Can Heavy Oil and Deepwater be Mixed?
Authors: Haney John 
Published: October 2008

Abstract
The development of heavy oil offshore in general has been a major challenge for the industry. Making this happen in deepwater presents greater barriers given the economics of such developments, although it is becoming increasing important that solutions be found. This will require addressing three areas to make it viable - well performance, development costs and product value. There are actually factors that give deepwater and remote developments in particular an advantage in heavy oil developments, but there remains numerous hurdles before it can be seen as an option that will compete for investments. Technology and novel business solutions will both be key enablers in making this a reality.

Introduction
Many Operators have struggled to make heavy oil (less than 20 API gravity) work offshore at all. Shell's global heavy oil production in Canada, Oman, the Netherlands, California and Venezula has all been primarily onshore with a few shallow water fields. The higher costs associated with deepwater developments have made the barrier even higher with typical cost being two-times those of similar light oil fields. However, the increasingly heavy nature of global deepwater discoveries has forced the industry to address this issue now. Shell's experience in heavy oil is being applied to this challenge in Brazil and other deepwater arenas.
Is it possible that such developments can be made consistently economically viable and compete with other options? Do deepwater developments by their very nature offer some unique advantages over other areas? To overcome the challenges the "triple hitters" of heavy oil will need to be considered:Reduced well performance (recovery and rate)Increased developments costs, including wells and offshore processing equipmentReduced value for the product in the market Depending on the specific field properties and location, all three of these may need to be overcome.

Well performance
It is not unusual in heavy oil developments to reduce typical light oil recovery efficiencies by half. The critical factor in this regard being not the gravity of the oil, but the viscosity with a very loose correlation between the two. The resulting reduction of reserves by one half makes typical deepwater developments uneconomic as they are normally driven by high rates and high ultimates per well.
It should be recognized that during the exploration and appraisal phase it is critical to properly assess the crude properties for these heavy oils as the range of uncertainty is much larger than typically encountered. This includes increased need for short-term well testing to determine producability. Such testing presents numerous challenges, especially in an exploration mode. Depending upon the oil viscosity, it may require complex submersible pumping systems, lifting equipment and processing equipment that is not standard for offshore testing. Planning and contingency systems are often required to ensure success, including conducting it in a safe and environmentally friendly manner.
It is also important during the appraisal phase to obtain reliable oil samples and cores to accurately analyze and predict reservoir properties (relative permeability, porosity, etc,) and performance.