Alberta Oil Sands Facts

The FACTS about ALBERTA OILSANDS

Source: Calgary Herald Photo – Oct.21/05Presentation Prepared By: Tony Yep - July/2006

ACKNOWLEDGEMENT

This presentation has been compiled using the data and information available from:

1. The Calgary Herald Newspaper

- Five Part Series in Oct/05 or Alberta’s Oilsands

- Alberta’s Centennial Series, Issue 4, “Black Gold” (Oct 2/05)

- Other Articles

2. Global Oil Consumption and Production Data from the Internet (www.NationsMaster.com)

3. US News & World Report – Article “The Oil Rush” Apr. 24/06

4. Bantrel Project Data

http://www.nationsmaster.com/

TOTAL 1103

Source: Calgary Herald – Our Alberta, Issue 4, “Black Gold” – Oct.2/05

Source: Calgary Herald Photo – Oct.21/05

Other Relevant Facts

• In 2003, the US Energy Information Administration formally recognized the oilsands as a viable supply source.

• Currently, 175 billion barrels are proven reserves. As technology evolves, this number may increase to over 300 billion.

• The total provincial oilsands deposit is estimated at over 1.7 trillion barrels.

• Only 20% of the oilsands deposits in the Athabasca region are close enough to the surface to be mined. The rest must be recovered by underground methods.

• In the last 40 years, only 4.6 billion barrels have been extracted. The 175 billion barrels of reserves are virtually untapped.

• Alberta has over $80 billion worth of projects in the next decade to bring total daily oilsands production rate to over 3 million bpd.

ALBERTA HAS THE MAJORITY OF THE OILSANDS DEPOSITS

(The Athabasca Oilsands cover an area equal in size to New Brunswick – about 80,000 sq. km.)


OPEN PIT OILSANDS MINING

1. DIGGING IT OUT

Mining shovels dig into the oilsand and load it onto huge trucks. The trucks carry the oilsand to crushers.

2. CONDITIONING AND HYDROTRANSPORTING

The oilsand is broken up in crushers and coarse material is removed. Hot water is added to the oilsands. The resulting slurry is fed via hydro-transport pipeline to the extraction plant.

Source: Calgary Herald Article on Oilsands – Oct.23/05


The mixture of oil, sand and water goes to a primary separation vessel. Thick bitumen froth forms at the top of the vessel; this is skimmed off. Clean sand sinks to the bottom; it’s sent back to the mine by pipeline to fill in mined-out areas. Water from the extraction process,

4. SECONDARY EXTRACTION

The bitumen is cleared by removing fine clay particles and water. Still thick, the bitumen is diluted with naphtha, then stored in holding tanks and delivered to upgrading for processing.

still containing residual sand, clay and traces of bitumen, is known as tailings. The tailings are pumped to holding ponds and treated.


3. PRIMARY EXTRACTION


5. UPGRADING

Upgrading converts bitumen into a lighter, less dense product, using heat to “crack” big molecules into smaller fragments. First, naphtha is removed and recycled. Next, upgrading usually follows this process:

The bitumen is sent to drums where petroleum coke, the heavy bottom material, is removed. Coke, similar to coal, can be used as a fuel source elsewhere, or stockpiled and sold. Hydrocracking may also be used to add hydrogen and break up molecules. Hydrocarbon vapours are stabilized and sent to fractionators where they are separated into marketable products such as naphtha, kerosene and gas oil.



6. SULPHUR REMOVAL

Sulphur can be removed by hydrotreating, stockpiled and sold for fertilizer or other products.

7. STORED AND SHIPPED

The petroleum liquids are kept in separate storage tanks on site until they are ready to be blended and shipped down the pipeline for refining.


IN-GROUND OIL RECOVERY

In the most popular in-situ method, two horizontal wells are drilled in parallel through the oil-bearing formation. Steam is injected into the upper well, heating and softening the bitumen. The lower horizontal well captures the bitumen then pumps it to the surface. The recovered bitumen is sent by pipeline to be upgraded.

STEAM ASSISTED GRAVITY DRAINAGE (SAGD)



Also known as “huff and puff” technology, this process requires just one well bore. Steam is injected for several weeks, mobilizing the cold bitumen. Then the flow on the injection well is reversed, producing oil through the same bore. Steam is re-injected to begin a new cycle when oil production falls below a critical threshold.

CYCLIC STEAM STIMULATION (CSS)



TOE-TO-HEEL AIR INJECTION (THAI)

The process combines a vertical air injection well with a horizontal production well. The wells are pre-heated with steam. When air is injected, spontaneous combustion occurs. Heat loosens the oil, allowing it to flow by gravity to the horizontal production well. The combustion front sweeps the oil from the toe to the heel of the producing well.



VAPOUR EXTRACTION PROCESS (VAPEX)

This experimental method is similar to SAGD. But instead of steam, solvents such as ethane or propane are injected into the oilsands, producing a thinner bitumen and creating a vapour chamber through which the oil flows as it drains. It can be applied in paired horizontal wells, single horizontal wells or a combination.


