The SPE Foundation through member donations and a contribution from Offshore Europe

Transcription

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 Program 1

2 Unlocking Ten Trillion Barrels of Global Oil Shale Resources - The State of the Industry Khosrow Biglarbigi INTEK, Incorporated Society of Petroleum Engineers Distinguished Lecturer Program 2 2

3 Demand For Liquid Hydrocarbon Worldwide % 24% Increase Increase Million Barrels Per Day Year Source: EIA,

4 Global Liquid Hydrocarbon Supply 120 Million Barrels per Day Oil Existing Fields NGL CTL GTL Future Discoveries? Oil Sands EOR Heavy Oil Oil Shale Bio Fuels Source: IEA, 2008 Year 4

5 What is Oil Shale? Rock Kerogen Syn- Crude o F Pyrolysis Naphtha Jet Fuel Diesel Gasoline Hydrogen Upgrade 5

6 10 Trillion Barrels of Shale Oil Worldwide Canada Estonia Russia France Italy United States Morocco Egypt Israel Jordan China Zaire Brazil Australia Countries With Oil Shale Deposits 6

7 Known Resources (Barrels) Asia Australia Africa Europe MENA Eurasia Americas 27 Billion 32 Billion 100 Billion 120 Billion 153 Billion 270 Billion 6,100 Billion Source: USGS, 2005 * Jordan NRA,

8 America s Oil Shale Most Concentrated Hydrocarbon Deposit 2 Trillion Barrels 6 Trillion Barrels Source: US DOE,

9 Substantial Areal Density 1000 Barrels Per Acre 1,500 1,250 1, Wyoming USA Oil Shale 800 Utah USA Source: Oil and Gas Journal, August ,300 Colorado USA Alaska N. Slope Oil Canada Oil Sands 9

10 The Mahogany Zone The Most Prolific Up to 1000 Ft Thick Up to 75 Gal/Ton Source: Redleaf Resources,

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

12 Oil Shale Production Processes Surface Process Resource Mining Retort Upgrading Refinery In-Situ Process Choke Point Resource Drilling Heating Upgrading Refinery Source: US DOE,

13 Shell In-Situ Conversion Process Pilot Test (Colorado, USA) PRODUCER HEATER OVERBURDEN High Value Products Light Surface Processing Source: US DOE,

14 Other Examples of In-Situ Technology Pilot Tests (Colorado, USA) Chevron Process Producer AMSO Process Injector Fractures Source: US DOE,

15 Ecoshale In-Capsule Technology Pilot Test (Utah, USA) COOL GAS HOT GAS Source: Redleaf Resources,

16 Alberta Taciuk Processor (ATP) Pilot Test (Utah, USA) Vapour tube Combustion zone Retort Preheat tubes Cooling zone Oil shale feed 750 C 500 C 250 C Source: US DOE,

17 Gas Combustion Retort (GCR) Brazil (4,000 Bbl/d) China (4,000 Bbl/d) Estonia (6,000 Bbl/d) Australia (Project Scale Up) PREHEATING MIST FORMATION PYROLYSIS STRIPPING COMBUSTION RESIDUE COOLING Raw Shale Oil Mist Extractors Source: US DOE, 2007 Spent Shale 17

18 12 Energy Return on Investment (EROI) 10 EROI = Energy out - Energy in Energy in Oil Sands 8 EROI Oil Shale Oil Shale (In-Situ) Source: US DOE, 2007 Oil Shale (In-Situ, Non.Elec.) Oil Shale (Surface) Oil Sands (Surface) Oil Sands (In-Situ) 18

19 Oil shale is a local asset under global constraints. Klaus Brendow, Senior Advisor World Energy Council June 9,

20 Oil Shale Project Costs Item Unit Range Capital Cost $/BPD * 45K-65K O&M Cost $/Bbl * Barrel of Daily Capacity Source: INTEK, Inc.,

21 Canadian Oil Sands Operating Costs Dollar/ Barrel $40 $35 $30 $25 $20 $15 $10 $23 $30 $35 $5 $0 Source: Suncor, Year 21

22 Canadian Oil Sands Capital Costs $1,000 per Bbl of Daily Capacity $3 Billion $11 Billion 100,000 Bbl/D Project 0 Suncor - Millennium Albian Syncrude - Aurora 2 & UE 1 Nexen OPTI CNRL - Horizon Shell - Muskeg & Scotford PCA/UTS Fort Hills Source: Canadian Association of Petroleum Producers, April 2008

