role of heavy oil in the peaking...
TRANSCRIPT
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 1
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Role of Heavy Oil in the Peaking Debate:How Much?How Fast?How Best?
Robert F. HeinemannBerry Petroleum Company
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 2
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Can Supply Keep Up With Demand?
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
100
80
60
40
20
0
New fields
outside M.E.
Global production, MMbopd
IOR
Middle-East fields
Existing fields
outside Middle-
East
2005 Petroleum Consumption: 84 MMbopd
120
Source: EIA 2002
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 3
BERR
Y PE
TRO
LEUM
CO
MPA
NY
The Challenge of Producing 100MM bbl/d
Source: EIA 2002
Production from existing fields
0
20,000
40,000
60,000
80,000
100,000
2004 2008 2012 2016
About 45-50 MM bbl/day needed from new fields outside the ME or from
technology by 2015
Global production, Mbopd
Production from existing sources
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 4
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Three Categories of Heavy Oil
10
10,000
10,000,000
0 5 10 15 20 25
II. Extra Heavy OilSome mobility depending on
reservoir conditions
I. Tar Sands and BitumenImmobile at reservoir conditions
Alb
erta
Orinoco
San Joaquin
Duri
N. SlopeIII. Medium Heavy OilMobile at reservoir conditions
Dow
nhol
eV
isco
sity
(cP
)
API Density at Reservoir Temperature
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 5
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Estimated 5.9 Trillion Barrels in Place
3.3 Trillion of Heavy Oils
2.6 Trillion of Natural Bitumen
Source: USGS – Fact Sheet 70-03, Meyer & Attanasi
II. & III. Heavy -W.Hemisphere,
2,315
II. & III. Heavy -E.Hemisphere,
1,025
I. Bitumen -W.Hemisphere,
1,650
I. Bitumen -E.Hemisphere,
920
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 6
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Where is Heavy Oil Located?
Source: Ivanhoe Energy, http://www.ivanhoe-energy.com/i/pdf/2005-06_IE_Background.pdf; June 2005 and USGS – Fact Sheet 70-03, Meyer & Attanasi
266/<1
35/531
7/43
78/-
5/<113/34
30/43
Recoverable heavy (BBO)/Recoverable Bitumen (BBO)
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 7
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Comparing Heavy and Light Recoverables
690
125210
262
525
225
0
200
400
600
800
1,000
Light Oil Bitumen Heavy Oil
Canada
Saudi Arabia
Venezuela
952
650
435
Rec
over
able
Res
ourc
e, M
Mbb
l
Source: USGS – Fact Sheet 70-03, Meyer & Attanasi, Oil and Gas Journal
690
125210
262
525
225
0
200
400
600
800
1,000
Light Oil Bitumen Heavy Oil
952
650
435
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 8
BERR
Y PE
TRO
LEUM
CO
MPA
NY
The Largest Quantifiable Unconventional Oil Fields –2.5 to 3.6 Trillion Barrels of Oil in Place
Athabasca:Tar Sands & Bitumen
(µ > 10,000 cPo)Oil in place: 1,300 Gb
(EUB Estimates)
ATHABASCA
Orinoco:Extra Heavy Oils(µ < 10,000 cPo)
Oil in place: 1,200 Gb(PdVSA Estimates)
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 9
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Current Heavy Oil Production Is <4% of World’s Total
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1995 1997 1999 2001 2003 2005
Canada
United States
Venezuela
Other
World’s Heavy Oil Production (<20 API)
Pro
duct
ion,
MB
OP
D
Source: Various professional, company, and institutional organizations
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 10
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Technology Drives Heavy Oil Recovery
Ultimate Recovery = OOIP x Areal Sweep x Vertical Sweep x Process Efficiency
Heavy oil extraction would be expected to utilize:
• A significant number of wells to increase sweep efficiency
• Techniques which maximize contact between the reservoir and the wellbore
• Injection of energy to overcome lack of fluid mobility and expansion in-situ
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 11
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Yesterday’s unconventional resource is today’s conventional resource …
Source: Schlumberger Oilfield Review, 2002
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 12
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Cyclic Steam Injection: Efficiency vs Effectiveness
HeatZone
HeatZone
Viscous(Thick)
Oil
Viscous(Thick)
Oil
Viscous(Thick)
Oil
Condensed Steam(Hot Water)
Heated ZoneCondensed Steam
and Thinned Oil
DepletedOil Sand
Injection Soak Production
Injected Steam
Condensed Steam(Hot Water)
Area Heated byConvection From
Hot Water
ProducedFluids
From SteamGenerator
~7000 bbl 3-7 days 6 months
• Most widely used
• Low cost
$5/bbl
• Limited recovery
15-20%• Steam/heat containment
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 13
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Cold Heavy Oil Production with Sand (CHOPS)
Primary production in unconsolidated sandstones using progressive cavity pumps. The benefits are:
• Good heavy oil well productivity (>100 bopd)
• Low capital & low operating costs ($2-6/bbl)
• Widely used in the Canadian heavy oil belt
The limitations of the technology are:
• Relatively low recoveries (5-10%)
• Not applicable to bitumens
• Unsuitable for reservoirs with an active aquifer
• sand disposal issues
Sour
ce: T
otal
, CU
PCIC
, Fra
ncoi
s, H
eavy
Oil
Res
earc
h Le
ader
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 14
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Venezuela Production Methods
The major projects are all based cold production using complex multi- laterals.
