Manitoba’s oil industry has lately enjoyed a resurgence, with production from new fields and horizontally drilled wells raising production in 2007 to around 22,000 barrels per day.
However, statistics show that in recent years, the industry has had to work harder to raise production because the easiest and best-producing deposits are drying up.
In 1969, Manitoba was producing 17,000 barrels per day from 754 wells. The production curve fell sharply over the following decade to its lowest point of 9,400 barrels per day in 1981.
Despite almost doubling the number of wells during the late 1980s, output hit a plateau in 1986 of 14,000 barrels per day from 1,300 wells.
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During the 1990s, production gradually fell back to 10,000 barrels per day in 1999 from 1,246 producing wells.
Oil production set a record in 2007 coming from 2,576 wells, almost three times the number pumping crude in 1969. The 58 new horizontal wells accounted for 30 percent of production last year.
In a news release last week, Manitoba’s energy minister Jim Rondeau painted a rosy picture of the industry’s renewed fortunes.
“The benefits from our oil industry have grown considerably and this year we have seen dramatic increases,” he said.
Rondeau expects 350 new wells will be drilled in 2008.
With oil at $100 per barrel, Manitoba’s eight million barrels per year are worth $800 million. The spike in global oil prices has benefited the industry, which took in $603 million last year, and spent $361 million in the process.
Since 2004, almost 1,400 new wells have been drilled in Manitoba with 63 percent of them in the Sinclair field. Other areas with significant drilling include Virden, Daly, Pierson, Waskada, Whitewater and Regent.
The Virden field accounts for almost 60 percent of total historical production of 253 million barrels.
Compared to global petroleum production and consumption, at roughly 86 million barrels a day or 31 billion barrels a year, Manitoba is a small regional player. The province produces no natural gas and imports about 75 percent of its petroleum needs.
Manitoba’s water cut, or the amount of salt water mixed in with the oil that must be separated, is roughly 90 percent. The oil quality is high, with the light sour blend crude fetching good prices, but only 15 percent of the oil in a typical well can be recovered.
Early wells in the Virden area produced under natural reservoir pressure. Now, with water flooding technology already in use in more than half the province’s wells, recovery may increase to 30 percent. Also, an experimental carbon dioxide injection technique being tested may further raise recovery levels.
Keith Lowdon, director of the province’s petroleum branch, said although Manitoba’s oil industry is relatively small, it remains an important part of the economy, particularly in the southwestern corner where it has created 1,500 new high-paying jobs.
The only oil-bearing sedimentary rock formations known to exist elsewhere in the province are the Hudson Bay lowlands, which remain largely unexplored, said Lowdon.
“It’s pretty difficult. It’s way up there and there are all kinds of issues to be dealt with. Although there’s been some oil shows in wells drilled years and years ago, we really don’t know,” he said.
“(Oil) would have to be found there in quantities that warrant getting it out of there.”
