In-situ Development of Oil Sands
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In-situ Development of Oil Sands

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Ports-to-Plains Energy Summit...

Ports-to-Plains Energy Summit
Omni Interlocken Resort
Broomfield, CO
April 7, 2011
Alberta, the northern anchor of the Ports-to-Plains Corridor, is the number one supplier of foreign oil to the United States, and the oil sands are a key part of that resource. Learn about the issues affecting this resource that powers North America and our region’s economy.

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In-situ Development of Oil Sands Presentation Transcript

  • 1. North Americaand Canada’s Oil Sands Ports-to-Plains Energy Summit Dan Ouimet, Director Government Affairs ConocoPhillips Canada April 7, 2011 Slide 1
  • 2. CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995The following presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. You can identify ourforward-looking statements by words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions.Forward-looking statements relating to ConocoPhillips’ operations are based on management’s expectations, estimates and projections aboutConocoPhillips and the petroleum industry in general on the date these presentations were given. These statements are not guarantees of futureperformance and involve certain risks, uncertainties and assumptions that are difficult to predict. Further, certain forward-looking statements are basedupon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what isexpressed or forecast in such forward-looking statements.Factors that could cause actual results or events to differ materially include, but are not limited to, crude oil and natural gas prices; refining and marketingmargins; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gasdevelopment projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to undergroundaccumulations of oil and gas; unsuccessful exploratory drilling activities; lack of exploration success; potential disruption or unexpected technicaldifficulties in developing new products and manufacturing processes; potential failure of new products to achieve acceptance in the market; unexpectedcost increases or technical difficulties in constructing or modifying company manufacturing or refining facilities; unexpected difficulties in manufacturing,transporting or refining synthetic crude oil; international monetary conditions and exchange controls; potential liability for remedial actions under existingor future environmental regulations; potential liability resulting from pending or future litigation; general domestic and international economic and politicalconditions, as well as changes in tax and other laws applicable to ConocoPhillips’ business; limited access to capital or significantly higher cost of capitalrelated to illiquidity or uncertainty in the domestic or international financial markets. Other factors that could cause actual results to differ materially fromthose described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting ConocoPhillips’business generally as set forth in ConocoPhillips’ filings with the Securities and Exchange Commission (SEC), including our Form 10-K for the yearending December 31, 2008. ConocoPhillips is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-lookingstatements, whether as a result of new information, future events or otherwise.Cautionary Note to U.S. Investors – The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, todisclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legallyproducible under existing economic and operating conditions. We may use certain terms in this presentation such as “oil/gas resources,” “Syncrude,”and/or “Society of Petroleum Engineers (SPE) proved reserves” that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S.investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2008. Slide 2
  • 3. Today’s Presentation• Safety Moment• The Context• About the Oil Sands• COP’s Position• The Surmont Project• Oil Sands Technology• The Transportation Corridor• A Secure Energy Future Slide 3
  • 4. Safety Moment – Transportation Safety• Traffic safety is large focus in Ft McMurray Area• Coalition for a Safer 63 & 881 launched in April 2010• Now has 16 members cross-industry Slide 4
  • 5. Global Energy Demand Forecast 400 50% Growth 350 les 300 ewab Ren clear Nu 250MMBOED Coal 200 150 Natural Gas 100 50 Liquids 0 1965 1975 1985 1995 2005 2015 2025 2035 Fossil fuels projected to meet 80% of energy demand in 2035  Source:  U.S. Department of Energy, International Energy Outlook & BP Statistical Review. Slide 5
