Terre de Grace Pilot Project 2012 Performance Presentation

Terre de Grace Pilot Project
2012 Performance Presentation
January 31, 2012

Cautionary statement
Disclaimer
This presentation and the associated slides are provided for regulatory
purposes only, and are not intended to be, and may not be, relied upon by any
person or entity for the purposes of making any investment decision, related to
BP Canada Energy Company or Value Creation Inc. or any of their affiliates.
Additional information regarding BP may be accessed at www.bp.com, and for
VCI at their corporate offices. Such additional information is subject to, among
other things, the cautionary statements, qualifications, and assumptions set out
therein.
Jan 2012
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Agenda
• Objective: This performance presentation is to discuss data and information
acquired since the approval of the Terre de Grace (TdG) Pilot Project
• Subsurface issues related to resource evaluation and recovery
− Background p. 5
− Geology p. 11
− 2D & 3D seismic data p. 25
− Future plans p. 27
• Surface operations, compliance, and issues not related to resource
evaluation and recovery
− Facilities p. 29
− Water sources and uses p. 32
− Water treatment technology p. 34
− Waste disposal wells and landfill waste p. 36
− Environmental issues p. 38
− Compliance statement p. 40
− Future plans p. 42
3

Exclusions and Exceptions to Content
Requirements in Directive 54
• A number of items that are often part of the performance presentation
have not been included because the TdG Pilot Project has not advanced to
the detailed engineering design phase
• Design choices beyond the current application package have not yet been
made for the following:
− Drilling and completions
− Artificial lift
− Instrumentation in wells
• The following will be reported following start-up:
− Discussion of measurement and reporting
− Scheme performance
− Sulphur production
4

Background
5

BP Oil Sands Leases
• BP Canada Energy Company (BP)
acquired its interest in the TdG
property in March 2010 through
the formation of the TdG
partnership
− 75% BP
− 25% Value Creation Inc. (VCI)
• BP is operator of TdG
• VCI currently retains the pilot
approval in their name
• BP has two other non-operated
joint-venture projects with Devon
(Pike) and Husky (Sunrise)
6

TdG Pilot Project
• Approvals in place for a
1,589 m3 /d (10,000 bpd) pilot
project
• Project intends to use steamassisted
gravity drainage (SAGD)
processing and extraction of
bitumen
• Current approval includes a test of
the Accelerated Decontamination
(ADC) and Ultra Selective
Pyrolysis (USP )
• ADC and USP are proprietary
technologies owned by VCI
7

Application History
Feb 16, 2010 Received Alberta Environmental Protection and
Enhancement Act Approval Number 00245502-00-00
(AEW)
Mar 15, 2010 TdG partnership formed
Mar 23, 2010 Received Scheme Approval Number 11393 (ERCB)
Mar 10, 2011 Received extension of the construction start date by two
years, to March 31, 2013, so additional groundwater
and resource delineation and economic analysis can
be incorporated into development plans of the pilot (AEW)
Mar 16, 2011 Deferral of initial performance review meeting to January
2012
Jun 30, 2011 Submitted Cap Rock Integrity Report and Maximum
Operating Pressure as per request from ERCB
8

Current Status
• Ongoing geological, engineering, and environmental studies to support
applications for operations licenses and permits for the pilot project (or to
support future amendments or other applications):
− Resource Delineation
− Delineation wells
− 2D and 3D seismic
− Groundwater
− Water source (hydrogeology)
− Waste disposal wells
− Engineering
− Evaluation of process design
− Optimization of plot plan
− Identification of associated
infrastructure
− Environment
− Hydrology
− Soils
− Vegetation and wetlands
− Wildlife
− Archaeology
− Paleontology
• Resource evaluation (drilling, seismic) continues across the lease area
• Results will inform assessment of development options including
technology used, CPF location, well pad locations, or decision to proceed
directly to a commercial scale project
9

Overview of Gated Project Management
Process
• Placeholder for OMS or MPcp diagram – to describe BP approach to
projects
Confirm commercial viability of
opportunity and identify a range
of development options
consistent with subsurface,
uncertainty and market
conditions, at least one of which
is viable technically and
commercially
Implement the project
execution plan as an
integrated work-scope with
close attention to HSSE,
quality, performance and risk
management
10

