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Home / Issue Archive / 2008 / March #3 / Tatarstan Seeks Partners to Develop Heavy Oil

№ 3 (March 2008)

Tatarstan Seeks Partners to Develop Heavy Oil

Of total oil production in the Russian Autonomous Republic of Tatarstan, 48 percent is heavy and sour. And in terms of reserves, 75 percent fall into the heavy sour category. And of that, 36 percent falls into the category of  “oil sands.”

By Vladimir Shlychkov

The history of bitumen extraction in Tatarstan, which accounts for 65 percent of Russia’s annual heavy oil production, dates to the mid-19th century when the construction industry began mining the first bituminous rock outcroppings.

The first major scientific exploration of Tatarstan’s oil sands took place over 1928 to 1930 when Soviet geophysicists studied the Sugushlinsk field on the River Sheshma River and confirmed the presence of 5.4 mln t of hydrocarbons over a 0.55 square kilometer area. But by the 1970s, interest in bitumen production fell off as the Soviet oil industry focused on developing the more easily and cheaply produced West Siberian crude.

Today, there are 450 high-viscosity oil fields in Tatarstan with reserves, depending on which estimate you believe, of 1.4 to 7 bln t. The largest are the Yuzhno-Ashalchinsk, Ashalchinsk and Mordovo-Karmal fields where most of Tatarstan’s heavy oil is sourced. The state-owned Tatneft oil company, well known for its research and development of world class technologies, uses a variety of techniques in producing high-viscosity oils, including: 

interbedding burning technology,
thermal steam technology,
cyclic steam pumping technology.
and technology similar to the Steam Assisted Gravity Drainage (SAGD) method used widely in Canada.

In 2007, Tatarstan’s prime minister, Minister Rustam Minnikhanov, lead a delegation that visited Alberta to learn more about heavy oil production technologies used in that Canadian province. Canada has produced heavy oil for 40 years and in Alberta, annual bitumen production is around 60 mln t.
Albertans use mostly the open cut method to produce 30 mln t of bitumen annually from sandstone, using diggers to mine the sand and trucks to transport the raw material to an oil processing facility near to the mine. This method is, however, impractical in Tatarstan. Where has Alberta’s fields are large and readily accessible to diggers, fields in Tatarstan are small and located between 80 and 100 meters from the surface.

Thus, of greater interest is Canada’s second leading production method, SAGD which involves pumping steam into the reservoir through horizontal wells thus reducing the viscosity of the oil and increasing the average extraction rate from 5 percent to 30 percent. The bitumen is then exposed to gasification at a temperature of around 1,000 C. Cost of production using this method is about $15 per barrel.

Tatarstan plans in the nearest future to create an adjusted register of natural bitumen fields and to decide where to apply which technology to foster production. And it is keen to exchange experience and technological know-how with specialists outside of Tatarstan. In March a Tatneft delegation will again be traveling to Alberta, this time to present papers on Tatarstan’s experiences at the World Heavy Oil Congress in Alberta.

The experience of the United States, Canada and Venezuela, where the state subsidizes the cost of heavy oils and bitumen production by up to 50 percent, is evidence that the oil industry needs state support to realize these projects, even at a time when global oil prices are at their highest. 

Sources at Tatneft say that while discussions are continuing with Royal Dutch Shell on a possible partnership, Shell is unlikely to support large scale investment in Tatarstan, though it might do some projects. So to spread the risks in choosing a foreign partner, Tatneft is also talking with Chevron, which is also a leader in the types of technologies used to extract heavy oil reservoirs.
Recently, a delegation from Tatarstan visited Shell’s scientific research center and Shell oil processing facilities in Rotterdam, Pernis and Rijswijk (Holland).

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Copyright © 2007 Eurasia Press (www.eurasiapress.com)