The
business of recovering hydrocarbons requires an understanding of the
hydrocarbon industry and its technical, economic, environmental and political
components. The basis of the Company’s
application of technologies and business forecasts require the detailed
understanding of the hydrocarbon industry.
Hydrocarbon
is defined as any of a class of organic compounds composed only of carbon
and hydrogen.
The carbon atoms form the framework, and the hydrogen atoms attach to them.
Hydrocarbons, the principal constituents of petroleum
and natural gas,
serve as fuels, lubricants, and raw materials for production of plastics,
fibers, rubbers, solvents, explosives, and industrial chemicals. Complete combustion of
hydrocarbons will produce carbon dioxide and water assuming adequate amounts of oxygen. Combustion of hydrocarbons in an environment without adequate oxygen quantity produces a combination of water, carbon dioxide and carbon
monoxide.[1]
The
hydrocarbon industry is in the business of recovering and processing these
naturally occurring hydrocarbon deposits of organic molecules that, over the
course of geologic time, have transformed and moved into collections (commonly
called reservoirs) of oil and natural gas that are trapped by a geologic
feature preventing their migration to the surface. The hydrocarbon industry is involved with
understanding the source of the hydrocarbons, the reservoir within which they
are sealed or trapped, the timing of the deposition, the thermal history and
the migration of the hydrocarbons from their origin or source.
Underground
Energy’s niche in the hydrocarbon industry is the recovery of stranded
hydrocarbons with an environmentally sensitive and economic approach.
[1] Britannica
Concise Encyclopedia
Stranded hydrocarbon resources
There are numerous government and industry reports defining the world’s petroleum
resources and reserves. The rapid
depletion rate of conventional proven oil reserves has generated a substantial
effort to identify and evaluate recovery of unconventional and unrecoverable
reserves. This effort has documented
vast world oil reserves which will require alternative means and methods to
recover the “unconventional or unrecoverable” oil. The US Department of Energy has defined
stranded oil as immobile or residual left behind in existing US fields
constituting 374 billion barrels of oil in place.[2] Additionally, the USGS has identified 190
billion barrels of oil in existing fields as “undiscovered”.
The term “stranded oil” constitutes a range of oil resources
including:
Non-recovered or left behind oil in
producing fields – Primary recovery,
using only the natural pressure of reservoirs, typically recovers up to 19% of
the original oil in place (OOIP) on the average.
Secondary recovery, involving water injection to create pressure to
displace oil, typically recovers an average of 32% of the remaining oil in
place (32% of 81% Remaining =26%OOIP) Tertiary recovery includes
methods to change oil viscosities, change interfacial tensions, and change oil
and water saturations using thermal, miscible, chemical or microbial techniques
with typical recoveries averaging 13% of the remaining oil in place. The remaining oil is approximately 48% on average
of the original oil in place after application of all oil recovery methods. (19% primary + 26% secondary + 7%
tertiary = 52% total recovery.)
Immobile oil – Oil contained in a reservoir without
drive pressure or that has characteristics which prevent the oil from moving towards
a producing well. These can include
shallow deposits where added drive pressure simply pushes through to the
surface without moving the oil.
Geologic features including clay and shale lenses, structural faults
and other features can make the oil immobile.
Oil within non-permeable deposits is considered immobile, including
large deposits of diatomite containing high oil saturation. Ultra-heavy oils, including bitumen in tar sands, are immobile without the addition of significant amounts of heat to reduce the
viscosity of the oil.
Non-accessible oil – Deposits which are
discovered but cannot be recovered with conventional technology due to a
variety of conditions including geologic or surface features, political or
environmental permitting restrictions, or economic inviability. These deposits include off-shore oil reserves
with drilling moratoriums, ordeposits located beneath protected surface features that prevent their recovery by conventional means.
Unconventional
oil includes oil in various forms which cannot be recovered by conventional oil
recovery methods. These resources
include vast amounts of oil shale deposits containing kerogen and the extensive heavy and
ultra-heavy oils (tar sands) which require alternative means including mining
or steam injection to recover and upgrade the oil to a marketable crude oil
product. The US Department of Energy
estimates that the US has 80 billion barrels of stranded heavy oil and 60
billion barrels of ultra-heavy oil in tar sands. Ultra-heavy oils have an API gravity of 10°
or less.
[2]
US Department of Energy, Office of Fossil Energy – Office of Oil and Natural
Gas – 2006
Successful recovery through innovative technology
Underground Energy intends to become a profitable energy producing company by obtaining ownership of stranded, previously non-recoverable, or abandoned hydrocarbon resources at discounted prices and applying innovative technologies including underground construction and enhanced oil recovery (EOR) techniques to exploit the hydrocarbons. Another advantage of this technology is the ability to minimize environmental impacts using innovative underground facilities. With extensive company experience and technical expertise, Underground Energy plans to develop highly profitable projects through high percentage resource recovery and reduced operating costs.
