On the Difficult Birth of
SAGD
Neil Edmunds is a specialist in the
thermal recovery of bitumen and heavy
oil, and development of related simula-
tion software. He has over 20 years of
experience, including reservoir, produc-
tion, and software engineering and has
practised as a specialist, manager, and
entrepreneur.
Mr. Edmunds earned a B.Sc. in
mechanical engineering at the
University of Alberta in 1978. He began his career with Gulf
Canada and went on to AOSTRA and Vikor Resources. He
joined the UTF project in 1986, working on the Phase A,
HASDrive, and B–pattern pilots until 1992. During the Phase
B design period, he developed the Gensim coupled
wellbore/reservoir simulator.
In 1993, Mr. Edmunds joined CS Resources with responsi-
bility for design and construction of the Senlac Thermal
Project, a twin–well SAGD scheme in southwest
Saskatchewan, and was later appointed vice president of
recovery 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 Petroleum
Society of CIM, and the SPE. He is the author or co–author of
over 25 papers and patents on in situ technology, and was an
SPE Distinguished Lecturer in 1996 – 1997.
Introduction
This contribution attempts to address some questions suggested
by the series(1,2,3) to date. The answers are not all technical in
nature:
“Problems aren’t solved by technology alone; we also need a
thorough understanding of social dynamics.”(4)
After some select technical observations, this contribution is
indeed an essay on social dynamics, as they relate to R&D in gen-
eral, and SAGD development in particular.
NOTE: An excellent article by S.M. Farouq Ali
entitled, “Is There Life After SAGD?”
was featured in our Distinguished Author Series here in the
JCPT, 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 a
follow-up series of Distinguished Authors to offer their views
on this thermal technique for promoting gravity drainage of
heavy oils/bitumen using horizontal well technology.
E.S. Denbina
Distinguished Author Series Chairman
14
Is There any Evidence SAGD is Better
Than Conventional Methods?
The best evidence of this is that the more successful SAGD
projects have demonstrated comparable oil/steam ratios (OSRs) to
those of vertical/thermal implementations, even though the SAGD
projects were conducted in reservoirs of significantly lower quali-
ty. This is illustrated in Figure 1, which compares the realized or
projected OSRs of four actual projects plus a projected “prime
Athabasca” case. Reservoir quality is characterized by permeabili-
ty times thickness. It can be seen that approximately twice the kh
is needed to achieve the same OSR using vertical technology, as
can be obtained with twin-well SAGD.
Pikes Peak and Cold Lake were each conducted in essentially
the best reservoirs ever found in their respective formations;
whereas the pay zone at Senlac, at only about 40 feet thick, would
have failed most screening criteria that have been proposed for
vertical CSS or steam flood.
The low value of kh assigned to the UTF B Pattern is actually
on 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 bulk
permeability, but geostatistical simulations and the observed pro-
ject performance suggest an overall effective SAGD permeability
of about 1.0 ± 0.3 Darcy.
The projected Prime McMurray case is based on 40 m of 5 D
sand, representing perhaps a top–decile Athabasca reservoir. Such
reservoir quality is not ubiquitous over the deposit, but is known
in commercial quantity at a number of widely-separated places.(5)
Finally, OSR is by far the most important economic indicator
for steam recovery, but the high productivity of SAGD pairs also
promises lower unit costs for drilling, workovers, wellbore heat
losses, and field operating labour.
FIGURE 1: COSR vs. reservoir quality, Canadian steam projects.
Journal of Canadian Petroleum Technology
Why Do All SAGD Wells Seem to Produce
at 100 m3/d?
The UTF B pattern performance has widely come to be viewed
as representative of the better Athabasca reservoirs. Nothing could
be further from the truth; at least 1/3 of the total Athabasca
resource is better than the B pattern, and the top 10% is enor-
mously better. The author hypothesises that this situation has
resulted in a syndrome of significant under-design in many pro-
jects, exploiting much better reservoirs.
In order to reconcile predictions for such reservoirs with UTF
results (while assuming sand quality is comparable), unrealistical-
ly low values for k h , k r o i , and/or k v/ k h must be employed.
Acceptable OSRs are nevertheless predicted, and the project pro-
ceeds. The resulting field design may be too conservative by a
factor of two or three, in terms of unit–length well performance.
