RPT-Canada's energy sector taps bitumen, sticky rival to oil sands
By Scott Haggett
CALGARY, Alberta, July 8 (Reuters) - Pilot projects in an as-yet undeveloped oilfield could remake Canada's energy map, if producers can successfully wrest a sludgy, tarry substance called bitumen from porous rock in remote northern Alberta.
The bitumen in the caverns and cracks of the dolomite and limestone rock is a vast resource, estimated by Alberta regulators to hold close to 500 billion barrels of oil, or more than the combined recoverable oil reserves of Saudi Arabia and Venezuela, the world's top two oil states.
The bitumen, an asphalt-like form of heavy oil, doesn't count in international tallies of Canadian energy reserves because nobody has yet succeeded in extracting it on a large scale, despite small-scale attempts in the 1980s. So Canada still ranks third in the world by oil reserves.
The high price of oil and technology developed for the nearby oil sands may change that equation, and a few projects are already testing whether the long-ignored deposits can be developed profitably.
One effort is led by Glenn Schmidt, an energy executive who sold oil sands developer Deer Creek Energy Ltd to France's Total SA for nearly C$1.7 billion ($1.62 billion) in 2005.
With partner Osum Oil Sands Corp, Schmidt's closely held Laricina Energy Ltd is operating the first pilot project in three decades in the West Athabascan Grosmont, about 100 kilometers (60 miles) west of the oil-sands center of Fort McMurray, Alberta.
"Like all oil companies, you ask 'Where to next?'" Schmidt said in an interview. His answer was the carbonate fields, tested but abandoned by Unocal in the 1980s because of issues at the well and a low oil price. Continued...