A realistic and integrated model for evaluating oil sands development with Steam Assisted Gravity Drainage technology in Canada

Oil sands resource is the third largest oil reserve, and 70% of the oil sands are in Canada. The emerging of Steam Assisted Gravity Drainage technology has made the commercial development of oil sands economically feasible. However, with the recent oil price crash, the development of oil sands has faced an uphill battle. A realistic and integrated evaluation model is highly needed to overcome difficulties from the low oil price and provide meaningful and valuable information for operators as well as investors to make the right decision. The existing evaluation models have considerable limitations (i.e., the incapability of evaluating integrated oil sands development with Steam Assisted Gravity Drainage technology, the lack of investigation into the input parameters with historical data, and ignoring the effect of the subsurface reservoir, etc.). This study developed an integrated evaluation model through the analyses of a significant amount of actual historical data. This integrated model includes six subcomponent models, ranging from the subsurface reservoir to infield flowline. Data from 35 Canadian oil sands development with 15 internal and external parameters were collected and investigated. The oil price effect was analyzed and quantified through simulations. The breakeven Western Canada Select oil price of $39/bbl. (equal to the West Texas Intermediate oil price of $55/bbl.) and other key price points and distributions were identified. Also, the top seven geological and technical parameters that contribute 86% of the net present value variations were identified and investigated. These quantified effects of external and internal parameters are useful findings for decision making. Considering various price scenarios and uncertainties of the input parameters, this study has concluded that developing oil sands resources with the Steam Assisted Gravity Drainage technology is economically feasible and socially beneficial after we take all stakeholder interests into consideration, which is true even with the sustainable and realistic oil price in the foreseeable future.