Cenovus Energy Inc. has a problem with its steam.
In the oil sands business, companies pay close attention to the steam-to-oil ratio. It's a measure of how much steam is used to produce a barrel of oil in a steam-assisted gravity drainage (SAGD) oil sands operation. A higher ratio means higher production costs and greater emissions.
Cenovus noticed a higher steam-to-oil ratio at its Foster Creek oil sands operation, and is now examining what's going on underground as it tries to find the most efficient way to extract bitumen.
"We need to figure out how to optimize the whole field now," Harbir Chhina, Cenovus's executive vice-president of oil sands, said in an interview. "We predicted 90 per cent of it right. It is the last 10 per cent that we're trying to get right now."
The Calgary-based oil sands company has reached an industry milestone. Some of its underground chambers at Foster Creek are essentially saturated with steam and have merged with chambers on other parts of its property, and future production requires some new thinking.
Steam-assisted gravity drainage projects use well pairs rather than mines to extract bitumen. Steam goes down one pipe, and bitumen flows up another. Energy companies cluster these pairs on so-called pads, and the chambers of steam form under each well pair and eventually combine underground until the pad is home to a larger chamber. Cenvous believes some of the steam chambers under its pads at Foster Creek are now combining with steam chambers at other pads – a new phase in oil sands development. It believes it now hosts two large mega-chambers and one smaller one.
Now Cenovus is experimenting with ways to best use its steam when dealing with the mega-chambers. The company needs to reduce its steam-to-oil ratio, and satisfy the Alberta Energy Regulator.
"Their job is to make sure we recover every last barrel and that the province and the average Albertan get their fair share of the resource," Mr. Chhina said. "They are looking at making sure we are getting to the last barrel."
The target is to recover 70 per cent of the oil in place. Cenovus hopes it will produce oil from these wells for another decade or so.
Cenovus believes it has three options it can employ to best suck out the bitumen. The first is about lowering the pressure in the reservoir; the second involves drilling additional wells, which Cenovus calls wedge wells; and the third revolves around when to cut off steam at certain injection wells.
Oil sands companies can control a reservoir's pressure by tinkering with how much steam, natural gas, air, and other products it shoots underground. Injection wells start with steam, and convert to the other products later in the extraction process. Cenovus can turn the dials on each well to tweak pressure. It needs to get the pressure right in order to maximize how much bitumen reaches the production wells.
Wedge wells give Cenovus flexibility. If there is a slice of the steam chamber out of the reach of the other production wells, it can put a new well within reach of the melted bitumen. This instantly gives it access to bitumen that can be extracted and does not require additional steam. These are used in combination with the first option.
Cenovus and all of its competitors will eventually stop injecting steam underground. This is called the blowdown phase. Once enough bitumen is melted, shooting further steam is a waste. Wells will shift to blowdown at different times, depending on when the company and regulator believe it is ideal to turn off the taps. The trick is deciding when to close the valve.
Cenovus believes it might have been better off if it had turned off the steam at some of its wells earlier.
"Only God gets it right 100 per cent the first time," Mr. Chhina said.
Cenovus, a spinoff of Encana Corp., also had to move slowly during the initial phase of its experiments because the AER has never been here before. Foster Creek started as a pilot project in 1996 and became the first commercial SAGD project in 2002.
"Whoever comes first has to work with the regulator. We have to educate them on the pros and cons of everything and make them feel comfortable that the guidelines that have been put in place are the best to look after the interest of the average Albertan," he said. "It is in our best interest to educate them, as long as we keep moving forward."
Darin Barter, a spokesman for the regulator, in an email said: "Although there may be no 'blueprint' for the Cenovus project, the AER regulatory system ensures that the project adheres to all regulations, and a process to review each application is in place.
"Generally, the AER encourages companies to apply new technologies and approaches on a small scale to acquire learning's [sic] prior to applying for implementation on a broad scale."
Cenovus is comfortable with the regulator's cautious, if slow, approach.
Everything Cenovus does – both its failures and successes – in dealing with the mega-chambers will allow other energy companies and the regulator to better handle their projects, Mr. Chhina said.
"There's a lot of companies coming behind us," he said.