IntroductionThis contribution attempts to address some questions suggested

by the series( 1 , 2 , 3 ) to date. The answers are not all technical innature:

“Problems aren’t solved by technology alone; we also need athorough understanding of social dynamics.”(4)

After some select technical observations, this contribution isindeed an essay on social dynamics, as they relate to R&D in gen-eral, and SAGD development in particular.

Is There any Evidence SAGD is BetterThan Conventional Methods?

The best evidence of this is that the more successful SAGDprojects have demonstrated comparable oil/steam ratios (OSRs) tothose of vertical/thermal implementations, even though the SAGDprojects were conducted in reservoirs of significantly lower quali-ty. This is illustrated in Figure 1, which compares the realized orprojected OSRs of four actual projects plus a projected “primeAthabasca” case. Reservoir quality is characterized by permeabili-ty times thickness. It can be seen that approximately twice the khis needed to achieve the same OSR using vertical technology, ascan be obtained with twin-well SAGD.

Pikes Peak and Cold Lake were each conducted in essentiallythe best reservoirs ever found in their respective formations;whereas the pay zone at Senlac, at only about 40 feet thick, wouldhave failed most screening criteria that have been proposed forvertical CSS or steam flood.

The low value of kh assigned to the UTF B Pattern is actuallyon the generous side. A low–energy estuary resulted in good qual-ity sand units (5 Darcys) but with frequent silty laminations (25 –250 mD), which prevented easy passage of steam around them.The reservoir was too heterogenous to estimate an effective bulkpermeability, but geostatistical simulations and the observed pro-ject performance suggest an overall effective SAGD permeabilityof about 1.0 ± 0.3 Darcy.

The projected Prime McMurray case is based on 40 m of 5 Dsand, representing perhaps a top–decile Athabasca reservoir. Suchreservoir quality is not ubiquitous over the deposit, but is knownin commercial quantity at a number of widely-separated places.(5)

Finally, OSR is by far the most important economic indicatorfor steam recovery, but the high productivity of SAGD pairs alsopromises lower unit costs for drilling, workovers, wellbore heatlosses, and field operating labour.

14 Journal of Canadian Petroleum Technology

Neil Edmunds is a specialist in thethermal recovery of bitumen and heavyoil, and development of related simula-tion software. He has over 20 years ofexperience, including reservoir, produc-tion, and software engineering and haspractised as a specialist, manager, andentrepreneur.

Mr. Edmunds earned a B.Sc. inmechanical engineering at the

University of Alberta in 1978. He began his career with GulfCanada and went on to AOSTRA and Vikor Resources. Hejoined the UTF project in 1986, working on the Phase A,HASDrive, and B–pattern pilots until 1992. During the PhaseB design period, he developed the Gensim coupledwellbore/reservoir simulator.

In 1993, Mr. Edmunds joined CS Resources with responsi-bility for design and construction of the Senlac ThermalProject, a twin–well SAGD scheme in southwestSaskatchewan, and was later appointed vice president ofrecovery technologies. He retired from CS in 1997, and is cur-rently engaged in a new software venture.

Mr. Edmunds is a member of APEGGA, the PetroleumSociety of CIM, and the SPE. He is the author or co–author ofover 25 papers and patents on in situ technology, and was anSPE Distinguished Lecturer in 1996 – 1997.

FIGURE 1: COSR vs. reservoir quality, Canadian steam projects.

NOTE: An excellent article by S.M. Farouq Alientitled, “Is There Life After SAGD?”

was featured in our Distinguished Author Series here in theJCPT, in the June 1997, Vol. 36, No. 6 issue. Since its publica-tion, Farouq’s article has engendered considerable discussion.Ever mindful of the need for healthy dialogue and debate (Yes!There have been some differing opinions!) we have invited afollow-up series of Distinguished Authors to offer their viewson this thermal technique for promoting gravity drainage ofheavy oils/bitumen using horizontal well technology.

E.S. DenbinaDistinguished Author Series Chairman

On the Difficult Birth ofSAGD

January 1999, Volume 38, No. 1 15

Why Do All SAGD Wells Seem to Produceat 100 m3/d?

