The techno-economics of bitumen recovery from oil and tar sands as a complement to oil exploration in Nigeria

Abstract

The Nigeria economy is wholly dependent on revenue from oil. However, bitumen has been discovered in the country since 1903 and has remained untapped over the years. The need for the country to complement oil exploration with the huge bitumen deposit cannot be overemphasized. This will help to improve the country's gross domestic product (GDP) and revenue available to government. Bitumen is classifled as heavy crude with API (American petroleum Institute) number ranging between 50 and 110 and occurs in Nigeria, Canada, Saudi Arabia, Venezuela etc from which petroleum products could be derived. This dissertation looked at the Canadian experience by comparing the oil and tar sand deposit found in Canada with particular reference to Athabasca (Grosmont, Wabiskaw McMurray and Nsiku) with that in Nigeria with a view of transferring process technology from Canada to Nigeria. The Nigeria and Athabasca tar sands occur in the same type of environment. These are the deltaic, fluvial marine deposit in an incised valley with similar reservoir, chemical and physical properties. However, the Nigeria tar sand is more asphaltenic and also contains more resin and as such will yield more product volume during hydro cracking albeit more acidic. The differences in the components (viscosity, resin and asphaltenes contents, sulphur and heavy metal contents) of the tar sands is within the limit of technology adaptation. Any of the technologies used in Athabasca, Canada is adaptable to Nigeria according to the findings of this research. The techno-economics of some of the process technologies are. x-rayed using the PTAC (petroleum technology alliance Canada) technology recovery model in order to obtain their unit cost for Nigeria bitumen. The unit cost of processed bitumen adopting steam assisted gravity drainage (SAGD), in situ combustion (ISC) and cyclic steam stimulation (CSS) process technology is 40.59, 25.00 and 44.14 Canadian dollars respectively. The unit cost in Canada using the same process technology is 57.27, 25.00 and 61.33 Canadian dollars respectively. The unit cost in Nigeria is substantively lesser than in Canada. A trade off is thereafter done using life cycle costing so as to select the best process technology for the Nigeria oil/tar sands. The net present value/internal rate of return is found to be B$3,062/36.35% for steam assisted gravity drainage, B$I,570124.51 % for cyclic steam stimulation and B$3,503/39.64% for in situ combustion. Though in situ combustion returned the highest net present value and internal rate of return, it proved not to be the best option for Nigeria due to environmental concern and response time to production. The best viable option for the Nigeria tar sand was then deemed to be steam assisted gravity drainage. An integrated oil strategy coupled with cogeneration using MSAR was also seen to considerably amplify the benefits accruable from bitumen exploration; therefore, an investment in bitumen exploration in Nigeria is a wise economic decision.