  • 6. Global Crude Oil Reserves by Country ls re ar b s World Oil 300 li on r v e Reserves Accessible 264 0 b il re s e Oil Reserves s 17 nds 250 de il sa cl u o I n of State owned or controlled Canada’s Oil Sands 53% 200 175billion barrels Accessible Other 136 Other Other Other 47% 150 Accessible Accessible Accessible Accessible Reserves Reserves 115 Reserves Reserves 102 99 92 100 60 44 36 50 30 21 0 Saudi Arabia Canada Iran Iraq Kuwait Venezuela Abu Dhabi Russia Libya Nigeria Kazhakhstan United States Source: Oil & Gas Journal Dec. 2008 Slide 6
  • 7. Significant Source of US Supply Slide 7
  • 8. Western Canada Oil Production Slide 8
  • 9. The Opportunity Oil Sands Extraction Options• There are 1.7 trillion barrels of oil in the Canadian Oil Sands• Only 20% can be mined – the rest (1.4 trillion barrels) is too deep Slide 9
  • 10. The Opportunity • Only 20% can be mined – the rest, 1.7 trillion barrels, is too ‫٭‬Ft McMurray deep • Extraction methods: –Open Pit –In-Situ Slide 10
  • 11. The Opportunity Kearl Fort Hills Lake Horizon Northern Lights Joslyn Creek Muskeg River Syncrude Albian Dover Firebag Peace River Suncor Jackpine MacKay River Fort Seal McMurray Surmont Peace River Hangingstone Christina Lake Long Lake (ECA) White Sands Jackfish Cold Lake Foster Hilda Lake Creek Wolf Lake/Primrose Cold Lake In Situ Projects Tucker Lake Mining Projects Slide 11
  • 12. The Land and Boreal Forest Slide 12
  • 13. The Challenge: Viscosity 10,000,000 Bitumen at virgin reservoir conditions 1,000,000 Peanut Butter 100,000 KetchupViscosity (cP) 10,000 Maple Syrup 1,000 100 Olive Oil Bitumen under SAGD 10 Cream Water Typical oil in the ground 1 0 50 100 150 200 250 Temperature (deg C) Slide 13
  • 14. SAGD In-Situ Process • Minimal surface footprint from well pads. • Two horizontal wells. • Top well injects steam into the reservoir, heating up the bitumen - reducing viscosity. • Heated bitumen flows back to surface through bottom well. • High water recycle rate from steam production. Slide 14
  • 15. ConocoPhillips Canada Slide 15
  • 16. ConocoPhillips Oil Sands Interests • Leading land position in the oil sands • >1 million net acres • Producing 63,000 bbls/day • Focused on in-situ development Slide 16
  • 17. Asset Overview: Surmont • 50/50 joint venture with TOTAL E&P Canada • SAGD recovery process • Phase 1 first steam June 2007, Currently producing 23,000 bbls/day • Phase 2 multi-billion dollar mega- project under construction • Combined Phase 1&2 plateau of 110,000 bbls/day production • Future phases could bring peak production to 400,000 bbls/day Slide 17
  • 18. Surmont Phase 2 Update• Clearing and grubbing completed in 2010.• In 2011, we will: • Finish the first phase of the 1,000 bed construction camp • Complete the majority of the piling and foundation work • Install our first pipe rack module• First production for Phase 2 is currently slated for 2015. For illustration purposes only Slide 18
  • 19. Oil Sands Technology Greenhouse Gas Production • Water by Oil Sands Segment •Use less water •Recycle more water Transportation •Use higher salinity water • Land Refining •Disturb less land •Use land more efficientlyProduction •Reclaim land End User • GHGs Emissions •Less steam/bbl of oil •Fewer GHGs/bbl of steam •Facilitate CCS Data source: CERA, 2009 Slide 19
  • 20. Oil Sands Leadership Initiative (OSLI)Five like-minded companies working together to create a step-change in performance in these key areas: Technology Breakthrough Water Management Land Stewardship Sustainable CommunitiesVision: Achieving world-class environmental, social and economicperformance in developing this world-scale oil sands resource.2011 Budget: $23.4 million Slide 20
  • 21. Technology Example - VIT• Vacuumed insulated tubing (VIT): – Consists of concentric inner and outer standard oil field tubing welded at each end – A vacuum is applied to the annular space – Further insulated with a covering• Benefits: – Heat retention in SAGD operations, resulting in reduced steam-oil ratio (SOR) – Lower SOR means less natural gas burned and less water used• Currently being piloted at Surmont Slide 21
  • 22. Transportation Corridors Slide 22
  • 23. Canada’s Oil Sands & Economic Impact on USNational Impacts 2010 2015 2020 2025 U.S. Gross Domestic Product 11.5 34.0 40.4 42.2 ($US Billions)National Impacts 2009- 2011- 2016- 2021- 2010 2015 2020 2025U.S Employment (Thousand 172 343 88 22 Person Years) Source: CERI Study, Oct 2009 Slide 23
  • 24. A Secure Energy Future• Oil sands part of the North American energy mix and can be developed sustainably.• A conducive policy environment will lead to Opportunities for all of North America.• Investing in technology to minimize the impacts associated with development.• Opportunities for energy security that include transportation. Slide 24
  • 25. North Americaand Canada’s Oil SandsPorts-to-Plains Energy Summit Dan Ouimet,Director, Government Relations ConocoPhillips Canada April 9, 2010 Slide 25