<DrumBeat: July 30, 2008 The Oil Drum Mainstream Dutch analysts foresee oil supply constrained world>

42 comments on When CHOPS are not a dinner menu, but for heavy oil production

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Nate Hagens on July 30, 2008 - 12:40pm Permalink | Subthread | Parent | Comments top

The lifting costs of heavy oil production have dropped 70 percent since 1991, to just under one dollar per barrel today.

Is this a red herring? $1 to lift but what are the other costs? It is clearly not $1 all in - if so this has to have a huge EROI. What are the initial capital costs requirements, employee costs, overhead, etc? Perhaps this heavy oil is very near the surface so technically the joules required to lift it ARE very small.

Is Venezuela just lacking expertise and infrastructure? Something doesn't sound right in that quote - it's like a dieter saying all he ate for dinner was a cracker but he had a smoked duck and a tray of brownies for lunch.

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ROCKMAN on July 30, 2008 - 2:12pm Permalink | Subthread | Parent | Comments top

Nate,

To a large degree lifting cost per bbl is more a function of how much oil your producing then the total cost. There is usually a big fixed cost load whether it's 10 bopd or 500 bopd. I assume the $1/bbl LC is for the high volume wells they refer to. If there's no natural gas available (and commonly not with these types of reservoirs) lifting is done via diesel motors....not very cheap these days.

There's also a wide range of quality in "heavy oils". A lot of what comes out of Vz is called Orinoco CRUD…and for good reason. They usually have to mix it with water in order to just pump it. There are refiners in the Gulf Coast set up to handle it. It has the lowest value of any liquid hydrocarbon I know of. But there are better grade heavy oils in Vz but I have no idea of the percentages.

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Prof. Goose on July 30, 2008 - 2:15pm Permalink | Subthread | Parent | Comments top

As with many things in life, it's all about the size of the denominator. :)

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waterpump on July 30, 2008 - 8:17pm Permalink | Subthread | Parent | Comments top

Isn't the heavy oil in Venezuela more profitable than the tar sands in Canada? And of slightly better quality as well?

So what are the Venezuelan government doing? Aren't there any plans to scale up as much as possible? And what production level might be possible in the next 10-15 years if going full-steam ahead with extracting?

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42 comments on When CHOPS are not a dinner menu, but for heavy oil production

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