The UTF B pattern performance has widely come to be viewedas representative of the better Athabasca reservoirs. Nothing couldbe further from the truth; at least 1/3 of the total Athabascaresource is better than the B pattern, and the top 10% is enor-mously better. The author hypothesises that this situation hasresulted in a syndrome of significant under-design in many pro-jects, exploiting much better reservoirs.

In order to reconcile predictions for such reservoirs with UTFresults (while assuming sand quality is comparable), unrealistical-ly low values for kh, kr o i , and/or kv/ kh must be employed.Acceptable OSRs are nevertheless predicted, and the project pro-ceeds. The resulting field design may be too conservative by afactor of two or three, in terms of unit–length well performance.Thus, facility and lifting(2) capacities are short by similar factorscompared to the true potential of the wells, and individually thewells may be too long to approach this potential without hydraulicimpairment.(6)

After start-up, the expected (low) oil rate is easily achieved, butthe OSR is found to be much poorer than predictions. This isbecause if injection and production rates are substantially lowerthan the natural potential, SAGD degrades to a large pool of veryhot water and oil, with the steam zone pancaked at the top of thezone. Most of the heat goes to losses, and the accumulated con-densate does not allow much oil to drain. “Performance is worsethan expected, because the reservoir is better than assumed.”

It has formerly been assumed that this situation would be evi-dent from the producer (BHT), or conversely that operation at lowsubcool (i.e., at temperatures slightly less than saturated steam)would automatically imply good drainage and maximum perfor-mance. It now appears that this is not correct, because the mea-sured BHT is only the average resulting from mixing together var-ious streams from along the pair.( 7 ) It is possible to have a fewtens of metres producing live steam with maximum oil rates,while the rest of the well produces cool fluids at low rates per unitmetre, and still obtain a normal subcool at the liner outlet.

The recommended approach to production control in view ofthese conclusions, is simply to 1) control fluid production rate, notBHT; and 2) periodically increment the rate, then wait longenough to judge the effect on oil rate and OSR; and 3) thus opti-mize the fluid rate according to operating profit. When excesssteam capacity is available, the optimum production rate will like-ly involve some live steam production. If lack of steam capacityprevents producers from being operated up to the point of nomi-nal, but sustained, steam production, then some pairs should beshut in to allow proper operation of the remainder.

How Important is the Condensate?Farouq mentions “numerical simulations by Ito and Suzuki

(which) clearly show that convection is far more important thanconduction,” referring to the role of condensate carrying heat intothe mobile oil zone. It is very difficult to agree, however, whenone considers the actual heat capacity of the condensate.

Ito and Suzuki’s results( 8 ) predict an average depth of waterpenetration to only about the 200° C isotherm, starting at a 263° Csteam chamber. Based on the associated change in enthalpy, theliquid water could carry and deposit at most about 18% of the heatof condensation of the same water, which was obviously left backat the front. Convection due to oil is around 1/5 of this; conductionis the only thing available to carry the remaining 78%. When it isconsidered that the water streamlines are nearly perpendicular tothe temperature gradient (nearly parallel to the isotherms), thenthe convective heat deposition per unit volume of reservoir mustbe reduced by the sine of the angle between the streamlines andthe isotherms—if the water travels exactly along the isotherms,there is zero net convection. Convection is then probably less than5% of that due to conduction.

Condensate is 50 – 100 times less viscous than any oil at steamtemperature. If the flowing WOR is 2.0, then applying Darcy’s

law to each phase and dividing gives kr w/ kr o = 2.0 (µw/µo). Thisshows that only a small kr w, and thus a reasonably low Sw, arerequired to drain twice the water under the same potential gradientas the oil; it also implies a value of kro that is fairly close to 1.0,given typical oil/water relative permeability functions for uncon-solidated sands.( 9 ) Viscous fingering or other channelling effectswould strengthen these conclusions.

How Can Experts Disagree so Much?In particular, how can eminent authorities in thermal recovery

still doubt that SAGD will be commercially successful, or eventhat such a thing really exists? The answer would seem to be that,SAGD simply makes no sense from the point of view of personsexperienced with vertical schemes. This is not the fault of insuffi-cient sense, common or otherwise; it simply reflects a differentworldview.

