (e.g. steam) may be required for recovery
but energy balance and environmental foot print are factors
Lower Hydrogen Content (Chemical Property)
Heavy oil is depleted in hydrogen relative to light oil
Fewer refined products are derived from heavy oil
Heavy oil fetches a lower price on the market

Alaska Viscous & Heavy Oil Resource

Heavy oil resource overlies existing fields

Oil is present in multiple reservoir zones

Total: 24 33 Bbbls Oil in Place

Schrader Bluff / West Sak ~12 Bbbls (14-22 API)
Ugnu 12-18 Bbbls (8-14 API)

Beaufort Sea
Milne
Point

Kuparuk
River

0 1 2

8
Miles

Heavy
Oil

Prudhoe
Bay

Alaska Fluid Viscosity

Alaska fluids range over a continuum of viscosities

North Slope Oil Fields

Oil viscosity versus Depth
0

Mostly
Developed

Starting
to Develop

Potential
Future development

2,000
ce
uen
q
e
nt s
me
p
o
l
e
Dev

Depth (ft)

4,000

Ugnu

West Sak / Orion

6,000

Kuparuk

8,000
Prudhoe

10,000

Light Oil

Viscous Oil

(like water)

Heavy Oil

(like syrup)

(like honey)

12,000
0

10

100

1,000

Oil Viscosity (cp)

Technical Challenge

10,000

100,000

1,000,000

Expect the piloting to take longer and be more

complex (painful) than you expect
100000

100+ Million bbls cumulative production

80000

MPU
S-Pad

Challenges:

60000

Low productivity due to high viscosity

PBU
Orion
PBU
KRU
Polaris
Tabasco MPU
Tract 14
KRU

Complex production and injection well designs

Waterflood problems in soft rock formations
Difficult separation of heavy oil & water

40000

Solids production and Handling

Higher operating costs

West Sak
20000

KRU
West Sak
Pilots

MPU
Conoco
Development

MPU
BP Pilots

19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08

Rate (bopd)

Geologically complicated

PILOT

vertical wells & water-flood

PILOT
DEVELOPMENT & PILOTS

fractured
vertical wells

>$500M spent during pilot phase

DEVELOPMENT
DEVELOPMENT
DEVELOPMENT

horizontals multi-laterals

KRU
MPU
PBU

Evolution of Heavy Oil Producer Well Design

Original Design

Current Design

Conventional

Multilateral

TVDSS

600
frac

Completion Length: ~90 of

perforations, 600 frac
Production Rates: Marginal
Operability: Fair to Poor

3000 to 7000
laterals

Cost: 2-4x conventional well

Completion Length: Up to 25,000 ft of laterals
Production Rates: Significantly improved
Operability: Improved, but still solids,
interventions and separation problems

Drilling from Manhattan to the Statue of Liberty

World class drilling technology has
been developed for viscous oil

1.5 mile
laterals
300+ ft of
section

Heavy Oil Leads to Challenging Well Designs

TD - 12,054 MD
Length - 6057

OA

TD - 12,100 MD
Length - 5980

OBa
OBb

TD - 12,043 MD
Length - 4442

S-213AL1-01
TD - 12,160 MD
Length - 5751

OBc
S-213A

OBd

OBe

Total Footage Drilled: 31,564' MD

Total High-Angle Footage: 27,540' MD
Total Slotted Liner Run: ' MD
Total Net Pay: 16,755' MD

TD - 12,190 MD
Length - 5310

Heavy Oil production requires facility upgrades

Schrader/West Sak
Production Heater

Fill has consistency

of Turnagain mud
Tank
Modifications

Slug Catcher
Inlet

Solids Disposal
Density Profilers
Equipment installed to remove
and dispose of solids

Sand Jets

Heavy Oil Production Technology:

A Circle of Learning for the Schrader Bluff / West Sak zones
Technology & Learnings
Heavy Oil development
requires a collaborative
circle of learning

Facilities & Operations

Milne
Point

Kuparuk

Drilling & Completion

Nort

Prudhoe
Bay
PS

Reservoir Development
Strategy

TVDSS

Miscible gas

Ugnu Heavy Oil Challenges

Geology is king and the reservoir dictates the recovery method.