Geology
11

Average Reservoir Properties
Project Development Area
• Reservoir Depth: 160 – 210 m TVD
279 – 290 m a.s.l.
• McMurray Thickness: 47 – 82 m
• Pay Thickness*: 15 – 45 m
• Porosity: 33 – 36 %
• Permeability: 2 – 5 Darcy
• Oil Saturation: 50 – 80 %
• Initial Reservoir Pressure: 700 – 1100 kPa
• Initial Reservoir Temperature: 9 – 11 deg C
*Values derived using the following criteria:
Case A: Vsh =< 0.40, porosity =>27%; So =30%; So =

Delineation Well Locations
Existing wells with logs and core
(development area)
Existing wells with logs only
(development area)
Proposed wells for 2011/12
(project area)
Other existing wells
Project Area Outline
Project Development Area Outline
TdG Lease Outline
Type Well
13

Representative Log (Type Log)
Project Development Area Stratigraphy
Clearwater: thick clean marine shale (primary caprock).
Wabiskaw: thin marine glauconitic silts & shales (nonreservoir)
Upper McMurray: thin marine-influenced sands and
shales (non-reservoir in PDA)
Middle McMurray: thick, highly variable fluvial/estuarine
sands, silts and shales (primary reservoir in PDA). Seven
facies are recognized including channelized clean blocky
sands, mud clast breccias, sandy IHS, IHS, muddy IHS,
tidal flat shales, and channel abandonment shales.
Lower McMurray: complex fluvial/alluvial/estaurine
clastics (possible secondary reservoir). Thin or shaledominated
over most of the PDA. Often capped by a coal
or paleosol.
Devonian: carbonate (non-reservoir). Unconformably
underlies the Lower Cretaceous clastic deposits.
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SAGD-able Pay Definition and
Range of Original Bitumen in Place (OBIP)
Example Well
V-Shale Porosity So
Core = pink dots Core=thick line
SHALE
Mdy-IHS
Sand
Sdy-IHS
Breccia
Core facies
Cont. SAGD (UPPER) Cont. Cont. Cont. Cont. Cont. Cont. SAGD (MIDDLE)
• OBIP values derived using the following cut-offs:
− Case A: Vsh =< 0.40, porosity =>27%; So =30%; So =

Structure Map – Top of SAGD-able Gross Pay
McMurray Formation
Case A Case B
White regions within the
PDA represent areas that
do not meet the minimum
pay criteria for this case
White regions within the
PDA represent areas that
do not meet the minimum
pay criteria for this case
16

Structure Map – Base of SAGD-able Gross Pay
McMurray Formation
Case A Case B
White regions within the
PDA represent areas that
do not meet the minimum
pay criteria for this case
White regions within the
PDA represent areas that
do not meet the minimum
pay criteria for this case
17

SAGD-able Gross Pay Thickness
McMurray Formation
Case A Case B
White regions within the
PDA represent areas that
do not meet the minimum
pay criteria for this case
White regions within the
PDA represent areas that
do not meet the minimum
pay criteria for this case
18

A
D
East-West Geological Cross-Sections
A’
D’
D
B
A
C
B’ C’
A’
D’
19

North South Geological Cross-Section
C
C’
D
B
A
C
C’
B’C’
A’
D’
20

SW
Southwest-Northeast 2D Seismic Cross-Section
03-28
15-28
McMurray (MCMR)
Paleozoic (DVNN)
07-33
10-33
16-33
01-04
NE
AB/08-04
21

B
Northwest-Southeast Geological Cross Section
B
A
D
C
B’
B’C’
A’
D’
B’
22

Northwest-Southeast 2D Seismic Cross-Section
NW SE
05-33
04-33
McMurray (MCMR)
Paleozoic (DVNN)
11-28
06-28
03-28
23