Thus, facility and lifting(2) capacities are short by similar factors
compared to the true potential of the wells, and individually the
wells may be too long to approach this potential without hydraulic
impairment.(6)
After start-up, the expected (low) oil rate is easily achieved, but
the OSR is found to be much poorer than predictions. This is
because if injection and production rates are substantially lower
than the natural potential, SAGD degrades to a large pool of very
hot water and oil, with the steam zone pancaked at the top of the
zone. Most of the heat goes to losses, and the accumulated con-
densate does not allow much oil to drain. “Performance is worse
than 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 low
subcool (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 few
tens of metres producing live steam with maximum oil rates,
while the rest of the well produces cool fluids at low rates per unit
metre, and still obtain a normal subcool at the liner outlet.
The recommended approach to production control in view of
these conclusions, is simply to 1) control fluid production rate, not
BHT; and 2) periodically increment the rate, then wait long
enough to judge the effect on oil rate and OSR; and 3) thus opti-
mize the fluid rate according to operating profit. When excess
steam capacity is available, the optimum production rate will like-
ly involve some live steam production. If lack of steam capacity
prevents producers from being operated up to the point of nomi-
nal, but sustained, steam production, then some pairs should be
shut 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 than
conduction,” referring to the role of condensate carrying heat into
the mobile oil zone. It is very difficult to agree, however, when
one considers the actual heat capacity of the condensate.
Ito and Suzuki’s results(8) predict an average depth of water
penetration to only about the 200° C isotherm, starting at a 263° C
steam chamber. Based on the associated change in enthalpy, the
liquid water could carry and deposit at most about 18% of the heat
of condensation of the same water, which was obviously left back
at the front. Convection due to oil is around 1/5 of this; conduction
is the only thing available to carry the remaining 78%. When it is
considered that the water streamlines are nearly perpendicular to
the temperature gradient (nearly parallel to the isotherms), then
the convective heat deposition per unit volume of reservoir must
be reduced by the sine of the angle between the streamlines and
the isotherms—if the water travels exactly along the isotherms,
there is zero net convection. Convection is then probably less than
5% of that due to conduction.
Condensate is 50 – 100 times less viscous than any oil at steam
temperature. If the flowing WOR is 2.0, then applying Darcy’s
January 1999, Volume 38, No. 1
law to each phase and dividing gives krw/kro = 2.0 (µw/µo). This
shows that only a small krw, and thus a reasonably low Sw, are
required to drain twice the water under the same potential gradient
as 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 effects
would 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 even
that such a thing really exists? The answer would seem to be that,
SAGD simply makes no sense from the point of view of persons
experienced with vertical schemes. This is not the fault of insuffi-
cient sense, common or otherwise; it simply reflects a different
worldview.
The Nature of Scientific Revolutions (10) coined the phrase, “par-
adigm shift.” In Kuhn’s context (the progress of physical science
since Copernicus), a paradigm is a set of shared assumptions
which underlie and pervade a scientific tradition. Kuhn identifies
an historical pattern in scientific fields, which begins when some
new observation or calculation casts doubt on fundamental
assumptions of existing theory. Resolution of such crises may
require 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 conventional
and conventional–thermal reservoir engineering which is discard-
ed in SAGD theory, but the key one is: “gravity is a weak force, a
secondary 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, and
match those inside a steam chamber.
But stating the creed like this, or even reciting dozens of papers
in support of it, is not likely to win many converts; Kuhn shows
why that is. In the first place, no one changes their whole world
view without very compelling motivation, in fact without a crisis,
to use Kuhn’s word. Conversion is thus a personal experience
which 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 the
vocabulary 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 experiments
fall into new relationships one with the other . . . Communication
across the revolutionary divide is inevitably partial . . .”
“. . . the proponents of competing paradigms practice their
trades in different worlds . . . they see different things when they
look 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 contribution
to the next. A specific example comes from Farouq Ali’s discus-
sion under Well Spacing: “A horizontal injector would accelerate
the 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 SAGD
paradigm, SAGD is (a kind of) override, which is heat transfer
and depletion; the object of twin horizontal wells is to accelerate
recovery as much as possible, to minimize heat loss and maximize
economic recovery. We say, “accelerate that override!” Similarly,
if condensate convection was important, that would be an
enhancement, 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
15
and a working industrial technology.