23 Shell CEO Says Higher Costs Limit Canadian Oil Sands Projects Oct 8,

24 Total Canada Chief Says Oilsands Need Pricier Oil Oct 4,

25 2007 Dollars Per Bbl $80 $70 $60 $50 $40 $30 $20 Economic Price for Oil Shale Technology Rate of Return 15% $60 $50 $35 $75 $10 $0 In-Capsule Source: INTEK, Inc., 2008 True In-Situ Surface Mining Underground Mining 25

26 Oil Shale Environmental Impacts Air Quality Process Plant Use CO 2 Enhanced Oil Recovery Sequestration Other Industrial Uses Capture and Clean Existing Technology HC Gas CO 2 SO x NO x Oil Shale Processing Source: SPE #110590,

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 Green River (USA) 2.5 MMBbl/d 17,000 Square Miles 52 Square Miles Source: SPE #110590,

28 Water Requirements 1-3 Barrels of Water per Barrel of Shale Oil Challenges: Water rights Water availability Water runoff Ground water protection Source: US DOE,

29 The Prize (USA Example) Total Resource 6 Trillion Barrels High Quality Resource 2 Trillion Barrels Technical Recovery 1 Trillion Barrels Reserves Billion $50 - $65 / Bbl Source: INTEK, Inc.,

30 1,400 1,200 Reserves Potential Worldwide U.S. Worldwide Billion Barrels 1, $50 - $65 $75 - $90 $90 - $130 Oil Price ($/Bbl) 30

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 31

32 Your Feedback is Important Enter your section in the DL Evaluation Contest by completing the evaluation form for this presentation or go online at: Society of Petroleum Engineers Distinguished Lecturer Program 32

33 Appendix 33

34 Activities in Estonia VKG VKG Oil Plant Balti Power Plant 15 Million Tons of Oil Narva Shale Oil Plant Eesti Power Balti Plant Kerogen Oil Production ~ 1.8 Million Bbls Eesti Narva Mining Area 425 Km 2 Power Generation ~11 Billion (KWh) 34

35 Breakdown of Economic Price for Generic Surface Project Taxes 19% $60/Bbl Transfer Payments 14% Risk Premium 9% Operating Costs 38% Source: INTEK, Inc., 2008 Cost of Capital 19% 35

36 Cashflow of a Generic Oil Shale Project Cum. Discounted Cashflow (MM$) Before Tax After Tax Room for Government Action Source: INTEK, Inc., 2008 Year 36

37 Average Drilling Cost ($/Foot) Rocky Mountain Region 1,000 Dollars per Barrel of Daily Capacity Oil Shale Costs are Impacted A Few Examples Drilling Costs 60 $2, Year40 $1,500-1,000 Dollars per Barrel of Daily Capacity Mining Costs Upgrading Costs $2, $1, Price per Ton - 15 $ $- Operating Costs ($/Bbl Produced) Tubular Steel Price Year 0 Suncor Syncrude COS Trust Operating Costs

38 Worldwide Oil Shale Activities Production 6,000 Bbl/D 2,430 Mw Exploration 12 Companies Estonia Production 4,000 Bbl/D RD&D 8 Pilot Tests 29 Companies USA Brazil Morocco Jordan China Commercial Scale-Up Production 4,000 Bbl/D Australia Source: INTEK, Inc.,

39 10 Trillion Barrels of Shale Oil Worldwide North America 6,015 Billion bbls South America 82 Billion bbls Eurasia 271 Billion bbls Europe 116 Billion bbls Africa 159 Billion bbls Middle East 38 Billion bbls Asia 27 Billion bbls Australia 32 Billion bbls Sources: World Oil Shale: Dyni 2003 Map: maps.google.com 39

40 Projected Production Potential (Shale Oil in the U.S.) 2,500 Thousand Bbl/D 2,000 1,500 1,000 Accelerated Scenario Measured Scenario Business as Usual RD&D Tax Incentives 500 Base Year Source: US DOE,

41 Development Hurdles Access to Land 70% on Federal Land No Commercial Leasing Program RD & D Environmental Permitting Fiscal Regime 41