Huge Venezuelan Oil Reserves Suffer Political Peak Oil

BitToothEnergy

Jorge Pinon, an energy expert at Florida International University in Miami, said that Venezuela's state oil company has suffered from a lack of adequate technology and investment, hurting oil output in recent years.

"You can be sitting on the world's largest oil reserves but if you do not have ... capital, technology, know-how, and most important, stewardship of the enterprise," Pinon said, "they are worthless." _AP

Venezuela is sitting on over one trillion barrels of oil equivalent in heavy oils, in the Orinoco Belt. These oils can be difficult to extract, transport, and refine, but significant profits still remain to be made -- if the dull-witted dictator of Venezuela does not kill his golden-egg-laying goose.

Venezuela in the same situation as Canada, as conventional production of oil diminishes, so the rise in oil prices is making it more practical to produce the heavier oils of the Orinoco Basin, although almost all the oil from Venezuela is both heavy and sour. _BitTooth

BitToothEnergy

The largest supply of oil remaining in Venezuela is that in the Orinoco Belt, which the USGS has estimated holds a reserve of some 513 billion barrels. (Which, for reference is about twice the size of the Saudi Arabian reported reserve.) _BitTooth

BTE

These resources were known to be enormous: close to 1,200 billion barrels of oil originally in situ (between 80 and 210 billion barrels of recoverable resources, depending on the recovery factor one chooses to believe). However, they were of very poor quality, at less than 10o API (indicating low gravity/high viscosity) and a high content of sulfur and heavy metals. _PetroleumWorld

No one knows how large the Orinoco Belt resource may turn out to be. As the technology for recovering and refining heavy oils improves, the reserves are likely to grow ever larger.

Unfortunately for Venezuela, Hugo Chavez' interminable reign of error is likely to continue to alienate most foreign partners. Indigenous Venezuelan expertise under Chavez is particularly inept, so foreign assistance is virtually mandatory if the nation is ever to get a handle on the great wealth it is sitting on.

Unless Chavez is ejected, it is likely that energy technologies globally will progress to the point that most of Orinoco will never be developed.

Canadian Oil Sands Going In Situ

For oil sands that are too deep for surface mining operations, some form of "in-situ" is needed to extract the oil. Most in-situ operations involve the injection of steam into the oil sands deep underground.

The steam warms the bitumen, making it more mobile, so that it can then be extracted through drilling.

Some sources say 20 per cent of this area will be mined versus 80 per cent being developed in situ. (The Alberta government disagrees, telling The Tyee the number is more like 2.5 per cent mining and 97.5 per cent in situ.) _TheTyee

... the number of in situ or thermal projects continued to multiply as foreign investors lined up to inject dollars. _CalgaryHerald

Cenovus Foster Creek
There are several approaches to mining oil sands. Not all oil sands projects are equally economical to construct. Some of the most economical approaches involve in situ extraction of bitumen from the sands.

Ten years ago, big mining projects were the only game in town - now there are choices not only between mining and in situ but sophisticated money is also seeking out the projects with the best reservoir quality.

What they are finding is that in situ technologies, through which 80 per cent of the oilsands will be accessed, are gaining an economic advantage.

Capital intensity, for example, at Imperial Oil's under-construction Kearl mine project is about $70,000 per flowing barrel - it'll cost about $8 billion for a project expected to produce 110,000 barrels of bitumen per day.

Suncor has said its oilsands mines will cost around $60,000 per barrel to build while its multiple Firebag thermal in situ projects will come in for between $30,000 and $35,000 per barrel.

"People like Cenovus are saying that, in some cases, they can add in situ capacity at about $20,000 per daily barrel," Dunbar said. _Calgary Herald

As technologies improve and become cleaner and more economical, expect Canadian oil sands production to grow exponentially. A giant new pipeline going all the way to the Gulf of Mexico should speed up the process, once completed and running.

Just as North American shale gas technology has revolutionised the energy industry, so will Canadian oil sands technology.

Other unconventional forms of hydrocarbons will also likely step in to provide liquid and gaseous fuels, as needed. There are trillions of barrels of oil equivalent in known unconventional reserves around the world, with variable accessibility. Many trillions more barrels are undoubtedly sitting around, unsuspected, waiting for better technologies of exploration and production.

Oil Sands Get Ready to Rock and Roll

Every year, the Canadian Heavy Oil Association and the Society for Petroleum Engineers hold a one-day symposium on the technical advancements and research being conducted in the oilsands.

It's structured as an off -the-record symposium, which means no papers are published or handed out; the purpose is to bring forward the research being conducted in oilsands to encourage discussion and information sharing.

Word has it that it's the best place to get a handle on what's going on in oilsands research and development.

On Monday morning, the room was packed with engineers -- sporting the occasional pocket protector -- and one could easily imagine any one of the four physicists from the Big Bang Theory sitcom among the participants.

And, as the lucky outside observer, it's clear to me within a few presentations that the criticism generously levelled at the oilpatch for its lack of research and development is misplaced. _CalgaryHerald

Oil prices in the $80 range are spurring oil exploration and production technologies. Canadian oil sands represent a huge resource of more than 1 trillion barrels of oil equivalent. At these prices for oil -- even if demand stays flat -- the technology of producing oil sands is only going to get better.

Today, the focus continues to be on increasing efficiency and decreasing costs, but along with that is a new angle -- minimizing the environmental footprint at the same time.