Canada produced:

• 2005 2.5 million bpd (Oilsands &

Conventional Oil)

• 2015 Expect to be 3.5 million bpd

Oilsands Only

• Last 40 yrs, extracted only 4.6 billion barrels

• 2005 1 million bpd

• 2015 Expect to be 3 million bpd


KEY PLAYERS IN THE ATHABASCA OILSANDS

NO. COMPANY PROJECT SIZE DATE(Barrels/Day) (On Stream)

1 Suncor Energy Voyageur 550,000 By 2012

2 Syncrude Canada Major Expansion 550,000 By 2013

3 Shell Canada Albion Sands Muskeg River 300,000 By 2010

(Athabasca Oil Sands) Jackpine 500,000 Planned

4 Canadian Natural Resources Horizon 232,000 By 2012

5 Imperial Oil Kearl Oil Sands 300,000 By 2018

6 Total SA (Deer Creek Energy) Joslyn Oil Sands 140,000 By 2015

7 Synenco Energy (Sinopec) Northern Lights 114,000 By 2010

8 Conoco Phillips Surmont 100,000 By 2012

9 Husky Energy Sunrise Thermal 200,000 Planned

Tucker 35,000 By 2008

10 EnCana Energy Foster Creek 80,000 Planned

Christina Lake 40,000 Planned

11 Devon Energy Corp Jackfish 35,000 By 2008

12 Japan Canada Oil Sands Ltd. Hangingstone 30,000 Planned

13 OPTI Canada/Nexen Long Lake 180,000 Planned

14 Petro Canada UTS Fort Hills 190,000 Planned

15 MEG Energy Christina Lake Regional 25,000 By 2008

16 Others in Planning

3,601 kbpd

or over 3 million bpd by 2015

Source: Calgary Herald Article on Oil Sands - October 22, 2005 & June 30, 2006

WHAT DOES IT COST TO PRODUCE?

National Energy Board Data Source: Calgary Herald Article on Oilsands – Oct.21/05

Note:

The Operating cost looks at the basic cost of extracting bitumen from oilsands.

The Supply cost include other costs such as capital and operating expenses, taxes and royalties.

SCARY THOUGHTS

World Oil Consumption

80 million bpd 120 million bpd

2005 2025

37.8 yrs 25 yrs

If China and India increase the consumption to 120 mbpd, this will not be sustainable in the long run. More energy reserves/sources will need to be found.

Note: At 20 mbpd consumption, United States at 4.6% of the world population is consuming 25% of the oil production.

OIL CONSUMPTION / PRODUCTION BY COUNTRY2005 DATA (BASED ON 80 MBPD TOTAL)

Source: CIA World Fact Book Jan.10/05 Source: BP Statistical Review of World Energy 2005

www.NationMaster.com website www.NationMaster.com website

Rank Rank

1 United States 25% 1 Saudi Arabia 13.4%

2 China 8% 2 Russia 11.7%

3 Japan 7% 3 United States 9.2%

4 Russia 3.5% 4 Iran 5.2%

5 Germany 3.3% 5 Mexico 4.8%

6 India 3.0% 6 China 4.4%

7 Canada 2.7% 7 Norway 4.0%

8 South Korea 2.7% 8 Canada 3.9%

9 Brazil 2.6% 9 Venezuela 3.8%

10 France 2.5% 10 United Arab Emirates 3.4%

11 Italy 2.3% 11 Nigeria 3.2%

12 Saudi Arabia 2.2% 12 Kuwait 3.1%

13 Mexico 2.2% 13 United Kingdom 2.6%

14 United Kingdom 2.1% 14 Iraq 2.5%

Consumption Production

SCARY THOUGHTS

Given this supply and demand scenario, what do you think?

In Alberta, if the price of oil remains above $40 US/barrel, all existing facilities will expand, and planned new projects will go ahead.

Question

Do you think oil will fall to below $40 US/Barrel?

SOME OTHER INTERESTING ENERGY INFORMATION

• It takes two tonnes of oilsands to make one barrel (159 litres) of oil.

• The Alberta Energy and Utilities Board (EUB) estimates 41 trillion cubic feet of natural gas, or 8 years of reserves at current consumption rates.

• Coalbed methane is now a viable alternative source for natural gas. Technology can access these unconventional gas reserves estimated to be more than 500 trillion cubic feet.

• Alberta has more than 1,000 years of coal supply.

• Synthetic oil can be created from coal using improved Fisher – Tropsch synthesis. Coal → gas → paraffin wax → diesel fuel. This process is deemed to be viable at $45 US/barrel and above.

Source: Calgary Herald – Our Alberta, Issue 4, Oct.2/05 and US News & World Report – “The Oil Rush” Apr. 24/06

SOME OTHER INTERESTING ENERGY INFORMATION

• United States has tremendous oil shale potential in the 16,000 sq.mi. Green River Formation in Colorado, Utah and Wyoming where 800 billion barrels of oil are estimated to be recoverable if the right technologies can be found.

• Biggest environmental issue for all unconventional oil and energy sources is spikes in greenhouse gas emissions.

• 3000 – Estimated number of products made from crude oil including inks, crayons, bubblegum, plastics, dishwashing liquids, deodorants, eyeglasses, tires, ammonia and heart valves.

Source: Calgary Herald – Our Alberta, Issue 4, Oct.2/05 and US News & World Report – “The Oil Rush” Apr. 24/06

DOES ALBERTA SHARE ITS WEALTH WITH THE REST OF CANADA ?

Based on the CERI data, a resounding YES!

Alberta has a little more than one-third share. Is this fair?

What is good for Alberta is good for Canada and the other provinces.

Source: Calgary Herald article– Oct.25/05

THANKS !

ANY QUESTIONS?

P.S. I don’t ever complain about the price of gas!

Alberta Oil Sands Facts

Technology

alberta oilsands source

athabasca oilsands

oilsands deposits

calgary herald article

calgary herald photo

calgary herald newspaper

total1103 source

fuel source