The Nature of Scientific Revolutions (10) coined the phrase, “par-adigm shift.” In Kuhn’s context (the progress of physical sciencesince Copernicus), a paradigm is a set of shared assumptionswhich underlie and pervade a scientific tradition. Kuhn identifiesan historical pattern in scientific fields, which begins when somenew observation or calculation casts doubt on fundamentalassumptions of existing theory. Resolution of such crises mayrequire a paradigm shift: adoption of a whole new world view,and the simultaneous abandonment of the old.

There is more than one working assumption of conventionaland conventional–thermal reservoir engineering which is discard-ed in SAGD theory, but the key one is: “gravity is a weak force, asecondary perturbation on viscous mechanisms.” In most reser-voirs, under conventional depletion, this is quite valid. It just hap-pens to not be valid in the case of gas/liquid displacements (e.g.,steam floods) in high vertical permeability units, with low viscosi-ty liquids. These are conditions where gravity is dominant, andmatch those inside a steam chamber.

But stating the creed like this, or even reciting dozens of papersin support of it, is not likely to win many converts; Kuhn showswhy that is. In the first place, no one changes their whole worldview without very compelling motivation, in fact without a crisis,to use Kuhn’s word. Conversion is thus a personal experiencewhich can’t be forced by the words of others.

In any event, those words often make little sense to the intend-ed audience:

“. . . new paradigms . . . ordinarily incorporate much of thevocabulary and apparatus . . . previously employed. But they sel-dom employ these borrowed elements in quite the traditional way.Within the new paradigm, old terms, concepts, and experimentsfall into new relationships one with the other . . . Communicationacross the revolutionary divide is inevitably partial . . .”

“. . . the proponents of competing paradigms practice theirtrades in different worlds . . . they see different things when theylook from the same point in the same direction.”(11)

Regular readers of this JCPT series may have perceived a cer-tain flavour of “talking at cross-purposes” from one contributionto the next. A specific example comes from Farouq Ali’s discus-sion under Well Spacing: “A horizontal injector would acceleratethe override, and accomplish little more than what is already hap-pening.” Override is a negative word in the traditional paradigm:it is gravity, come to rain on the linear parade. But in the SAGDparadigm, SAGD is (a kind of) override, which is heat transferand depletion; the object of twin horizontal wells is to acceleraterecovery as much as possible, to minimize heat loss and maximizeeconomic recovery. We say, “accelerate that override!” Similarly,if condensate convection was important, that would be anenhancement, not a “concern.”

If We’re so Smart, Why Aren’t We Rich?In other words, if concept and performance projections have

been essentially correct all these years, why have major commer-cial operations not yet appeared? The answer to this may be sum-marized as: there is a vast difference between a proven concept

and a working industrial technology.

Concepts vs. TechnologiesIn Mastering the Dynamics of Innovation, James Utterback

traces the history of many technological revolutions in diverseindustries, demonstrating patterns which are familiar from Kuhn.but amplified by organizational dynamics. A theory or concept isa single thing that costs relatively little and is complete in one ortwo technical papers, and perhaps proven with a small-scaleexperiment. A technology, on the other hand, is a complete sys-tem of methods and tools, which requires the organized, long-termefforts of many talented people to create. Consider horizontaldrilling: it’s a very simple concept, but there is an amazingamount of sophisticated technology utilized today in making itroutine, including dedicated rigs. It took about ten years to devel-op the supporting bits and pieces, and scepticism about the practi-cality of horizontal wells was widespread until this was largelyaccomplished.

If a new idea is sufficiently different, then a lot of existingtools, techniques, and rules of thumb become obsolete and mustbe replaced. Because even new paradigms are built from old ones,every individual and organization will grasp the new idea in theirunique context, and none will have quite the same view of theimplications—promise and problems—of the breakthrough athand. Unexpected difficulties arise with every new piece of hard-ware or type of operation. Utterback calls this extended, painfulprocess the “fluid phase.” Donnelly captured the essence of thisphase, in his recent contribution to this series:

“attempts to apply (new EOR) technology in every conceivablesituation are made with many of these attempts ending in failure. . . there is a deluge of modifications to the original concept . . .

many of these will . . . prove unfruitful.”The fluid phase ends when a dominant design finally emerges,

as a result of demonstrated economic success. No one can objec-tively predict exactly what that design will entail, until after it hasappeared; nor when it will appear, because no one can predictwhich problems will be encountered or what will be required toovercome them.

