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7Fi

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IPC

Shell Exploration & Production

Shell’s In-situ Conversion Process

Colorado Energy Research Institute

26th Oil Shale Symposium

16-18 October, 2006

Harold Vinegar Chief Scientist In-situ Conversion Processes

155

extra-heavy oil & bitumen

oil shale

100 bln boe

Unconventionals Potential

In-Situ Conversion Process (ICP)

• Electric resistance heaters inserted into holes to gradually heat shale subsurface

• Applicable to oil shale and heavy oil/bitumen

• Technology accelerates the natural maturation of kerogen by gradual heating in oil shale

• Results in high recoveries and light hydrocarbon products yielding high quality transportation fuels

InletCooler

Separator

GasTreater

Des

alte

r

Hyd

rotr

eate

r

Frac

tiona

tion

H2Purification

SRU +SCOT

TargetZone

Oil Shale Development Concept

Peace River

Colorado Site Houston – Woodcreek Site

Houston – GasmerSite

Engineering and Testing Facilities

Temperature (ºC)

Rec

over

y Ef

ficie

ncy

(Bar

rels

per

Bar

rel o

f Fis

cher

Ass

ay)

2 deg C /day at 100 psig

0.0

0.2

0.4

0.6

0.8

1.0

1.2

260 280 300 320 340 360 380 400 420 440

ICP Oil

Fischer Assay Oil

BOE

Oil

Recovery Efficiency – Colorado Oil Shale Test

Shell In SituPyrolysis

Surface RetortPyrolysis

45 APIGravity

Tar Like Solid

Carbon Number

Wei

ght %

19 APIGravity

0 5 10

12

10

8

6

4

2

015 20 25 30 35 40 45 50 100 120

350°CIn Situ

800°CSurfaceRetort

SHALE OIL EXAMPLENaphtha - 30%Diesel - 30%Jet - 30%Resid - 10%

NAPHTHA JET DIESEL RESID

Better Feedstock For Upgrading

Cleaned USC

Atm

Dis

tilla

tion

Gasoline

Diesel

Kerosene

LPG

Naphtha-minus Hydrotreating

VGO Hydrocracking

Kero Hydrotreating

Diesel Hydrotreating

Catalytic Reforming

Simplified Fractionation and HydroprocessingScheme

Advantages of In Situ Conversion

• In situ process: no mining

• Less water use than retort technology

• More oil and gas from smaller area

• Accesses deeper oil shale resources

• Uses entire resource column, not just rich layers

• Yields high quality transportation fuels

Northwest Colorado

Completed oil shale field tests

2002-2004 Mahogany Isolation Test 2003-2005 MDP South

1997-1998 Mahogany Field Experiment

2000-2005 Mahogany Development Project (MDP)

2001-present Deep Heater Test

Colorado Research Facilities

(F = 1)

0

5

10

15

20

25

30

35

40

45

5/1/2004 6/30/2004 8/29/2004 10/28/2004 12/27/2004 2/25/2005 4/26/2005 6/25/2005 8/24/2005

Oil

Rat

e (B

OPD

) /

Gas

Rat

e (M

CFD

)

Date

STARS Dry Gas Field Dry Gas - H2S STARS C5+ Oil Field C5+ Liquids

Oil & gas rates from MDP(s) (2004-2005)

0

500

1000

1500

2000

2500

3000

2004/04/28 2004/06/27 2004/08/26 2004/10/25 2004/12/24 2005/02/22 2005/04/23 2005/06/22 2005/08/21 2005/10/20

日期

累 ( 桶 )

实际原油桶当量 数模原油桶当量 实际原油 数模原油

2,659

1,813

BOE

Oil

Date

Cum

ulat

ive

Oil

and

BO

E (b

bl)

BOE Produced BOE Simulation Oil SimulationOil Produced

Cumulative MDP(s) production (2004-2005)

Water &TemperatureMonitor Wells

FreezeWells

Heater &Producer

Wells

NaturalFracturedShaleAquifers

SolidShale

Water &TemperatureMonitor Wells

FreezeWells

Heater &Producer

Wells

Water &TemperatureMonitor Holes

FreezeHoles

Heater &Producer

Holes

NaturalFracturedShaleWater Zones

Shale

Freeze Wall Concept

Mahogany Isolation Test (MIT) – 2001

• Small-scale, circular freeze wall test

• Conducted to determine whether a freeze wall keeps groundwater out of possible production zone

M01AM02B

M03L5

M04L4

M05A

M06B

M07L5

M08L4

M16L4

M15L5

M14B

M13A

M12L4

M11L5

M10BM09A

F01 F02 F03

F04

F05

F06

F07

F08

F09F10F11F12

F13

F14

F15

F16

F17

F18T01

T02

M17A

M18B

M19L5M20L4M21B

M22A

M23L4

M24L5

H01

P01

H02

North

HeaterProducerFreeze WellTemperature MonitorMonitor

Ring of Freeze Holes

ObserverHoles

Heater & ProducerHoles

Mahogany Isolation Test (MIT) – 2001

Add water to test wall

Add water to test wall

Add water to test wallWith

draw

wat

er in

side

Crossflow ends - outside difference widens

Inside level rises due to ice expansion

Wal

l Sea

ls

Beg

in F

reez

ing

60

70

80

90

100

110

120

130

140

09/1

5/02

10/1

5/02

11/1

4/02

12/1

4/02

01/1

3/03

02/1

2/03

03/1

4/03

04/1

3/03

05/1

3/03

M17A & M18B InsideM05A OutsideM06B Outside

Depth (meters)

Freeze Wall Test Site (2006)

Freeze Wall Test Site (2006)

Next research phase – Freeze Wall Test

• Objective of the freeze wall is to form an underground barrier to protect groundwater and isolate any proposed subsurface production areas

• FWT is an environmental test for purposes of groundwater protection

• Football field sized test on 15 acres of Shell’s private land near existing research

• Construction began late ’05 – reclamation expected

Conclusions

• Oil shale is a strategic U.S. resource

• ICP technology has advanced dramatically since 1980, with over 200 Shell patents.

• We are very encouraged by research results, but further testing is still necessary before commercial investment decision – earliest around the end of the decade