Page 1
1
Primary funding is provided by
The SPE Foundation through member donations and a contribution from Offshore Europe
The Society is grateful to those companies that allow their professionals to serve as lecturers
Additional support provided by AIME
Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl
Page 2
2
Unlocking Ten Trillion Barrels of Global Oil Shale Resources - The State of the Industry
Khosrow BiglarbigiINTEK, Incorporated
Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl 2
Page 3
3
Demand For Liquid Hydrocarbon Worldwide
24% Increase
20
40
60
80
100
120
2008 2011 2016 2021 2026Year
Mil
lio
n B
arre
ls P
er D
ay
2030
25% Increase
Source: EIA, 2009
Page 4
4
Global Liquid Hydrocarbon Supply
Source: IEA, 2008
Mil
lio
n B
arre
ls p
er D
ay
1990 2000 2010 2020 20300
20
40
60
80
100
120
Oil – Existing Fields
NGL
Future Discoveries
Oil Sands
CTL GTL
? EOR
Oil Shale
Heavy Oil
Bio Fuels
Year
Page 5
5
What is Oil Shale?
RockKerogen
Pyrolysis
Upgrade
700 - 800 o
F
Syn- Crude Naphtha
Jet Fuel
Diesel
Gasoline
Hydrogen
Page 6
6
10 Trillion Barrels of Shale Oil Worldwide
United States
Zaire
Russia
Brazil
Italy
Morocco
Estonia
China
Canada
France
Egypt
Australia
IsraelJordan
Countries With Oil Shale Deposits
Page 7
7
Australia 32 Billion
MENA 153 Billion
Europe 120 Billion
Africa 100 Billion
Americas 6,100 Billion
Known Resources (Barrels)
Eurasia 270 Billion
Asia 27 Billion
Source: USGS, 2005* Jordan NRA, 2009
Page 8
8
America’s Oil ShaleMost Concentrated Hydrocarbon Deposit
2 Trillion Barrels
6 Trillion Barrels
Source: US DOE, 2004
Page 9
9
Substantial Areal Density
Source: Oil and Gas Journal, August 2004
1000
Bar
rels
Per
Acr
e Oil Shale
70 100
500
800
1,300
0
250
500
750
1,000
1,250
1,500
Alaska N.Slope Oil
Canada Oil Sands
WyomingUSA
UtahUSA
ColoradoUSA
Page 10
10
The Mahogany Zone
• The Most Prolific
• Up to 1000 Ft Thick
• Up to 75 Gal/Ton
Source: Redleaf Resources, 2008
Page 11
11
Europe’s Known Oil Shale Resources
120 Billion Barrels
Italy 73.0
Estonia 16.0
France 7.0
Belarus 7.0
Sweden 6.0
UK 3.5
Germany 2.0
Luxembourg 0.7
Others 4.5
Page 12
12
Oil Shale Production ProcessesOil Shale Production Processes
Mining Retort UpgradingResource Refinery
Surface ProcessSurface Process
Drilling Heating UpgradingResource Refinery
In-Situ ProcessIn-Situ Process
Source: US DOE, 2004
Choke Point
Page 13
13
Shell In-Situ Conversion Process
Source: US DOE, 2008
High Value Products
Pilot Test (Colorado, USA)Pilot Test (Colorado, USA)
Light Surface Processing
HEATER
PRODUCER
OVERBURDEN
Page 14
14
Other Examples of In-Situ Technology
Pilot Tests (Colorado, USA)Pilot Tests (Colorado, USA)
Chevron Process
FracturesFractures
Injector
Producer
Source: US DOE, 2008
AMSO Process
Page 15
15
Ecoshale In-Capsule Technology
Source: Redleaf Resources, 2008
HOT GAS
COOL GAS
Pilot Test (Utah, USA)Pilot Test (Utah, USA)
Page 16
16
Alberta Taciuk Processor (ATP)
Pilot Test (Utah, USA)Pilot Test (Utah, USA)
PreheattubesVapour
tube
Combustionzone Retort
Preheattubes
Coolingzone
Oil shalefeed
750°C
500°C 250°C
Source: US DOE, 2006
Page 17
17
Gas Combustion Retort (GCR)
• Brazil (4,000 Bbl/d)
• China (4,000 Bbl/d)
• Estonia (6,000 Bbl/d)
• Australia (Project Scale Up)
Oil MistExtractors
Raw Shale
Spent Shale
RESIDUE COOLING
COMBUSTION
STRIPPING
PYROLYSIS
PREHEATINGMIST FORMATION
Oil MistExtractors
Raw Shale
Spent Shale
RESIDUE COOLING
COMBUSTION
STRIPPING
PYROLYSIS
PREHEATINGMIST FORMATION
RESIDUE COOLING
COMBUSTION
STRIPPING
PYROLYSIS
PREHEATINGMIST FORMATION
Source: US DOE, 2007
Page 18
18
Energy Return on Investment (EROI)
0
2
4
6
8
10
12
Oil Shale(Surface)
Oil Sands(Surface)
Oil Shale (In-Situ,
Non.Elec.)