Cap Rock Integrity Tests
• Mini-frac and core data collected from cap
rock and reservoir on 3 wells (2010-11):
− 5-17-97-13W4
− 4-15-96-13W4
− 15-9-96-13W4
• Cap rock report submitted (June 2011)
− Report includes results from mini-frac tests
and initial MOP study.
− Data and analysis to date supports regional
trends showing sufficient cap rock for SAGD
• Additional cap rock testing (2012-13) to
confirm regional trends and to define cap
rock integrity for PDA planned at:
− 7-17-97-13W4
− 13-3-96-13W4
− 8-29-96-13W4
05-17-97-13W4
08-29-96-13W4
07-17-97-13W4
04-15-96-13W4
15-09-96-13W4
13-03-96-13W4
13-3-96-13W4
Legend
2010-11 wells
2011-13 wells
Development Area
Project Area
Lease Outline
24

2D and 3D Seismic Data
25

3D Seismic Acquisition Program
Winter 2011/12
• BP has acquired ~400 km 2D
seismic of varying vintage across
the Terre de Grace lease. Sparse
2D currently covers the project
development area (PDA)
• Acquisition of a 3D seismic survey
over a portion of the lease is
underway
− Activity has already commenced,
with completion expected in 2012.
This survey will cover the majority of
the PDA
2D Seismic
Proposed 3D
Seismic Survey
Area
Proposed
Development
Area (PDA)
10 km
26

Future Plans (Subsurface)
27

Future Plans (Subsurface)
• Update to cap rock integrity study
• Ongoing subsurface evaluation
− Confirm facies distribution and understanding of the Proposed Development Area
− Oil Sands Exploration (OSE) drilling and 3D seismic programs
− Exploration for water source and waste disposal
• Subsurface data will inform the decision making process for the TdG
development plan
28

Facilities
29

Preliminary Surface Facilities Layout
• 1,589 m 3 /d (10,000 bpd) pilot
project
• Current approval includes a test of
the ADC and USP
technologies with SAGD
processing and extraction of
bitumen
30

Surface Facilities Activities
• Ongoing engineering studies to support detailed engineering design
− Evaluation of process design
− Water treatment technology
− Water sources and uses
− Disposal wells and Landfill Waste
− Waste streams
− Energy efficiency
− Emissions
− Optimization of plot plan
− Identification of associated infrastructure
− Roads
− Borrow material
− Power transmission line
− Above and below ground pipelines
− Camp
31

Water Sources and Uses
32

Water Sources and Uses
• Water exploration program
underway
• Assessing area water aquifer
presence and capabilities
− Primary zones: Quaternary, Grand
Rapids, Basal McMurray, Devonian
− Secondary Zones: Second White
Specks, Viking
• Working with other operators on
industry wide water source and
disposal solutions
• Groundwater monitoring program
is being established
Primary Zones
Secondary Zones
33

Water Treatment Technology
34

Water Treatment Technology
• Evaluating performance of various water treatment technologies
− Warm lime softeners
− Hot lime softeners
− Evaporators
• Gaining a better understanding of implications of water source quality on
energy efficiency, emissions, and waste
35

Waste Disposal Wells and Landfill Waste
36

Disposal Wells and Landfill Waste
• Disposal well exploration ongoing
• Exploring linkages between water treatment and waste disposal (e.g., types
of water, recycle rates, disposal amounts)
• Investigating waste source and quantity, including solid wastes
• Evaluating requirement for an onsite landfill or use of a third party facility
37

Environmental Issues
38

Environmental Issues
• Actively pursuing reclamation of historic exploration well pads
− Reclamation activities have been completed at 205 out of 287 locations
− Ongoing inspections and remedial work as necessary
− Ongoing work to file applications for reclamation certificates for three of eight OSE
programs
− Reclamation of three remote sump locations
39

Compliance Statement
40

Compliance Statement
The TdG partnership is currently in compliance with conditions of
ERCB Scheme Approval Number 11393 for the TdG Pilot Project.
41

Future Plans (Surface)
42

Future Plans (Surface)
• Plans to incorporate information from ongoing resource evaluation activities
and environmental baseline studies to build development plans, including
the TdG Pilot Project and potential future commercial project
• Will seek operations permits and licenses as appropriate
• Continued meetings and updates with the Board throughout the project life
cycle
43

Contact Information
Trevor Hindmarch
BP Canada Energy Company
240 – 4 Avenue SW
PO Box 200
Calgary, Alberta T2P 2H8
Canada
Ph: 403-233-1133
E-mail: Trevor.Hindmarch@bp.com
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