1 Primary funding is provided by The SPE Foundation through member donations and a contribution from...

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

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

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

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

5

What is Oil Shale?

RockKerogen

Pyrolysis

Upgrade

700 - 800 o

F

Syn- Crude Naphtha

Jet Fuel

Diesel

Gasoline

Hydrogen

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

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

8

America’s Oil ShaleMost Concentrated Hydrocarbon Deposit

2 Trillion Barrels

6 Trillion Barrels

Source: US DOE, 2004

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

10

The Mahogany Zone

• The Most Prolific

• Up to 1000 Ft Thick

• Up to 75 Gal/Ton

Source: Redleaf Resources, 2008

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

12

Oil Shale Production ProcessesOil Shale Production Processes

Mining Retort UpgradingResource Refinery

Surface ProcessSurface Process

Drilling Heating UpgradingResource Refinery

In-Situ ProcessIn-Situ Process


Choke Point

13

Shell In-Situ Conversion Process


High Value Products

Pilot Test (Colorado, USA)Pilot Test (Colorado, USA)

Light Surface Processing

HEATER

PRODUCER

OVERBURDEN

14

Other Examples of In-Situ Technology

Pilot Tests (Colorado, USA)Pilot Tests (Colorado, USA)

Chevron Process

FracturesFractures

Injector

Producer


AMSO Process

15

Ecoshale In-Capsule Technology

Source: Redleaf Resources, 2008

HOT GAS

COOL GAS

Pilot Test (Utah, USA)Pilot Test (Utah, USA)

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


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


RESIDUE COOLING

COMBUSTION

STRIPPING

PYROLYSIS



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)


EROI =Energyout - Energyin

Energyin

ER

OI

Oil Shale

Oil Sands

3

7

10

7

5

19

“Oil shale is a local asset under global constraints.”

Klaus Brendow, Senior Advisor

World Energy Council

June 9, 2009

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

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

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

23

Shell CEO Says Higher Costs LimitCanadian Oil Sands Projects

Oct 8, 2009

24

Total Canada Chief Says Oilsands Need Pricier Oil

Oct 4, 2009

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


$80

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

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

28

Water Requirements

• 1-3 Barrels of Water per Barrel of Shale Oil

• Challenges:–Water rights–Water availability –Water runoff–Ground water protection


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

@


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

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

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

33

Appendix

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

35

Breakdown of Economic Price for Generic Surface Project

$60/Bbl

Operating Costs38%

Risk Premium9%

Taxes 19%

Cost of Capital19%

Transfer Payments14%


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


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

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


EstoniaEstonia

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

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


41

Development Hurdles

• Access to Land

– 70% on Federal Land

– No Commercial Leasing Program

• RD & D

• Environmental Permitting

• Fiscal Regime

1 Primary funding is provided by The SPE Foundation through member donations and a contribution from...

Documents

Transcript of 1 Primary funding is provided by The SPE Foundation through member donations and a contribution from...