Oil Sands(In-Situ)
Oil Shale(In-Situ)
Source: US DOE, 2007
EROI =Energyout - Energyin
Energyin
ER
OI
Oil Shale
Oil Sands
3
7
10
7
5
Page 19
19
“Oil shale is a local asset under global constraints.”
Klaus Brendow, Senior Advisor
World Energy Council
June 9, 2009
Page 20
20
Oil Shale Project Costs
Item Unit Range
Capital Cost $/BPD
O&M Cost $/Bbl 15-25
45K-65K*
* Barrel of Daily Capacity
Source: INTEK, Inc., 2009
Page 21
21
Canadian Oil Sands Operating Costs
Source: Suncor, 2008
$0
$5
$10
$15
$20
$25
$30
$35
$40
2006 2007 2008
$35
$30
$23
Do
llar/
Bar
rel
Year
Page 22
22
Source: Canadian Association of Petroleum Producers, April 2008
$1,0
00 p
er B
bl
of
Dai
ly C
apac
ity
140000
0
20
40
60
80
100
120
Suncor -Millennium
Albian Syncrude -Aurora 2 &
UE 1
Nexen – OPTI
CNRL -Horizon
Shell -Muskeg &Scotford
PCA/UTS Fort Hills
$3 Billion $11 Billion
100,000 Bbl/D Project
2001 2003 2006 2007 2008 2010 2011
Canadian Oil Sands Capital Costs
Page 23
23
Shell CEO Says Higher Costs LimitCanadian Oil Sands Projects
Oct 8, 2009
Page 24
24
Total Canada Chief Says Oilsands Need Pricier Oil
Oct 4, 2009
Page 25
25
Economic Price for Oil Shale Technology
True In-Situ
Surface Mining
Underground Mining
2007
Do
llar
s P
er B
bl
In-Capsule
$50
$60
$75Rate of Return – 15%
$0
$10
$20
$30
$40
$50
$60
$70
$35
Source: INTEK, Inc., 2008
$80
Page 26
26
Oil Shale Environmental ImpactsAir Quality
Oil Shale Processing
HCGas CO2 SOx NOx
• CO2 Enhanced Oil Recovery• Sequestration• Other Industrial Uses
Capture and Clean Existing Technology
Process Plant Use
Source: SPE #110590, 2007
Page 27
27
Land Use Depends On The Process
• 1 MMBbl/D Production for 40 Years– Surface: 30 Square Miles
– In-Situ: 15 Square Miles
• Example for 2.5 MMBbl/D Industry: – 52 Square Miles
2.5 MMBbl/d
52 Square Miles
Green River (USA)
17,000 Square
Miles
Source: SPE #110590, 2007
Page 28
28
Water Requirements
• 1-3 Barrels of Water per Barrel of Shale Oil
• Challenges:–Water rights–Water availability –Water runoff–Ground water protection
Source: US DOE, 2007
Page 29
29
Total Resource6 Trillion Barrels
High Quality Resource2 Trillion Barrels
Technical Recovery
1 Trillion Barrels
Reserves600 – 750Billion Bbls
The Prize (USA Example)
$50 - $65 / Bbl
@
Source: INTEK, Inc., 2008
Page 30
30
Reserves Potential Worldwide
200
400
600
800
1,000
1,200
1,400
$50 - $65 $75 - $90 $90 - $130
U.S. Worldwide
Oil Price ($/Bbl)
Bil
lio
n B
arre
ls
0
Page 31
31
Summary
• Over 10 trillion barrels of in place resource
• Conversion technologies are advancing rapidly
• Estimated reserves of up to 1.3 trillion barrels worldwide
• Oil Price is a key driver for its development
• Requires concerted effort by the private sector,
