Heavy <strong>Oil</strong>KOC’s Next Great ChallengeThe importance of heavy oilwithin the oil industry, andparticularly within the State of<strong>Kuwait</strong>, is increasing as lightcrude reserves dwindle, theprice of oil increases, and newtechnology eases the difficultiesof producing and refining. Infact, KOC plans to have 900,000barrels per day, or nearly aquarter, of its planned capacityof four million barrels per day by2020 coming from heavy oil.What is Heavy <strong>Oil</strong>?Although the words heavyand viscous are often usedinterchangeably when referring to40October - December 2012
heavy oil, density and viscosityare not related. Heavy oils are,however, more dense than regularcrude and any oil with an APIof less than 22 is considered tobe heavy, while an API of lessthan 10 is considered superheavy.The density of heavy oilis due to an increased number ofcarbon atoms in the oil moleculesthemselves (high molecularweight) as well as the presenceof additional molecules suchas inorganic salts, asphaltenes,naphthenes, paraffins, and metals.Heavy crude is formed as a resultof the biodegradation of lightcrude as bacteria consume thelighter ends and leave the heavierhydrocarbons.Where is Heavy <strong>Oil</strong> Found?Heavy oil is found around theworld in over 30 countries,with the largest reserves off thecoast of Venezuela and in theCanadian province of Alberta;according to the Society ofExploration Geologists (SEG) thetwo countries together controlalmost 80% of known heavy oilreserves. Over 900 billion barrelsof heavy oil are known to exist inthe Middle East. The tar sands ofCanada contain super heavy oilthat does not flow at all, and as aresult, the oil is mined in massiveopen pits.How Cost Effective is it toProduce Heavy <strong>Oil</strong>?The current high price of crudeoil makes it economically viableto develop heavy oil reservoirs.However, other factors mustalso be considered, includedthe availability and cost offresh water, energy usage andenvironmental impact. Theproduction and processing ofheavy oil uses more energyand produces more emissionsof GHG and CO2 (due to thehigher proportion of carbon tohydrogen in the oil molecules).In addition, heavy oil oftencontains impurities such assulfur, vanadium, and otherheavy metals, which are costlyto remove. According to theCalifornia Independent PetroleumAssociation, the price spreadbetween light and heavy crudeis approximately US $12.50 perbarrel. The National EnergyBoard of Canada calculates theoperating cost (not including costof capital, taxes, or royalties) ofsteam-based recovery techniquesto be CDN $10-14 per barrelcompared with cold recoverytechniques which cost CDN $6-10per barrel.What Technology is Used toExtract Heavy <strong>Oil</strong>?The extraction of heavy oildepends on the characterisiticsof the oil and each individualreservoir; what works in one maynot work in another. That beingsaid, there are several “standard”technologies in use with steaminjection, either cyclic steamsimulation (CSS) or steam-assistedgravity drainage (SAGD), beingthe most common.CSS is also known as “huff andpuff” and relies on a singletunnel to inject steam into thereservoir and consequentlyremove the liquefied bitumen.This technology is relatively oldand is being gradually replacedby SAGD, which uses horizontaldrilling with two drill holes, oneabove the other two. Steam isthen injected in the upper holeand the liquefied bitumen ispumped through the lower holeto the surface. This method isnot only more efficient than CSS,but it also allows for continuousrecovery of oil.An experimental technologywhich also uses horizontaltunnels is the vapor extractionprocess (VAPEX). Ethane orbutane are used to dissolve,rather than heat, the bitumenand although operation costs arelower than SAGD, the techniquerequires more tunnels. Toeto heel air injection (THAI) isanother experimental techniquewhich uses combustion to liquefythe bitumen, which is thencollected and brought to thesurface.What is the foreseeable futurefor heavy oil?Experts predict that while theproduction of light and mediumcrude will remain level or evendecline, production of heavy oilwill grow gradually as demandfor oil increases. Since supplywill not be able to keep up withdemand, the gap will need to befilled by gas liquids, biofuels,GTL, and CTL.Heavy <strong>Oil</strong> and KOCHeavy oil with an API of 11-17is known to exist in the KOCfields in the South East and West(Burgan and Umm Gudair andthe Neutral Zone) and in theNorth (Ratqa), with the Northshowing the most promise. Inorder to cope with the refiningof heavy oil, KOC will haveto increase refining capacity.The importance of heavy oil to<strong>Kuwait</strong>’s oil industry will increaseover time as traditional oilreserves diminish, demand for oilincreases, and new technologymakes the production of heavyoil more feasible.October - December 2012 41
Change language