Nexen uses steam to increase oil sands production at Long Lake

With the completion of the turnaround at Long Lake at the Athabasca oil sands in northeast Alberta, Canada, steam reliability has improved significantly and steam rates are at an all time high of over 105,000 bbls/d and increasing, reports Nexen Inc. As a result, we are employing more oil sands technologies by injecting more steam into more wells than ever before with 57 well pairs now on production and steam circulating in an additional 19 pairs. These circulating wells will be converted to production over the next few months. 

The reservoir is responding to consistent steaming and bitumen production levels are increasing. Prior to the turnaround, which was completed late last year, we were only providing meaningful steam to about one third of our 91 wells. These wells are providing the majority of our bitumen production which averaged 13,600 bbls/d (gross) in the fourth quarter. The remaining wells have been cold for about a year and need to go through the circulation and ramp up cycle. 

We are currently producing approximately 18,000 bbls/d (gross) at an all-in steam-to-oil ratio (SOR) of approximately 6.0. This SOR includes steam to the wells that are in the steam circulation stage and not yet producing bitumen, and wells early in their ramp up cycle. As our circulating wells start producing, we expect to see an increase in bitumen production rates with a corresponding decrease in SOR. The SOR of our producing wells is approximately 5.0, and includes well pairs recently converted to production that are in the early stages of ramp up. We continue to expect a long term SOR of 3.0 over the life of the project. 

"Post turnaround, we have experienced our three best consecutive months of steaming and bitumen production, and we are building on this," said Marvin Romanow, Nexen's President and Chief Executive Officer. "Now that we are in a position to provide consistent steam to the reservoir, we are focusing on optimizing steam injection and individual well performance. To advance well productivity, we have converted about 40% of our wells from gas lift to electric submersible pumping and expect to have about 80% converted by year end. This offers more flexibility to optimize steam injection and grow bitumen production." 

We have achieved a number of major milestones at Long Lake over the past year. The facility is running as designed. The gasification process is working, creating a low cost fuel source which reduces our need to purchase natural gas for operations. Post turnaround, the upgrader has processed approximately 90% of bitumen feedstock into the highest quality synthetic crude oil in North America. We continue to expect that we will ramp up to full rates and generate a significant margin advantage over our peers, even at current gas prices.



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