World Oil Demand

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World oil demand is increasing as emerging economies need more energy to increase their living standards. Estimates, shown below, are that by 2030, China and India as emerging markets will import over 70% to 90% of their fossil fuel needs (1) . Coupled to a continued high and growing demand for oil, makes this a robust market for the next 30 years. Currently, the conventional approach is to aggressively explore and develop new fields. This has led to a growth in drilling deeper wells and looking to ‘off-shore’ sites for new production of ‘light’ crude. However, as recent events in the Gulf of Mexico demonstrate with the British Petroleum incident and the resulting clean-up costs and loss of credibility, this approach has risks. It will definitely be more costly with the ensuing additional oversight and regulation. With the world's supply of 'medium to light' crude (>20o API) getting smaller and more costly to obtain, the market for heavy crude will grow to satisfy the additional demand. Even though it is estimated that the US dependence on imports will decrease, the percent of 'heavy oil' as an import (and as a domestic source) will grow (2). However, the refining capacity for heavy crude without upgrading is relatively small (only about 25% of current US capacity (3)) and a majority of heavy crude is located in remote areas where recovery and transport are difficult and expensive. We are proposing developing a supercritical water process based on known, published process chemistry to extract the heavy oil/bitumen and then 'hydro-crack' to achieve API's of >20o to access the true value of the world's heavy oil supply, especially domestic supplies in Canada and the US. Currently, medium to light oil sells for about ... ... middle of paper ... ...onal coking and fluid catalytic cracking (FCC) techniques that are expensive and difficult to deploy at remote sites. SCBEU offers a new approach that can be integrated with current surface recovery process, SAGD recovery methods at remote sites, deployed at deep-water drilling rigs and used in place of or along side de-salting units at conventional refineries to upgrade heavy crude. A baseline technology deployment case has been developed to estimate the process profitability. More detailed results are presented below, but the estimated cash flow from a Monte Carlo simulation for a 1000 bbl/day process sited at the Arroyo Grande oil field near Edna CA shows a Net Present Value (NPV) of $41,000,000 and an Internal Rate of Return (MIRR) of 13.6% for a project with 3 years of development and deployment and 10 years of operation using direct estimated costs.

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