Petrobank fires up new oil extraction technology

Canadian oil and gas firm Petrobank will begin testing new oil extraction technology at an oil well in Saskatchewan that could position the region as a major force in North American energy production. The toe-to-heel air injection, or THAI, technology is to be trialed on a $12 million, two-well site near Kerrobert. The method allows for greater oil recovery rates and leaves a smaller environmental footprint than other conventional methods. THAI uses underground combustion to heat the bitumen or oil. The combustion front then pushes oil and gases to the surface through horizontal production pipes.  It is therefore possible for the technology to access oil that is currently not recoverable, the company said.  It is also a vast improvement on water-intensive, steam-assisted gravity drainage (SAGD) systems, which can only yield approximately 10 per cent of the contained oil in fields or reservoirs. It is hoped that the two Kerrobert wells will produce between 1,000 and 1,200 barrels of oil per day (bpd). Petrobank's Whitesands project near Conklin, Alberta, was the first to use the patented THAI technology. The company is also working on a third trial, the Dawson site in the Peace River region of Alberta, under a joint venture with Shell.  PetrobankÔÇÖs first commercial project to use the technology will be May River, situated beside Whitesands, which is an initial $250 million operation producing 10,000 bpd.  It is hoped May River could eventually expand to produce 100,000 bpd, for a total cost of $2.5 billion.  Regulatory approval for May River is expected early in 2010.  The company is partnered with Baytex Energy Trust on the 50/50 Kerrobert joint venture. Petrobank has estimated that by using the new extraction method, a further 20 billion barrels of oil in Saskatchewan could be recovered, as well as a similar amount in the Alberta heavy oil zone.  Petrobank also has oil operations in Colombia, and plans to market THAI technology worldwide, especially to countries owning heavy oil reservoirs such as Venezuela and China.  The company has described the new technology as producing oil in an environmentally sustainable way.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *