What is Bitumen?
Bitumen is a sticky, viscous form of petroleum trapped in sand found in northern Alberta. It is processed to produce transportation fuels and other petroleum products. When used as a source for transportation fuels, bitumen
has a lower value than conventional crudes.
Where is Bitumen Produced?
Oil sands deposits are found around the world, including Venezuela, the United States and Russia, but the Athabasca deposit in Alberta is the largest, most developed and uses the most technologically advanced production processes. Commercial-scale production from Alberta’s oil sands started in 1967 when the Great Canadian Oil Sands (now Suncor Energy) started operation.
Canada’s oil sands are the largest deposit of crude oil on the planet. The oil sands (or tar sands as they are sometimes inaccurately referred to), are a mixture of sand, water, clay and a type of oil called bitumen. Thanks to innovation and technology we can recover oil from the oil sands, providing energy security for the future.
Canada’s oil sands are found in three regions within Alberta and Saskatchewan: Athabasca, Cold Lake and Peace River, which combined cover an area more than 142,000 square kilometres (km2). Contrary to some exaggerated reports, the current active mining footprint is about 1,030 km2 – an area slightly larger than the City of Calgary.
How Is Bitumen Produced?
A variety of oil recovery methods are currently used for oil sands production, and new methods are put in place as new technology is developed.
Oil recovery in the oil sands uses two main methods: mining or in situ, depending on how deep the oil sands deposits are.
Surface mining is used when oil sands deposits lie within 70 meters (200 feet) of the earth’s surface. Twenty per cent of oil sands reserves are close enough to the surface to be mined. Large shovels scoop oil sand into haul trucks that transport it to crushers where large clumps are broken down. The oil sand is then mixed with hot water and pumped by pipeline to a plant called an upgrader, where the bitumen (oil) is separated from the other components such as sand, clay and water.
Deeper bitumen must be recovered using in situ technology. “In situ” means “in place,” because bitumen is separated from the sand below ground, right in the deposit itself. This is accomplished by heating the bitumen so it becomes fluid enough that it can be pumped to the surface.
There are several ways to heat bitumen below ground. Both of the commonly used methods – SAGD and CSS – use large volumes of water and burn natural gas to create steam that is injected into the oil sands deposit. New research is leading to technologies that reduce or eliminate the need for water and natural gas.
Bitumen Environmental Impact?
The environmental, social and governance (ESG) performance of the oil sands industry has improved over recent decades to become one of the best oil producers in the world (Dziuba et al., 2021). GHG emission intensity in oil sands production decreased by 20 per cent between 2009 and 2018 (IHS Markit, 2018) and the emissions intensity from some large oil sands assets is comparable to the average U.S. barrel of oil (Sleep et al., 2020).
However, the growth of the oil sands industry has been outpacing the rate of decrease in GHG emission intensity, and so absolute GHG emissions in oil sands production have been increasing. The total GHG emissions from oil sands extraction was 83 million tonnes in 2019, representing 11 per cent of Canada’s overall GHG emissions (Environment and Climate Change Canada, 2021).
Who are Canada’s Bitumen Producers?
SYNCRUDE CANADA LTD.
Syncrude Canada Ltd. is one of the world’s largest producers of synthetic crude oil from oil sands and the largest single source producer in Canada. Based in Fort McMurray, Alberta, and with a large research and development facility in Edmonton, Syncrude is known for pioneering many of the processes used in the industry, including an expanding suite of technologies to improve environmental and economic performance.
Our project is located near Fort McMurray, about 440 kilometres northeast of Edmonton, Alberta, on the Athabasca Oil Sands Deposit. Our Mildred Lake facility is 40 kilometres north of Fort McMurray, with our Aurora project located an additional 35 kilometres north of Mildred Lake.
The Syncrude Project is a Joint Venture undertaking among Suncor Energy Inc., Imperial Oil Resources Limited; Sinopec Oil Sands Partnership; and CNOOC Oil Sands Canada. Suncor’s interest is held by Canadian Oil Sands Partnership #1 and Suncor Energy Ventures Partnership, both wholly owned affiliates of Suncor Energy Inc., as the project owners (the “Owners”). Suncor Energy (Syncrude) Operating Inc. is the project operator.
CANADIAN NATURAL RESOURCES LIMITED
Canadian Natural Resources has exploited Canada’s resources to become one of the country’s largest natural gas producers. The company has large oil holdings (light, medium, and heavy crude assets) in British Columbia and Alberta, as well as in Saskatchewan. It also has holdings in the North Sea and offshore West Africa. In addition, the company has major interests in oil sands production in Canada. In 2010 Canadian Natural Resources reported proved reserves of 3.8 billion barrels of oil, bitumen, and natural gas liquids, (including 1.9 billion barrels of synthetic crude oil), and 4.3 trillion cu. ft. of natural gas, and produced an average of 632,000 barrels of oil equivalent per day.
Canadian Natural’s primary heavy crude oil operations are centered on the Alberta – Saskatchewan border, near the city of Lloydminster. The Company’s extensive and dominant land base allows us to conduct large scale drilling and development programs while minimizing our capital cost requirements. Costs are further managed through owning and operating centralized treating and sand handling facilities, maximizing their utilization and using our size to achieve economies of scale. Our infrastructure includes fifteen crude oil processing facilities and eight salt caverns for solids disposal. 100% ownership of the ECHO sales pipeline allows us to deliver undiluted heavy crude oil into our blending facilities at Hardisty, Alberta.
Canadian Natural holds some of the best thermal in situ oil sands assets in Canada, providing tremendous value and growth potential. Our thermal assets are located in two of the major oil sands deposits in Western Canada – the Athabasca and the Cold Lake deposits. Canadian Natural’s oil sands deposits are in the form of bitumen, which in its natural state is too viscous to flow. When bitumen is too deep (>80 m) to economically mine, steam is injected to warm the bitumen, reducing the viscosity and allowing it to be pumped through surface wells. Only about 7% of Canada’s oil sands can be mined; the majority has to be recovered using thermal in situ recovery.
Primrose and Wolf Lake (PAW) Project. The PAW Project consists of thermal in situ oil sands developments which include the Wolf Lake CPF and field production facilities (Townships 65 and 66, Ranges 5 and 6, W4M); the Primrose South and North Steam areas (Townships 67 and 68, Ranges 4 and 5, W4M, which includes the Primrose South and North steam plants and field production facilities) and the Primrose East area (Townships 67 and 68, Ranges 2 and 3, W4M), which includes the Primrose East steam plant, the Burnt Lake Pilot Plant and field production facilities (all located entirely within the Cold Lake Air Weapons Range).
Clearwater formation at Canadian Natural’s Wolf Lake and Primrose (North, South, and East) fields. In the Cold Lake deposits, our Primrose operations currently produce from the Clearwater reservoir using the cyclic steam stimulation (CSS) process. CSS uses a single well bore to inject and produce steam. This technology has been historically applied to reservoirs that have barriers to vertical flow. The production peaks and troughs at Primrose are a reflection of the cyclic steam process – the peaks are associated with production cycles from newer, less mature wells and the troughs are associated with production cycles from the more mature areas in the field.
SUNCOR ENERGY INC.
Suncor Energy Inc. (Suncor) is an integrated energy company. The Company explores for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally, and it transports and refines crude oil and market petroleum and petrochemical products primarily in Canada. It focused on developing petroleum resource basins, such as Canada’s Athabasca oil sands.
Base Mine – open pit mining operation supplying oil sands Base Plant facilities. The expected to produce up to 225,000 barrels per day of bitumen froth during its estimated 25-year operational life.
Firebag is Suncor’s largest in situ operations and one of the largest in the world located 120 km northeast of Fort McMurray, Alta.
Base Plant (Millennium & North Steepbank) – Suncor’s Oil Sands Base operations include the Millennium and Steepbank (including North Steepbank Extension) open pit mining and extraction operations, two integrated upgrading facilities (Upgrader 1 and 2) , and the associated infrastructure – utilities, energy and reclamation facilities such as Tailings Reduction Operations (TRO) assets.
Fort Hills is an open-pit truck and shovel mine. Mine life is expected to be in excess of 50 years based on current mine plans.
Suncor’s MacKay River oil sands development, 60 km (37 miles) west of Fort McMurray,
CONOCOPHILLIPS CANADA RESOURCES CORP.
ConocoPhillips is an international, integrated energy company. It has six segments. Its E&P segment explores for, produces, transports and markets crude oil, natural gas, natural gas liquids and bitumen on a worldwide basis.
Surmont is a SAGD bitumen recovery facility that is operated by ConocoPhillips under a 50/50 joint venture agreement with Total E&P Canada. That means we co-own the development, but the facility itself is staffed and run by ConocoPhillips Canada employees and contractors.
Commercial production from Surmont 1 began in 2007. In 2010, ConocoPhillips commenced construction of Surmont 2, and achieved first production in the third quarter of 2015. Net production at Surmont more than doubled in 2016. ConocoPhillips is focusing on structurally lowering costs and reducing greenhouse gas intensity while ramping up production. Current gross production capacity is 140 MBOED, and there is potential for debottlenecking projects to increase capacity. In addition, opportunity exists for future expansion. Over the life of this multidecade project, Surmont will provide many social and economic benefits to the area.
Cenovus Energy Inc. is a Canadian integrated oil and natural gas company. It is committed to maximizing value by sustainably developing its assets in a safe, innovative and cost-efficient manner, integrating environmental, social and governance considerations into its business plans.
Operations include oil sands projects in northern Alberta, which use specialized methods to drill and pump the oil to the surface, and established natural gas and oil production in Alberta and British Columbia. The company also has 50% ownership in two U.S. refineries. Cenovus shares trade under the symbol CVE, and are listed on the Toronto and New York stock exchanges.
We have four producing oil sands projects — Christina Lake, Foster Creek, Sunrise and Tucker – as well as regulatory approval for future oil sands development projects, including our 100 percent-owned Narrows Lake and Telephone Lake assets.
Our 100 percent-owned Christina Lake project is one of our four operating oil sands projects and is located approximately 120 kilometres southeast of Fort McMurray. The oil at Christina Lake is about 375 metres underground.
Construction of our pilot project at Christina Lake began in 2000 and first production occurred two years later.
Today, Christina Lake is one of the most efficient SAGD facilities in the industry. It has a low steam to oil ratio (SOR), which means it uses less water and natural gas and creates fewer greenhouse gas emissions to produce a barrel of oil than other oil sands facilities of the same size. In 2019, the project had an average SOR of 2.0 This means we used approximately two barrels of steam to produce one barrel of oil.
Our 100 percent-owned Foster Creek asset is one of our four producing oil sands projects in northeastern Alberta. It is located about 330 kilometres northeast of Edmonton, on the Cold Lake Air Weapons Range — an active Canadian military base. The oil at Foster Creek sits about 450 metres below the surface.
Foster Creek began as a pilot project in 1997 and in 2001 became the first commercial oil sands project to use SAGD technology.
The Sunrise project is 50 percent-owned with BP Canada, operated by Cenovus, and is one of our four oil sands projects in northeastern Alberta. Sunrise is about 60 kilometres northeast of Fort McMurray, Alberta. The reservoir at Sunrise sits about 200 metres below the surface.
CNOOC PETROLEUM NORTH AMERICA ULC
CNOOC International has oil sands and shale gas assets in Canada. Our oil sands business is a key part of CNOOC International’s global portfolio. Our Long Lake facility, located in northern Alberta just south of Fort McMurray, is a SAGD operation with production capacity of 72,000 barrels of bitumen a day.
CNOOC International’s Long Lake facility, located in northern Alberta just south of Fort McMurray, began producing in 2008 and is a SAGD-only operation for the interim, with production capacity at around 72,000 boe/d.
Strathcona is a Calgary-based private, oil-weighted company focused on the exploration, development and production of oil and gas resources in Western Canada. Strathcona is 100% owned by its private-equity sponsor, Waterous Energy Fund, and Strathcona employees.
Focused on thermal oil, enhanced oil recovery and condensate-rich Montney, our operations are located in the Cold Lake oil sands region of Alberta, the heavy oil region of SW Saskatchewan, and the Montney basin spanning west central Alberta and NE British Columbia. Current production at these operations totals 75,000–80,000 barrels of oil equivalent per day, weighted 75% to liquids and an industry-leading Proven Reserve Life Index given the long-life nature of our assets.
Our 100 percent-owned Tucker asset is one of our four oil sands projects in northeastern Alberta and achieved first oil in 2006. Tucker is about 30 kilometres northwest of Cold Lake, Alberta. The reservoir at Tucker sits about 450 metres below the surface.
PetroChina Canada’s Oilsands assets are connected to the Grand Rapids Pipeline System which moves our diluted bitumen
to Edmonton for market and beyond and include MacKay River Oilsands and Dover Oilsands
CONNACHER OIL AND GAS LIMITED
Connacher Oil and Gas Limited (Connacher) is a Canada-based company. The Company is an oil and natural gas exploration, development, production and refining company. The Company owns and operates the Montana Refinery. The Company owns 24% in Petrolifera Petroleum Limited, which has producing or exploratory interests in Argentina, Peru and Colombia. The Company’s principal asset is a 100% interest in approximately 98,000 acres of oil sands leases in the Great Divide and Halfway Creek regions near Fort McMurray, Alberta.
Obsidian Energy Ltd. (TSX: OBE) (NYSE: OBE) is an intermediate-sized oil and gas producer with a well-balanced portfolio of high-quality assets producing roughly 30,000 boe per day. These assets, and the organization we have crafted around them, provide the right platform to deliver bottom-line results, and an entrepreneurial spirit that will allow us to succeed in this evolving industry.
Peace River is a stable, heavy cold-flow, base production asset. Obsidian Energy operates a contiguous and extensive acreage, containing large resource in place, within the heart of the Peace River Oilsands region.
BAYTEX ENERGY LTD.
Baytex Energy Corp. is an oil and gas corporation based in Calgary, Alberta. The company is engaged in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. Approximately 83% of Baytex’s production is weighted toward crude oil and natural gas liquids. Baytex’s common shares are traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE.
Peace River Baytex entered the Peace River area in 1999, and has grown production from zero to current rates
Heavy oil asset, developed primarily via cold-flow horizontal multi-lateral wells targeting the Bluesky formation.
Baytex has been producing in the Lloydminster area since 1993 Low cost, long-life conventional heavy oil development from the Mannville group of formations, extracted using a combination of vertical and horizontal drilling, waterflooding, SAGD and, more recently, polymer flooding
SUNSHINE OILSANDS LTD.
Sunshine Oilsands Ltd. is a Calgary based publicly listed company on the Hong Kong Stock Exchange (Stock Code 2012) focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. The company owns and controls 100% of 467,969 hectares of oil sands leases (including our Oil Sands Leases and our PNG Licenses) (approximately 1,150,000 acres of oil sands leases), equivalent to approximately 7% of the total Oil Sands Leases granted in the Athabasca region.
GEAR ENERGY LTD.
Gear Energy Ltd is engaged in the business of acquiring, developing, and holding interests in petroleum and natural gas properties and assets. Its oil-focused operations are located in three core areas; Lloydminster Heavy Oil, Central Alberta Light/Medium Oil, and Southeast Saskatchewan Light Oil.