In Utterback’s survey, a time scale of twenty years from initialconcept to dominant process is not at all unusual. SAGD is goingto take somewhat longer than this, it appears; but consider that aSAGD test is conducted in a remote and invisible place, andrequires millions of dollars and typically five years to design,build, and operate. A reservoir is a “reactor” of uncertain proper-ties and proportions, which is never reproducible from one experi-ment to the next. Needless to say, these aspects complicate mat-ters greatly.

What’s the Biggest Hurdle?Paradigm Meets Organization

Technology development is necessarily an organizational activ-ity, requiring large amounts of risk capital over many years.Established companies are the natural players, especially in thepetroleum industry. Unfortunately, the effect of a truly radicalapproach is to:

“. . . destroy the usefulness of the architectural knowledge ofestablished firms; and since architectural knowledge tends tobecome embedded in the structure and information–processingprocedures of established organizations, this destruction is diffi-cult for firms to recognize and hard to correct.”(12)

The “architectural knowledge” of an oil company includesthings like property evaluations, exploration focus, project cashflow profile, scheme optimization, well completions, lifting equip-ment, treating economics, operating policy, maintenance profiles,and so on. All of this is lost in the jump to thermal production. Forexample, under primary production, sand control is harmful andexpensive; but with thermal recovery, it’s both essential and gen-erally benign to productivity.

The Task Force ModelThe author doesn’t expect to create controversy by suggesting

that few majors have met these challenges well in the past. Acommon approach to experimental projects has been to divide thework into familiar specialties, supported by a mix of regular staff,researchers, and consultants. Since each specialty will only beneeded for a certain phase of the (one-time) project, many posi-tions are filled with temporary and/or part-time secondments.

Such a “task force” model is founded on the erroneous equationof a proven concept with a developed technology. Companiesthink of SAGD field projects as proof-of-application tests, to“determine” the economics of SAGD in a given reservoir; where-as in reality they are entering into the process of learning and cre-ating the technology necessary to apply the concept. Without thisappreciation, there is a great tendency upon failure to blame theconcept, rather than improve the implementation.

A useful attitude for organizations contemplating technologyprojects is to view them as 1) the making of mistakes; 2) learningfrom those mistakes; and 3) remembering the lessons. The taskforce model has serious problems in all of these areas.

Making Mistakes

Mistakes are inevitable, but they only manifest when you actu-ally try something. The task force model often diffuses technicalauthority to the point where no one is quite responsible for decid-ing anything. Long debates ensue which pre-empt field experi-ment; the problems which then actually appear are only rarelyamong those previously debated.

Seconded or contract personnel are insufficiently isolated fromtheir regular duties in the parent organization. When things aren’tgoing well on their special project, they feel a powerful desire toreturn to their regular, successful career path. This is in proportionto the diffusion of technical authority; people will be motivatedonly to the extent that they feel personally responsible for actionsand outcomes.

Learning from Mistakes

A task force is assembled from industry specialists. The prob-lem is, it’s the wrong industry. The right one doesn’t yet exist, andno one is certain what the new specialties should be; nor how theirindividual efforts should be interfaced. Some emerging SAGDspecialties, for example, are “wellbore thermohydraulics” and“3D steam trap dynamics.”

Whether extra or interdisciplinary, many severe problems tendto get lost in the voids between task force specialties. No one rec-ognizes a problem as quite their problem, or else as a problem thatcan be solved, or even, sometimes, as a problem at all. Workingrelationships are transient, limiting both precision and honesty ofcommunication; home truths are left unspoken at critical times.

Remembering Mistakes

After a field pilot is decommissioned, the only remaining assetis intellectual. Given the difficulty of transmitting novel ideas bypaper reports and statistics alone, this asset primarily resides inthe minds of project contributors. From this perspective, the entireinvestment in a pilot project is ultimately towards training of per-sonnel. The single-project task force model practically ensureseventual dissipation of this investment; very few groups haveenjoyed continuity through a full business cycle.(13)

A Proposed ModelOngoing businesses concentrate on efficient execution of

proven technical recipes, but technical development is the searchfor new recipes. The kitchen will get messy, there will be occa-sional smoke, and among the senior chefs an irresistible urge willeventually arise to put an end to experimentation and clean up.

