Summary of CSPG Core and Sample Division Meeting January 15, 2002

Transcription

1 Summary of CSPG Core and Sample Division Meeting January 15, 2002 General Questions; (Survey of 10 Companies involved in Oil Sands In-situ and Mining Projects ) 1. How much core do they expect to cut this year and in the future? - approx m per well = 52,500m of 46 boxes per well = 34,500 boxes In general these operators are anticipating similar activity levels over the next 5 years. 2. How much do they expect to submit to the EUB? In general the expectation is that 10% of the core will go to the EUB, but there is confusion over the interpretation of the regulations and uncertainty about who is to make the decisions regarding well selection. At the end of the season most companies submit a list of cored wells to the EUB for them to make their selection. Once description and analysis is complete at the labs the B slab of the core is shipped to the Core Research Center (CRC). Often more core is requested by the EUB than the company geologists expected. 3. What do the companies do with the core not requested by the EUB? For most of the In-situ projects the B slab (viewing section) is kept in dry storage. The duration of retention varies from 1-20 years at present. Most companies anticipate a 5-6 year rotation for core in storage but none of the companies surveyed have a definite policy in place. The duration of storage will be determined by an assessment of two factors, the cost involved and the perceived value of the core for future reference. Most companies keep the A slab (sampling section) of the core in refrigerated storage for one season and then dispose of it once they are confident in their analysis data. A few companies keep the A slabs in dry storage after the first season for future analysis. 4. Where is the Company section stored? 1) Very few operators have their own warehousing. If the core is kept on company property (at no cost) the storage conditions, organization level and access to the material are issues of concern. 2) Commercial warehousing in Calgary is convenient but there is a cost involved and with some establishments there is a challenge with timely access and viewing space. 5. Where is core viewed? In order of frequency; -the commercial laboratories who are doing the analytical work. -the Core Research Center. -private viewing rooms (company owned and commercial).

2 6. Do they view core at the CRC that is not from their own project areas? Yes: 1) When assessing prospects that are adjacent to existing cored areas. 2) To review lithology in areas that have been produced to evaluate the production processes used. 3) From an geological stand point to re-evaluate facies interpretations. 7. What is their opinion of the role played by the Core Research Center, currently and in the future? a) Core submission requirements; too little? too much? There is confusion over current submission requirements but in general more core retained for public access is better in theory because they are guaranteed access without the cost of organization and storage. b) Core retention periods for In-situ and Mining projects? There were two general trends identified among the companies surveyed. 1) Disposal of the material after the area represented has been produced in both mining and in-situ projects. 2)Retention of the material indefinitely for future analysis and reference. From our survey the general consensus is that core is a valuable resource and that the role played by the CRC is important for the retention of this resource and that public access to the material is an important portion of the facilities function. Allan Melnychuk spoke on behalf of Gerry Gurba (Gerry Gurba was to speak for Petro Canada as an example of what one in-situ operator is doing with their core material. Mr. Gurba was ill and not able to attend.) Conversations with Gerry indicate that Petro Canada is one of the few companies which still has their own warehousing in Calgary but they too are faced with a space challenge presented by the volume of oil sands core being cut. They are currently looking for alternate storage space and reviewing their core retention policies. They have been storing the B portion of the core with no retention time limit established at this time. The A portions are kept in cold storage for one or two years. They have kept some core frozen for more than 6 years. Mr. Gurba has expressed support for the retention of oil sands core at the CRC for indefinite periods of time to have material available for future analysis techniques and the evaluation of past production processes. Gretchen Johnston spoke on behalf of the mining operators whom she has contacted. Syncrude is maintaining an extensive coring program and expects to continue doing so. They submit a coring program to the EUB and provide the core from wells selected by the EUB. They do process, describe and analyze all core which they cut but only retain representative wells from specific areas. These wells are recorded by companion sample strips cut from the core at the same time as the original analysis and are maintained as jarred samples. Once the core has been described and analyzed the material is disposed of in the tailings system.

3 CNRL will core approximately 400 wells in both their in-situ and mining projects. Last year the EUB took almost all of the core which was cut. This was more than expected. This year it is expected that the EUB will require fewer wells. There was some confusion over the EUB regulations of one core per quarter section. CNRL has no fixed policy at present for core retention but at current coring rates will end up with a large volume of core both A and B sections in private storage. The core is seen as a valuable asset not only for modeling the reservoir but also as back up for evaluation of extraction processes. It is felt that disposal of core from processed areas in both mining and in-situ projects may be premature because the extraction processes are relatively new and the processes are evolving. Retention of this material also allows for repeatability of special analysis techniques. Comments by Gunter Wellman; Administration Director, AEUB Core Research Center. The representatives of the EUB who are directly associated with the Core Research Center are aware of the upcoming challenge in respect to a shortage of space in the current facility. They have held internal meetings to review the situation and need options and support from the stakeholders in order to make recommendations to their superiors. They recognize the potential for the CSPG Core and Sample Division to act as a catalyst to stimulate dialogue on this issue. DATA Provided by Gunter Wellman; Currant rate of acquisition of core in the past 12 months; Conventional core Oil Sands Core 13,100 boxes 35,560 boxes (Conventional box size represented by oil sand core for space calculation) 35,560 oil sands boxes = 20,620 conventional boxes Total number of boxes for space calculation; 13, ,620 = 33,720 total boxes. Core storage space available (existing rack space and expansion space) = 251,942 boxes Time to saturation based on past 12 month rate of acquisition = 7.5 years.

