Sept/Oct 2010

Cenovus to investigate large bitumen deposit in northeast Alberta

Company plans to test drill Grand Rapids oil sands

By Peter Caulfield

Cenovus

A Cenovus drilling pad like this one at Foster Creek will soon become a feature at the Grand Rapids deposit west of Fort McMurray | Photo courtesy of Cenovus


Calgary-based Cenovus Energy Inc. recently received approval from the Alberta Energy Resources Conservation Board (ERCB) to build a test well into a large and mostly untapped bitumen deposit in northeastern Alberta. In late 2010, Cenovus plans to drill the well into the Grand Rapids oil sands, which lie southwest of the Fort McMurray oil sands and 300 kilometres north of Edmonton. The pilot, which falls under the company’s existing Pelican Lake operating license, is 100 per cent owned by Cenovus and will determine whether the Grand Rapids formation can be commercially produced using the steam-assisted gravity drainage (SAGD) technique.

If the test is successful, Grand Rapids has the potential to become a very important deposit for Cenovus. It has the geological advantage of being a consistent and continuous reservoir and contains nearly 900 million barrels of bitumen. The company is preparing to file a regulatory application next year for 180,000 barrels per day (bpd) of commercial production from Grand Rapids. The first phase of the project is expected to produce 60,000 bpd. The pilot is slated to be up and running in 2011 and take from six to 24 months to complete.

One of the measures of the efficiency of SAGD technology is the steam-to-oil ratio, which calculates the amount of steam needed to produce a barrel of oil. Cenovus’ SAGD projects have achieved a steam-to-oil ratio of approximately 2.5, which means the company uses approximately 2.5 barrels of water to produce one barrel of oil, which, the company says, is one of the lowest in the industry.

The company’s first SAGD project, at Foster Creek, Alberta, began full commercial operation in the fall of 2001. Cenovus has a second SAGD operation in Christina Lake, Alberta.

“Cenovus believes there may be the opportunity to use SAGD to produce the resource,” said Cenovus spokesman Reg Curren. “The company plans to apply the knowledge we gained at the Foster Creek and Christina Lake SAGD projects that have shown a high-efficiency recovery process.”

Curren said the oil in the Grand Rapids bitumen is not accessible through water flood or polymer injection, which is the technology being used at the company’s Pelican Lake project. “It’s too thick to flow using that technique,” he explained. “The API [American Petroleum Institute] gravity of Grand Rapids is between seven and 8.5 degrees, which is heavier than the oil produced from the Wabiskaw Formation [Pelican Lake].” (Note: API gravity is a measure of how heavy or light a petroleum liquid is compared to water).

Cenovus hopes it can begin producing Grand Rapids oil by 2017, and says it should be able to make a nine per cent return in the area with oil prices at US$60 to US$70 per barrel.

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