To borrow from Maslow's hierarchy of needs, it's an industry that has figured out the extraction puzzle -- the basic needs -- and can therefore move up the triangle to addressing the environmental challenges.

The fact that the research and development is not taking place behind lab benches and using endless Petri dishes doesn't mean the work isn't being done; it just happens in a different form -- on-site and in real time.

All this is important in the context of the role Alberta's oilsands will play in the global energy equation.

The reaction to oil prices being over $80 US per barrel has been wide-ranging...

...there is more than enough pipeline capacity into the U.S. destined for refineries capable of processing the bitumen, which means that difference in pricing between light and heavy oil are expected to continue to be very narrow.

Therefore, the work being done in the oilsands to improve efficiency and decrease the environmental footprint is even more important than ever. _CalgaryHerald_via_EnergyTribune

Current high prices for oil are largely the result of monetary policy at the world's central banks, and a current lack of safe harbour investments for large investors due to the ongoing recession. High oil prices continue to exert a moderating influence on oil demand in the US. Severe demand destruction could easily set in should speculation get out of control as happened in the summer of 2008, when multiple financial bubbles burst almost simultaneously.

The best course for governments is to structure their tax and regulatory infrastructure in such a way as to reward entrepreneurs and startups -- rather than to tax and regulate them to death, and starve them of energy as the Obama - Pelosi regime seems intent on doing.

New Oil Sands Technique Holds Promise for Future Development of Vast Canadian Oilsands

A technological revolution is brewing in the Canadian oilsands which promises to make the vast fossil fuel resources both more economical and of higher quality. A partnership between Nexen Inc. and OPTI Canada has developed a way of substituting syngas from low quality bitumen in place of expensive natural gas, which is used to generate steam to soften bitumen so that it will flow to the surface. The bitumen is then upgraded and hydrocracked to a light synthetic crude oil.

Briefly, bitumen is steamed out of the earth, then processed to separate out the sand and water, as other steam assisted gravity drainage projects, then the water gets recycled back into steam.

Where Long Lake gets interesting is that the diluted bitumen then gets partially upgraded, and those products get further upgraded through a hydrocracker into light synthetic crude with low sulphur content, with the asphalt-like bits turned into synthetic gas. The gas is subsequently burned to produce the steam to produce the bitumen, and as a source of hydrogen for the hydrocracker that produces the synthetic crude. _CalgaryHerald

Combining the substitution of syngas-from-trash-bitumen for expensive natural gas plus the upgrading to low sulfur light synthetic crude, will vastly improve the economics of the entire oilsands venture.

Until Hyperion and other companies can provide small nuclear reactors to provide the steam and energy for harvesting oilsands and upgrading in situ, this new gasification process will probably be the frontrunner for oil sands development.

It is too bad that BP and Husky weren't in on the project. They will either have to play catch-up or get out of the game.

Canadian Oil Sands Production to Increase to Over 3 million barrels per day by 2015

The increase in bitumen production from Canadian oil sands will be from just over million bpd to just over 3 million bpd. US and Canadian pipelines and refinery capacity should keep pace with this expansion.

Strong growth in oil sands production during the past few years has been an important contributor to global supply and provided the US with the prospect of a secure source of supply from Canada. Bitumen production from Alberta's oil sands during 2007-15 will increase to 3.1 million b/d from 1.2 million b/d.

This outlook is based on an assessment of individual projects that are currently in production or likely to come on stream. It also anticipates delays to projected start-up dates and less than full utilization rates due to anticipated technical problems. _RedOrbit

More details at the source.

Advances in THAI extraction and other advanced in situ processes, may lead to even faster production increases from oil sands.

Peak Oil: Meet Saskatchewan Oil Sands

Alberta does not have all the oil sands in Canada. Saskatchewan comes in for her fair share.

Industry and Resources Minister Eric Cline is hoping new regulations that came into effect Monday will encourage more exploration of Saskatchewan's oilsands and oil shale resources.

"If we had more companies operating up there ... then that would dramatically alter the situation,'' Cline said Monday.

The new regulations have been developed after consultation with the industry and other jurisdictions, and are an update of regulations approved over 40 years ago.

....Oilsands were identified in the province in the 1970s in an area north of the Primrose Lake Air Weapons Range, but there has been limited interest until the last few years.

Exploration for oil shales in the Hudson Bay area of the province was conducted 40 years ago, and the area has seen renewed exploration by industry recently.

Meanwhile, the first company to explore and develop oilsands resources in northwestern Saskatchewan in 40 years is stepping up development of its Axe Lake discovery, near La Loche.

Source

Meanwhile, several giant oil sands development projects are getting started in Alberta.

This summer, as many as 7,000 construction workers will be on the site of Canadian Natural Resources Ltd.'s Horizon project, which features an oil sands mine and upgrader north of Fort McMurray. The expansion of Royal Dutch Shell PLC's Athabasca mine and its Scotford upgrader near Edmonton employ about 2,000 workers right now, with a peak of more than 6,000 next year.

An upgrader is a sprawling industrial facility where bitumen, a mixture of sand and oil, is put through searing processes where the sand is stripped away from the oil and the low-grade crude is upgraded into synthetic oil. Total plans to use a method that's called delayed coking, a widely employed and proven process.

Skilled construction workers such as welders, ironworkers, electricians, pipefitters, millwrights, and other skilled workers will be getting paid a lot of money in various oil sands, shale oil, and coal projects over the next two or three decades. After 20 to 30 years, I suspect the transportation industry will be using more biofuels and electrical energy than fossil fuels.

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