4 Oil Sands Core Viewed Wells in Storage (Mining and In-situ) 4,585 Wells viewed (one or more times) 2,878 Wells viewed only once 673 Wells never viewed 1,707 Cores from mining areas 2,033 Cores from mining areas viewed 423 Oil Sands Core Viewed / Volume by time Frame inclusive 2 years 776 wells inclusive 4 years 1,337 wells inclusive 6 years 765 wells Options; 1) Expansion of the current building is not seen as an option because they have already exceeded the land use bylaw on this plot and it would require re-zoning with the city. Also the Research Park Authority is not in favor of warehousing in the park. 2) A separate building is an option which has not been investigated yet. There is some land available in the vicinity of the Research Park. Major questions concerning a new building are; Where would it be located? Who is to bare the cost of acquisition and building of a new facility? How would the new facility be run? Will it be for Oil Sands core only? Would the Oil Sands core currently in storage be moved to the new location? Will it be for storage only or will there be a viewing facility comparable to the current facility? Who will cover the cost of the duplication of maintenance and staffing? Current regulations require operators to submit of the first core in any quarter section whether conventional or oil sands to the Core Research Center for public record. This criterion was set through consultation with stakeholder operators. If some of the operators are surprised by the amount of oil sands core requested for submission then this may not be the correct criterion and further discussion may be necessary. At present all core including mining core are kept indefinitely. Ownership of the core is not defined. The EUB is the custodian of the material for the people of Alberta. Potentially the operators could remove the core from the EUB.

5 3) To extend the life of the current facility the regulations could be changed to reduce the amount of Oil Sands core being submitted. There could also be a purging of the material that is currently in storage. The original operators could reclaim the core or it could be disposed of. Disposal regulations have changed in the past year and it is now easier to dispose of oil sands core material because it does not have to go into the city s limited capacity Hazardous Waste Material disposal site. Comments by Rick Marsh; Section Leader, Oil Sands and Coal Section Resource Appraisal Group, AEUB With the storage space shortage that the CRC is facing there must be debate on both long range and short range solutions. Building a new facility would be a long range solution. In the short term to alleviate the pressure on the current facility a decision should be made by industry regarding the retention of the material which is of highest value. Being that there are exposed cross sections of the reservoir visible in the open pits of the mining operations one could argue that the core from those produced areas are of less value than the core from the less accessible insitu projects. The core from the in-situ projects are currently the most active for viewing at the CRC, which also enhances their value for retention. It is generally perceived that the amount of core generated in the mining sector may decline slightly and plateau over the next 7.5 years, while coring for the in-situ projects may maintain the current rate or actually increase as more information is required to step out into marginal reservoirs. The purpose of the core which is being kept for public record is a topic that needs to be discussed by the stakeholders in industry. From discussion should come decisions on what direction is most appropriate for the CRC facility. With collaboration and support from the stakeholders, policy can be recommended to the EUB and working solutions can be pursued.. Bearing in mind the estimated 7.5 years of available space, now is the time to make those policy decisions,while there is still sufficient lead time to act on long term solutions. General comments and topics presented It is generally assumed that the onus is on the EUB to decide which wells are to be submitted for storage but once the list is returned to the operator suggestions can be made for the submission of alternate cores, which in the opinion of the operator are of greater value being more representative of the targeted formations. If the volume of oil sand core currently in storage was removed from the CRC and relocated elsewhere how much additional time would be gained? Answer; by Gunther Wellman; A tremendous number of years of grace would be achieved because the volume of conventional core being submitted is declining.

6 An option to the quantity of material at the CRC may be storage of quality material possibly even refrigerated storage of selected core. Refrigerated storage would be expensive and there are questions about the value of maintaining core in the frozen state for indefinite periods of time. The waters which are hopefully being preserved may have sublimated after 10 to 20 years. Who is to select the quality core? Should that responsibility rest with the operators? What are the concerns of researchers, academics and other non operator stakeholders who have an interest in the future of the oil sands core at the CRC? What is the role of public versus non public information (core) in legal and regulatory hearings? Could photography be an acceptable alternative to storage of actual core for the public record? If so should all core be photographed and kept accessible for the public record? Could a smaller quantity of core be kept as support for the photos? If photos are kept as public record and core is discarded, then should there be a change in the types of analysis records which are kept as companion material for the core photos? The next meeting is tentatively set for Thursday, March 07, A downtown location is preferred to encourage a stronger representation from industry. Summary by Allan Melnychuk