Concepts vs. Technologies
In Mastering the Dynamics of Innovation, James Utterback
traces the history of many technological revolutions in diverse
industries, demonstrating patterns which are familiar from Kuhn.
but amplified by organizational dynamics. A theory or concept is
a single thing that costs relatively little and is complete in one or
two technical papers, and perhaps proven with a small-scale
experiment. A technology, on the other hand, is a complete sys-
tem of methods and tools, which requires the organized, long-term
efforts of many talented people to create. Consider horizontal
drilling: it’s a very simple concept, but there is an amazing
amount of sophisticated technology utilized today in making it
routine, 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 largely
accomplished.
If a new idea is sufficiently different, then a lot of existing
tools, techniques, and rules of thumb become obsolete and must
be replaced. Because even new paradigms are built from old ones,
every individual and organization will grasp the new idea in their
unique context, and none will have quite the same view of the
implications—promise and problems—of the breakthrough at
hand. Unexpected difficulties arise with every new piece of hard-
ware or type of operation. Utterback calls this extended, painful
process the “fluid phase.” Donnelly captured the essence of this
phase, in his recent contribution to this series:
“attempts to apply (new EOR) technology in every conceivable
situation 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 has
appeared; nor when it will appear, because no one can predict
which problems will be encountered or what will be required to
overcome them.
In Utterback’s survey, a time scale of twenty years from initial
concept to dominant process is not at all unusual. SAGD is going
to take somewhat longer than this, it appears; but consider that a
SAGD test is conducted in a remote and invisible place, and
requires 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 the
petroleum industry. Unfortunately, the effect of a truly radical
approach is to:
“. . . destroy the usefulness of the architectural knowledge of
established firms; and since architectural knowledge tends to
become embedded in the structure and information–processing
procedures of established organizations, this destruction is diffi-
cult for firms to recognize and hard to correct.”(12)
The “architectural knowledge” of an oil company includes
things like property evaluations, exploration focus, project cash
flow 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. For
example, under primary production, sand control is harmful and
expensive; but with thermal recovery, it’s both essential and gen-
erally benign to productivity.
16
The Task Force Model
The author doesn’t expect to create controversy by suggesting
that few majors have met these challenges well in the past. A
common approach to experimental projects has been to divide the
work into familiar specialties, supported by a mix of regular staff,
researchers, and consultants. Since each specialty will only be
needed 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 equation
of a proven concept with a developed technology. Companies
think 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 this
appreciation, there is a great tendency upon failure to blame the
concept, rather than improve the implementation.
A useful attitude for organizations contemplating technology
projects is to view them as 1) the making of mistakes; 2) learning
from those mistakes; and 3) remembering the lessons. The task
force 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 technical
authority 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 rarely
among those previously debated.
Seconded or contract personnel are insufficiently isolated from
their regular duties in the parent organization. When things aren’t
going well on their special project, they feel a powerful desire to
return to their regular, successful career path. This is in proportion
to the diffusion of technical authority; people will be motivated
only to the extent that they feel personally responsible for actions
and 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, and
no one is certain what the new specialties should be; nor how their
individual efforts should be interfaced. Some emerging SAGD
specialties, for example, are “wellbore thermohydraulics” and
“3D steam trap dynamics.”
Whether extra or interdisciplinary, many severe problems tend
to get lost in the voids between task force specialties. No one rec-
ognizes a problem as quite their problem, or else as a problem that
can be solved, or even, sometimes, as a problem at all. Working
relationships are transient, limiting both precision and honesty of
communication; home truths are left unspoken at critical times.
Remembering Mistakes
After a field pilot is decommissioned, the only remaining asset
is intellectual. Given the difficulty of transmitting novel ideas by
paper reports and statistics alone, this asset primarily resides in
the minds of project contributors. From this perspective, the entire
investment in a pilot project is ultimately towards training of per-
sonnel. The single-project task force model practically ensures
eventual dissipation of this investment; very few groups have
enjoyed continuity through a full business cycle.(13)
A Proposed Model
Ongoing businesses concentrate on efficient execution of
proven technical recipes, but technical development is the search
for new recipes. The kitchen will get messy, there will be occa-
sional smoke, and among the senior chefs an irresistible urge will
eventually arise to put an end to experimentation and clean up.
