Derrick Digest for May 26, 2017: Examining the future of Canada's oilsands

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The Derrick Digest is a weekly collection of curated content, based on events from across the oil and gas industry, that caught our eye at Pennine Petroleum Corporation.

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MAY 26, 2017

 

Challenges, solutions and prospects for future success

They’re home to the third-largest proven oil reserves in the world.

They’ve got a capacity of three million barrels a day, larger than that of many countries.

But as Canada’s oilsands celebrate 50 years of commercial operations, the usual torrent of new projects has slowed to a trickle, multinationals are selling their oilsands assets—and many are wondering what their future looks like.

That’s the focus of a special report by Oilweek, which looks at challenges the oilsands are facing, the solutions that industry players are seeking, and prospects for future success.

Oilweek’s report looks at:

  • Canadian oilsands production ownership;
  • The evolution of oilsands asset deals over the past decade;
  • The industry’s focus on growth via optimization of future assets;
  • Technological improvements in the area of greenhouse gas (GHG) emissions; and
  • Efforts to reduce operating costs.

An “important point to remember,” Wood Mackenzie analyst Stephen Kallir tells Oilweek, is that “a lot more of that money will now stay within Canada, reinvested into Canadian resources, which provides an obvious benefit for the country.”

 

Quebec wants Western Canadian oil, says MEI poll

When it comes to crude oil supply, Quebecers prefer a made-in-Canada solution.

That’s the gist of a recent Leger poll, commissioned by the Montreal Economic Institute, that found 65 percent of Quebecers prefer their oil be imported from Western Canada, rather than other countries such as Mexico, Saudi Arabia and Algeria.

That 65% number—effectively, two out of every three people—has risen from a year ago, when a similar poll found 59% of people in the province want Canadian oil.

Significantly, 56% of respondents also prefer the idea of Quebec using its own oil resources, rather than bringing in crude from anywhere else.

“The results of this poll show not only that Quebecers are open to the development of oil in the province, to the use of pipelines as the safest way to transport it, and to prioritizing Western Canadian oil, but that they are more in favour of these things than they were a year ago,” says Michel Kelly-Gagnon, the president and CEO of the MEI.

“When it comes to future public policy decisions, politicians will have no choice but to take these facts into account.”

 

Self-adjusting drillbit attracts attention

This so-called “smart bit” was, seemingly, a very smart move.

Born out of a company-wide innovation contest at Baker Hughes, a new self-adjusting drillbit called TerrAdapt may one day become the industry standard.

This new adaptive PDC drillbit can adjust the depth of cut without intervention from the surface, reports Upstream Online—responding to reservoir and drilling conditions in real time, alleviating stick-slip issues and resisting sudden changes in loading.

Danielle Fuselier of Baker Hughes tells Upstream Online that the company installed “intelligence into the bit to enhance drilling efficiency.”

Field trials began in the summer of 2016, and full commercialization is expected to coincide with this month’s IADC Drilling Conference in The Hague, Netherlands.

Before TerrAdapt, “you had to have a very precise and singular depth of cut setting for the entire well,” adds Fuselier. “We have a range now.”

 

East Coast LNG project pushes ahead

Canadian LNG projects are moving ahead—it just depends which coast you’re looking at.

Last week, Pieridae Energy Ltd. Announced a reverse takeover of Quebec’s Petrolia Inc., and in the process became Canada’s first publicly traded liquefied natural gas (LNG) company.

Pieridae, reports the Calgary Herald, has all necessary regulatory approvals to move ahead with its Goldboro project in Nova Scotia. Pieridae also already has a 20-year off take agreement with Uniper SE, Germany’s largest utility, and a loan guarantee from Germany’s national government that runs into the billions.

Ultimately, the company’s goal is to begin shipping LNG to Europe by 2021, with inherent advantages that include a deep-water port, proximity to pipe, and a transit time that’s six full days shorter than the U.S. Gulf Coast.