Risk Analysis Of Tarsands Exploitation Projects in Trinidad
Authors: Maharaj Utam S. 
Published: December 2007

Trinidad contains an estimated two (2) billion barrels of tarsands in shallow deposits in its Southern Basin. For exploitation of this resource, current technology dictates a surface mining extraction type project, where the favored extraction process is either thermal or solvent based.

In this paper we present the financial analysis of both project types, incorporating risk via Monte Carlo Simulation. The results of these analyses indicated that the solvent extraction process with a 10% royalty applied had a 53% chance of success while the thermal extraction process had a 9.3 % chance of success.

Introduction

Crude oil production in Trinidad began in the early 1900's and peaked at 230,000 barrels per day (BPD) in 1978 after which it began declining steadily at about 4% annually to its current level of 130,000 BPD. Fig. 1 shows the annual production of crude oil up to the present. Reserves of crude oil have also-been steadily declining at equivalent rates as shown in Fig. 2. Recent efforts in exploring deeper horizons (Cretaceous) within Trinidad's southern basin have been predicted to make up for this decline in production. To date, these efforts have not been successful, but is continuing.

Figs. 1 and 2 also show the production and reserve profiles for natural gas in Trinidad, expressed as barrels of oil equivalent (BOE). Production of natural gas peaked in 1989 but has since started declining with a decline in reserves since 1982 to present. Current production of natural gas stands at 683 MSCF per day or 118 MBOE per day. With the development of new ammonia and methanol plants and the possibility of a liquefied natural gas plant in the short to medium term, the reserves of natural gas are expected to continue declining, even if new discoveries are made.

Based upon the current picture for petroleum production and reserves, it is anticipated that natural gas and its associated industries would play the more dominant role over crude oil in the near future. Nonetheless, combined reserves of petroleum are declining and will continue, unless there is some major discovery. At this point in time, the petroleum sector contributes about 70% to the export earnings of Trinidad and Tobago. Any reserve that would stem the decline of petroleum would warrant attention.

Trinidad possesses substantial resources of tarsands that are not yet being commercially exploited. Estimates indicate about 2 billion barrels of bitumen contained in several surface and near surface deposits as shown in Fig. 3. The largest of these deposits is located within the Guapo, Parrylands and Forest Reserves Fields currently leased to Petrotrin. This deposit contains approximately one-half of the total bitumen resources.

Petrotrin is currently evaluating this deposit to determine whether it can be economically exploited. If 500 MM barrels of the bitumen can be extracted, it will substantially increase the reserves of petroleum and maintain production levels within the sector. For example, it implies that an increased production of 30,000 BPD can be sustained for about fifty (50) years.

Technology Survey. Survey of available technologies has indicated that a surface mining - extraction type project would have to be implemented to exploit the resource. Traditional steam injection is not applicable due to the shallow depth (from surface to 500 feet) and the high bitumen viscosity of the deposit. To overcome the low injectivity, steam injection pressures would have to be high which would lead to surface breakouts. Currently, combinations of horizontal injectors and producers are being used to extract bitumen commercially from the Athabasca tarsands, but at greater depths and for bitumen of lower viscosity. It is likely that deeper portions of this deposit (that is, &gt;500 feet) may be exploited by this technology.

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