Understand the resource properties and distribution
Understand the recovery methods and cutoffs

Challenges:
100 times thicker than
Schrader/West Sak oil
Shallower, colder
NO production to date
New technologies needed:
geoscience, wells, facilities,
and transportation.
Pilot testing needed to prove
commerciality

Heavy Oil Recovery Spectrum

Less than 10% Recovery

Low teens
Displacement

Water Flood
Polymer Flood

Solvents

30 to 50%

99%

GR

Tvdss
Ft.

3,500

Ugnu M80 Cold Flow Composite Cold Flow Risk Map

Ugnu

3,600

3,700

3,800

Viscosity > 10,000 cp

0 0.4 0.8

1.6

2.4

3.2
Miles

Risk is driven by oil quality in the west

and oil presence in the east

Low risk
Moderate risk
High risk
Denotes pilot location

Res.

Analogs to Historical Recovery - Screening

Viscosity vs. RF
1000000

SAGD
100000

Viscosity

10000

CHOPS

1000

THERMAL

CSS

Ugnu

Waterflood
Polymerflood

Steamflood

Steamflood

Primary
(Conv.)
COLD
Polymerflood

100

Primary

SAGD
CSS
chops

Waterflood

Dusseault chops

10

1
0

10

20

30

40

50

60

70

RF (%)

Sources: C&C Reservoirs, Dusseault et al., & Sproule

Ugnu viscosities are well above the current waterflood viscosity threshold
Viscosity is within the limits of primary, chops, polymer flood, and a number of steam
recovery methods

Cold Flow Recovery Methods

CHOPS (Cold Heavy Oil Production with Sand)

Horizontal Wells

Deliberate initiation of sand influx into perforated well

Increase reservoir contact through drilling

Sustained sand production propagates further into the

reservoir (representing a multi-fold increase in reservoir
contact)

Relies heavily on solution gas drive

Sand produced along with oil, gas, and water

Slotted liner limits sand production into wellbore

There vs. Here

Canadian Design

Single well tank battery

Oil, water and solids trucked separately

Gas burned or vented

Direct fired heater

20+ years experience

Alaska Design
Safety & environmental constraints
No direct fired heaters in tanks
No venting of gas
No spills
Operate safely period
Unknown fluid properties and behavior
First of its kind in Alaska

Milne Point S-Pad Heavy Oil Facility

Milne Point S-Pad Heavy Oil Pilot

SURFACE KIT

KEY QUESTIONS
Are the CHOPS and Horizontal depletion mechanisms
viable and reliable with Alaska reservoirs and fluids ?

What is the well design and lift system that allows for
sustainable and operable movement of a
sand/oil/water/gas slurry?
What is the reliability and efficiency of high viscosity and
high solids processing and transportation?

*
Primary Targets

CHOPS

Horizontals

*
*
*

TUZC

GR

M80U

Structural Compartments &

Associated Fluid Properties

M80L

Recovery
Methods & Associated Well
Types

Reservoirs
& Associated Fluid Properties

M70

SUBSURFACE VARIABLES

MPS-37
Res & So

Heavy Oil Potential Big Dreams

Southern Option

S-Pad Pilot

Present

Future

Time Frame

High

Extremely High

Risk & Uncertainty

Plan

Options

Vision

300
250

MBPD

200
150

Thermal

Southern
Option

100

EOR

50

Primary

S-Pad Pilot
0
2009

2014

2019

2024

2029

2034

2039

2044

2049

2054

2059

2064

Heavy Oil Value Chain

Time dependency given viability/longevity of existing infrastructure is driver of pace

Key Messages
Heavy oil is a large Alaskan resource
Shares footprint with North Slope Light Oil Field Developments
Comparable to Light Oil in total oil in place
Heavy Oil Reservoirs are challenging to produce on the North Slope!!!
Schrader / West Sak production required new technologies over the past 25
years; shows promisebut remains on the margin
geoscience,
reservoir,
wells, and facilities

Ugnu shows potential, but requires successful Pilots of next generation

technologies