If technical development is an organizational activity, and if the
organization needs a wholly different mindset from business as
usual, what should it look like? The ideal characteristics of such a
Journal of Canadian Petroleum Technology
group might include that:
• It is a permanent and separate business unit which reports
the to parent organization at the executive level (all neces- ATTENTION ALL MEMBERS
sary management are members of the group)
• It is chartered solely to develop and implement a specific
technology opportunity (e.g., twin-well SAGD on lease X): The Petroleum Society is
no broad R&D mandate, no other operational responsibility.
Members are full time and free of extraneous duties celebrating its 50th Anniversary!
• It is of a minimum size, to maximize individual responsibili-
ty and challenge, and interdisciplinary communication We are initiating a worldwide membership drive.
• Group performance measured in terms of demonstrating The Petroleum Society currently has 3,000 members.
hard technical parameters (e.g., SOR, CDOR) within an THE GOAL FOR 1999 IS TOINCREASETO 5,000 MEMBERS.
agreed budget and timetable
• It designs, operates, and analyses all field tests, and with This is how it works . . .
success evolves into the commercial group, by means of In every J CPT package during 1999 you will find a membership form (your
timely infusion of seasoned managers, and perhaps reassign- mailing label will appear on the right side). Photocopy this form and pass it out
ment of the more easily-bored researchers
to as many of your colleagues as possible. Have all of the forms returned to you
The last ideal follows the observation that is easier to instill
operating discipline into a formerly freewheeling research group, and send them to us at once.
than it is to impose radical new technology on an existing opera-
tion. The best place to make converts is at cult headquarters.
Your incentive is the prizes . . .
Mail or fax us five new members’ applications (with payment) and we will
immediately REWARD you with a Petroleum Society Stainless Steel Travel
Was There Any Life Before SAGD? Mug.
It remains mystifying that enthusiasm for vertical/thermal tech- - OR -
nology should exist at all in Canada: not because of SAGD’s Mail or fax us ten new members’ applications (with payment) and we will
promise, but rather because of the failure of California-style tech- immediately REWARD you with a Petroleum Society Golf Shirt.
nology to address the vast bulk of Canadian heavy resources, - OR -
despite several decades of effort and hundreds of millions of dol- Mail or fax fifteen new members’ applications (with payment) and we will
lars. The two vertical projects in Figure 1, essentially the only immediately REWARD you with a Petroleum Society Denim Shirt. For com-
successes to date, generated marginal economic returns from the panies interested in becoming a corporate member, call us and we will fax
cream of reservoirs. Should we hope for reservoirs that fit a you a corporate membership application. Upon receiving the completed form
known technology, or should we build technologies that fit our (with payment) we will immediately REWARD the corporate representative
known reservoirs? with a Petroleum Society Denim Shirt.
All members participating in this membership drive will be entered into a draw for a
REFERENCES GRAND PRIZE (prize to be announced at a later date) to be awarded at the end of 1999.
1. 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. DONNELLY, 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. EDMUNDS, N.R. and GITTINS,S.D., Effective Steam Assisted
Gravity Drainage to Long Horizontal Well Pairs; Journal of
Canadian Petroleum Technology, Vol. 32, No. 6, June 1993.
CERI
7. EDMUNDS, N.R., Investigation of SAGD Steam Trap Control in 1/ page
Two and Three Dimensions, CIM/SPE 50413; I n t e r n a t i o n a l
Conference on Horzontal Well Technology, Calgary, Nov. 1 – 4,
4
1998.
8. I T O, Y., and S U Z U K I, S., Numerical Simulation of the SAGD 3 1/3 x 4 7/8
Process 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 University
NEW CAMERA READY
of Chicago, 1962.
11. KUHN, T.S., The Structure of Scientific Revolutions; The University
ATTACHED
of Chicago, pp. 149-150, 1962.
12. HENDERSON, R., and CLARK, K., Architectural Innovation: The
Reconfiguration of Existing Product Technologies and the Failure of
Established 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?; Journal
of Canadian Petroleum Technology, Vol. 37, No. 6, June, 1998.�

January 1999, Volume 38, No. 1 17