KBR Buys into BP's VCC Technology
created: 29 Jan 2010 08:03
tags: bottom-of-barrel bp kbr vcc
This news is from about a week ago, but I found it interesting on a number of levels.
KBR announced today that it has signed a Collaboration Agreement with BP to promote, market, and execute licensing and engineering services for the slurry bed residue and coal upgrading Veba Combi Cracker (VCC) Technology.
The first reason why I find it interesting is that this is a technology without a real track record, yet KBR thinks it worth investing in.
Until now there has only been one VCC plant in the world. It was subsequently shut down in 2000 due to unfavourable economic conditions.
There is another reason why it sound interesting.
VCC Technology is a hydrogen addition technology suitable for processing residuum into high-quality distillates or synthetic crude oil in the refining, upstream field upgrading and coal-to-liquids
It seems to be able to handle a huge range of feedstocks, which is not the case for the most popular deep cracking technology, coking.
Another advantage is the conversion rate. With the addition of hydrogen, the yield can exceed 100% of the feed, and there is no low value coke.
Given the increasing importance of heavy oils and perhaps coal as a feedstock, I am sure that KBR sees this first and foremost as an upstream upgrading technology. However, if proven there is big potential in refining as well, where the maximisation of high value products is paramount, and where petrocoke may one day be very difficult to dispose of.
Update: For more details see veba-combi-cracking-vcc
ENI and PDVSA Joint Venture
created: 27 Jan 2010 07:28
tags: eni heavy oil orinoco pdvsa venezuela
My last post was on the potential of Venezuela's heavy oil reserves. As if by magic, almost immediately we have news of a major new development. ENI and PDVSA are to form a Joint Venture to exploit a major heavy oil field.
Under the terms of the agreement, which will be finalized in the next 60 days and submitted to the relevant approvals, PDVSA will hold 60% and Eni 40% of a joint venture company (Empresa Mixta ) to develop the Junin 5 field which has 35 billion barrels of certified oil in place.
Despite the blusterings of Venezuela's Caudillo, the country needs the knowhow of foriegners in order to exploit these reserves. This is made explicit in this deal.
The Technology Agreement will also provide PDVSA access to Eni’s gas shale experience in the US Barnett basin.
It is this knowledge that opens the door for ENI in this very difficult market. It is intellectual capital that will drive oil company profits in the future, including lots of knowledge that is not actually patentable, and resides in the grey matter of the operational staff. As such, the market has changed from one where access to reserves is the key, and this has major consequences for everyone in the business.
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Orinoco Reserves Could be the Worlds Largest
created: 25 Jan 2010 09:23
tags: heavy oil orinoco reserves venezuela
In a move likely to cause sleepless nights in Caracus, The U.S. Geological Survey has reassessed the size of recoverable reserves in Venezuela's Orinoco Belt, and pronounced them much bigger than before.
The U.S. Geological Survey estimated a mean volume of 513 billion barrels of technically recoverable heavy oil in the Orinoco Oil Belt Assessment Unit of the East Venezuela Basin Province; the range is 380 to 652 billion barrels. The Orinoco Oil Belt Assessment Unit thus contains one of the largest recoverable oil accumulations in the world.
The reserves have not been exploited, originally due to their uneconomic nature. High oil prices combined with improving technology have changed the landscape however, and Venezuela is trying to put them back in play.
Heavy oil technology has developed massively in recent years.
Recovery factor, or that percentage of the OOIP that is determined to be technically recoverable, was estimated from what is currently known of the technology for recovery of heavy oil in the Orinoco Oil Belt AU and in other areas, particularly California, west Texas, and western Canada.
As the recovery factor has gone up, so therefore have the size of the reserves.
The maximum recovery factor was estimated to be 70 percent, on the assumption that other recovery processes, in addition to horizontal drilling and steam-assisted gravity drainage, might eventually be applied on a large scale.
Once again, as if we needed reminding, reserves depend on technology as well as geology.
It is also a reminder that our future energy requirements depend on ever more difficult to recover crude. In such a market, technology leadership is where the money is. Its not what you have but what you can do with it that matters.
