Coordinating Increased Production Streams and Getting Products to Optimal End Markets for Maximum ROI: A Producers Perspective Oak Point Energy Ltd. Superior SAGD Development Through Applied Engineering Innovation Oak Point Energy…
Presentation Overview Oil Sands Growth Forecast Growth Forecast Oil Sands Recovery Methods Changes in the Industry Market Access Infrastructure Pipelines Rail Economic Impact Diluent Critical Role in Oil Sands Oil Sands…
Significant Growth Potential in Oil Sands But Not Without Challenges 2
Bitumen and Extra Heavy Oil Global Opportunity - Majority of World Reserves Heavy Oil Reserves Are the Future Extra heavy oil & bitumen make up over half of the worlds reserves Conventional reserves has been reduced to 30% of the…
Alberta Advantage Reliable Low-Cost Supply Opportunity Heavy Oil Resource 170 billion barrels of recoverable resource One of the lowest royalty regimes in the world Infrastructure well developed Abundant Low-Cost Natural Gas Clean…
Condensate Demand Oil Sands Production Forecast Oil Sands Production Forecast 6,000 5,000 Production (kbpd) 4,000 3,000 Oil Sands Mining 2,000 1,000 In Situ Oil Sands 0 2005 2010 2015 2020 2025 2030 June 2013…
Industry is Changing Response to Cost Escalation and Shift to In Situ Shift from Mining to In Situ (CSS or SAGD): Diluent added to separate water/oil emulsion Export a diluted bitumen (dilbit) product Upgraders no longer included in…
Oil Sands Growth Will Depend on the Health of the Industry The bullish oil sands growth forecasts are under significant pressure on a number of fronts Economics: Capital costs continue to escalate and are prohibitive to new…
Infrastructure Expansion Condensate Demand is Uncertain Diluent Supply Infrastructure: North American liquids rich shale gas driving abundant supply of condensate Storage and pipeline infrastructure expansion required Diluent costs…
Oak Point Solution to Oil Sands Economics SAGD Facility Design to Improved Project Execution Portable Modular Facility Design: Portable facilities in three standard configurations Substantially reduces the project cost and schedule…
The Solution: Standardized Portable SAGD Facilities UltraLite 1nSite MultiSite Capacity 1,260 bbl/day 7,200 bbl/day 21,600 bbl/day 1-2 well pairs 8-12 well pairs 2-4 well pads Application Pilot Small assets Large, contiguous…
Diluent Supply and Demand Growth 12
Condensate Demand Increasing for Dilbit Canadian Condensate Production Falling Canadian Condensate Production Forecast 180 Significant oil sands growth coupled with 160 declining Canadian condensate production requires condensate…
Condensate Import Requirements Condensate Limitations will Limit Growth Incremental Condensate Import Forecasts 2,000 This level is impractical. Significant new investment 1,800 will be required in infrastructure 1,600 1,400…
US Shale Gas Future Source of Condensate Supply Liquids-Rich Plays: Eagle Ford Barnett Woodford Utica Niobrara 15
US Lease Condensate Production Rapid Growth in the Past 5 Years US Lease Condensate Production 800 Eagle Ford Shale projected to produce 250-400 kbpd by 2020 700 kbpd 600 500 400 2005 2006 2007 2008 2009 2010 2011…
Diluent Supply Infrastructure Limitations Could Limit Oil Sands Growth Diluent Supply Limitations High cost of condensate and low value to the refiner coupled with high cost of transport is adding economic burden to oil sands…
Pipeline and Rail Infrastructure Market Access for New Production 18
Pipeline and Rail Infrastructure Producer Driven and Public Acceptance Infrastructure Development will Lag Production Production growth is essential for infrastructure expansion - Full utilization essential to meet new infrastructure…
Major Challenges to Overcome Market Access is Pivotal Production Growth Infrastructure Economics Significant impact on economics Uncertainty Public supported Intensity approval process Scale Expansion of Production must Cycle…
New Pipelines It Could Be A While Opposition to the Western Canadian Pipeline Option Opposition to the U.S. Pipeline Option 21
Bitumen Transportation as Dilbit Inefficient Use of Pipelines Limited Market Access 2:1 blend of bitumen/condensate for pipeline spec Diluent, 1.00 Ratio lower for heavier diluents Diluent Deasphalted Oil such as light oil,…
Pipeline Access Cannot Meet Demand Industry Explores Alternaternatives Negative Public Sentiment Inhibits New Construction Dilbit Production Results in Inefficient Use of Existing Pipelines Rapid Growth of Crude-By-Rail Option Old…
Crude-By-Rail No Longer Viewed as the Safe Option 24
Gaining Public Trust Balancing Impact and Benefit Real and Substantial Environmental Impact Reduction Minimal land disturbance Reduce water use and disposal Reduce air emissions Immediate site reclamation Reduce spills Transport…
Expanding Infrastructure to Meet Demand Near-Term and Long-Term Options 26
Market Access For Optimum ROI Significant Investment Required Near-Term Constraints: New infrastructure projects cannot be completed in a timeframe that can have a material impact 600-800 kbpd of diluent required to sustain oil sands…
Market Access For Optimum ROI Near-Term Actions Rail Transport Due to limitations in pipeline availability, companies are increasingly turning to rail as an alternate transport option Construction of new railcars and rail…
Market Access For Optimum ROI Long-term Actions Local Bitumen Upgrading Eliminate the need for diluent for transport Eliminating diluent and asphaltenes reduces pipeline load by 50% High heavy-light price differential will…
Closing Remarks The solutions are out there Better alignment of all stakeholders is critical A different result will require changes We need to get moving or get left behind 30
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