governments, and local communities
Page 32
32
Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl
Your Feedback is ImportantEnter your section in the DL Evaluation Contest by
completing the evaluation form for this presentation or go online at:
http://www.spe.org/events/dl/dl_evaluation_contest.php
Page 34
34
Activities in Estonia
15 Million Tons of Oil Shale
Kerogen Oil Production
~ 1.8 Million Bbls
Power Generation
~11 Billion (KWh)
Balti Power Plant
Eesti Power Plant
Eesti
Balti
Mining Area 425 Km2
Narva Oil Plant
VKG Oil PlantVKG
Narva
Page 35
35
Breakdown of Economic Price for Generic Surface Project
$60/Bbl
Operating Costs38%
Risk Premium9%
Taxes 19%
Cost of Capital19%
Transfer Payments14%
Source: INTEK, Inc., 2008
Page 36
36
Cashflow of a Generic Oil Shale Project
-1000
-800
-600
-400
-200
0
200
400
600
800
1000
1200
5 10 15 20 25 30 35 40
After Tax
Before Tax
Year
Cu
m.
Dis
cou
nte
d C
ash
flo
w (
MM
$)
Room for Government Action
Source: INTEK, Inc., 2008
Page 37
37
Oil Shale Costs are ImpactedA Few Examples
0
100
200
300
400
2004 2005 2006 2007
Year
Av
era
ge
Dri
llin
g C
os
t ($
/Fo
ot)
Rocky Mountain Region
Drilling Costs
-
20
40
60
80
100
2003 2004 2005 2006 2007 2008
1,00
0 D
olla
rs p
er B
arre
l of
Dai
ly C
apac
ity
Mining Costs
-
20
40
60
80
100
2003 2004 2005 2006 2007 2008
1,00
0 D
olla
rs p
er B
arr
el o
f D
aily
Cap
acit
y
Upgrading Costs
$-
$500
$1,000
$1,500
$2,000
$2,500
2003 2004 2005 2006 2007 2008 2009
Year
Pri
ce p
er T
on
Tubular Steel Price
0
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008
Op
erat
ing
Co
sts
($/B
bl P
rod
uce
d)
SuncorSyncrudeCOS Trust
Operating Costs
Page 38
38
Worldwide Oil Shale Activities
USAUSA
BrazilBrazil
MoroccoMoroccoChinaChina
AustraliaAustralia
RD&D8 Pilot Tests
29 Companies
Production6,000 Bbl/D2,430 Mw
Production4,000 Bbl/D
Production4,000 Bbl/DExploration
12 Companies
JordanJordanCommercial
Scale-Up
Source: INTEK, Inc., 2008
EstoniaEstonia
Page 39
39Sources: World Oil Shale: Dyni 2003Map: maps.google.com
Middle East
38 Billion bblsSouthAmerica
82 Billion bbls
Africa159 Billion
bbls
Australia32 Billion bbls
Europe116 Billion bbls
Eurasia271 Billion bbls
North America
6,015 Billion bblsAsia
27 Billion bbls
10 Trillion Barrels of Shale Oil Worldwide
Page 40
40
0
500
1,000
1,500
2,000
2,500
2005 2010 2015 2020 2025 2030 2035
Year
Th
ou
san
d B
bl/
DProjected Production Potential
(Shale Oil in the U.S.)
Base
Tax Incentives
RD&DAccelerated Scenario
Measured Scenario
Business as Usual
Source: US DOE, 2007
Page 41
41
Development Hurdles
• Access to Land
– 70% on Federal Land
– No Commercial Leasing Program
• RD & D
• Environmental Permitting
• Fiscal Regime