• Low costs well with high productivity (2000 bopd) and gradual decline.
• Excellent reservoirs can be high-graded
• Little application to deeper, thin beds that comprise 50% of the resource
Source: Schlumberger Oilfield Review, 2002
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 15
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Steam flooding
In steam flooding, the injected steamrises and spreads to producing wells. As breakthrough occurs, oil productionincreases via gravity drainage
Ideal situation
While recovery can be high (>50%), the method requires:
• Tight spacing for good sweep
• Reservoir surveillance to control steam costs
• Reservoir characterization to optimize performance More Realistic
Source: Schlumberger Oilfield Review, 2002
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 16
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Steam Assisted Gravity Drainage (SAGD)
SAGD utilizes horizontal wells at the bottom of thick unconsolidated sandstones. Injected steam mobilizes the heavy oil that flows downward by gravity. The method:
• works well in heterogeneous reservoirs
• yields high local recoveries (60%)
• efficiently transfers the heat associated with the steam injection
• requires significant gas volumes Source: Total, CUPCIC, Francois, Heavy Oil Research Leader
• operationally more complex than cold techniques
• may eventually be combined with CHOPS
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 17
BERR
Y PE
TRO
LEUM
CO
MPA
NY
California: Customizing Technology to the Reservoir
• California heavy reservoirs were bysettlers in the late 1800’s from seeps.
• Kern River, Belridge and Midway Sunset fields are giant heavy oil fields
• Production is from the Tulare and Monarch sands (Miocene and Pleistocene) such as those shown in the outcrop
• Reservoirs are characterized by high permeability, steeply dipping beds with siltstone barriers
Source: Schlumberger Oilfield Review, 2002
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 18
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Berry’s Integrated Approach at Midway Sunset
• Reserves: 69.3 MMBOE, 12,300 BOPD
• Horizontal wells placed every 100 feet to maximize areal sweep
• Legacy vertical wells used for steam injection
• 15% of wells provide 60% of the production
Horizontal Wells:
– Red: Pre-2004
– Green: 2004 to present
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 19
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Medium Radius Horizontal
Development Well
Vertical Producers
Down Dip Well
Gravity Drainage Gives Superb Sweep and Recovery
Recovery can be expected
to be60-75%.
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 20
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Comparison of Resource Opportunities
Canada Venezuela Midway Sunset
Diatomite
Density 12-18oAPI <10oAPI 13oAPI 15oAPI
Depth 1500-2200 ft 1500-2000 ft 1300 ft 1400 ft
Porosity 25-30% 30-35% 30% 65%
Permeability 1-4 D 2-15 D 1-5 D 500 µD
Thickness 15-100 ft 20-80 ft 50-500 ft 200-400 ft
Temperature 70-100o F 120-150o F 90o F 75o F
Viscosity 500-10000 cP 1000-5000 cP 10000 cP 10000 cP
kh/µmDft/cP
14-140 40-1000 50-250 0.01- 0.10
Source: “Comparing Venezuelan and Canadian Heavy Oil and Tar Sands,” Dussealt, Canadian Int’l Petroleum Conf., 2001; Berry Petroleum Company proprietary data
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 21
BERR
Y PE
TRO
LEUM
CO
MPA
NY
…. today’s unconventional resource is tomorrow’s conventional resource.
Full Field Development:3-hundred 1.5 acre seven spot patterns
Electron microscopic picture of a diatom
“Over 200 MMBO OIP On Berry Owned Property”
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 22
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Requirements for Sustained Resource Development
• Crude demand increased prices to levels needed to sustain development of unconventional heavy oil
• As heavy production has increased, the differential between light sweet crude and heavy has increased.
• Additional heavy oil refining capacity is needed as the production slate becomes heavier and will bring differentials back to historical levels.
• Adequate natural gas supply is necessary for EOR, transportation, and refining
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
$60.00
$65.00
$70.00
Jan-96Jan-97
Jan-98Jan-99
Jan-00Jan-01
Jan-02Jan-03
Jan-04Jan-05
Clo
sing
Pric
e, $
/bbl
WTI NYMEX MWSS Posting Differential
$14.83
$10.75
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 23
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Heavy Oil Is Only a Partial Solution
Heavy oil production could double in the next 10 years to 6-7 MMBOPD…….
0
1000
2000
3000
4000
5000
6000
7000
1995 2000 2005 2010 2015
Heavy Production, MBOPD
Canada
U.S.
Venezuela
0
20,000
40,000
60,000
80,000
100,000
2005 2010 2015
Global Production, MBOPD
…..and will fill 10-15% of the gap as world demand moves to 100 MMBOPD.
Production from existing fields
Heavy oil
Production from new sources
Source: Various professional, company, and institutional organizations
Berry Petroleum Company, National Academies Workshop, October 20 – 21, 2005 24
BERR
Y PE
TRO
LEUM
CO
MPA
NY
Role of Heavy Oil: Why Not More, Faster, Cheaper?
Enormous accumulations of heavy oil are well known with little
geologic risk. However,
• Light oil production is more profitable
• Current heavy oil technology is limited to the “best” reservoirs
• Today, the industry is resource constrained – capital, people,
equipment and “know-how”
• Political situation in Venezuela is uncertain
• Longer-term, price volatility discourages sustained investment