If technical development is an organizational activity, and if theorganization needs a wholly different mindset from business asusual, what should it look like? The ideal characteristics of such a

16 Journal of Canadian Petroleum Technology

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group might include that:• It is a permanent and separate business unit which reports

the to parent organization at the executive level (all neces-sary management are members of the group)

• It is chartered solely to develop and implement a specifictechnology opportunity (e.g., twin-well SAGD on lease X):no broad R&D mandate, no other operational responsibility.Members are full time and free of extraneous duties

• It is of a minimum size, to maximize individual responsibili-ty and challenge, and interdisciplinary communication

• Group performance measured in terms of demonstratinghard technical parameters (e.g., SOR, CDOR) within anagreed budget and timetable

• It designs, operates, and analyses all field tests, and withsuccess evolves into the commercial group, by means oftimely infusion of seasoned managers, and perhaps reassign-ment of the more easily-bored researchers

The last ideal follows the observation that is easier to instilloperating discipline into a formerly freewheeling research group,than it is to impose radical new technology on an existing opera-tion. The best place to make converts is at cult headquarters.

Was There Any Life Before SAGD?It remains mystifying that enthusiasm for vertical/thermal tech-

nology should exist at all in Canada: not because of SAGD’spromise, but rather because of the failure of California-style tech-nology to address the vast bulk of Canadian heavy resources,despite several decades of effort and hundreds of millions of dol-lars. The two vertical projects in Figure 1, essentially the onlysuccesses to date, generated marginal economic returns from thecream of reservoirs. Should we hope for reservoirs that fit aknown technology, or should we build technologies that fit ourknown reservoirs?

REFERENCES1. FAROUQ ALI, S.M., Is There Life After SAGD?; Journal of

Canadian Petroleum Technology, Vol. 36, No. 6, June 1997.2. B U T L E R, R.M., SAGD Comes of AGE!; Journal of Canadian

Petroleum Technology, Vol. 37, No. 7, July 1998.3. D O N N E L L Y, J.K., Who Invented Gravity?; Journal of Canadian

Petroleum Technology, Vol. 37, No. 9, September 1998.4. B A L L, Norman, An All Female Engineering School?; U of A

Engineer, University of Alberta, Fall 1998.5. ALBERTA EUB Atlas of Crude Bitumen Reserves; A l b e r t a

Department of Energy, 1996.6. E D M U N D S, N.R. and G I T T I N S,S.D., Effective Steam Assisted

Gravity Drainage to Long Horizontal Well Pairs; Journal ofCanadian Petroleum Technology, Vol. 32, No. 6, June 1993.

7. E D M U N D S, N.R., Investigation of SAGD Steam Trap Control inTwo and Three Dimensions, CIM/SPE 50413; I n t e r n a t i o n a lConference on Horzontal Well Technology, Calgary, Nov. 1 – 4,1998.

8. I T O, Y., and S U Z U K I, S., Numerical Simulation of the SAGDProcess in the Hangingstone Oil Sands Reservoir; CIM Paper No.96-57, 47th ATM, Calgary, Figs. 6 and 9, June 10 – 12, 1996.

9. M U S K A T, M., Physical Principles of Oil Production; I H R D C ,Boston, Fig. 7.8 and Sec. 7.5., 1981/1949

10. KUHN, T.S., The Structure of Scientific Revolutions; The Universityof Chicago, 1962.

11. KUHN, T.S., The Structure of Scientific Revolutions; The Universityof Chicago, pp. 149-150, 1962.

12. HENDERSON, R., and CLARK, K., Architectural Innovation: TheReconfiguration of Existing Product Technologies and the Failure ofEstablished Firms; Administrative Science Quarterly, Vol. 35, No. 1(1990), p. 9; quoted in Utterback, p. 195.

13. MILLER, K., What Causes Booms and Busts in Heavy Oil?; Journalof Canadian Petroleum Technology, Vol. 37, No. 6, June, 1998.�

January 1999, Volume 38, No. 1 17

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