Oil and Gas Sector in Lloydminster

The Region's most recent growth is associated directly with Oil & Gas. The success of development in oil production has been the economic driver of the region for several decades. Husky Oil began production in the regional oilfield in 1946.

Husky Oil’s refinery came online in 1947 and in 1992, a $1.6 billion plant was completed to upgrade crude oil. Currently the Husky Energy Upgrader is capable of producing 77,000 barrels of synthetic crude per day. According to Husky Energy, the plant is producing 82,000 barrels per day because of efficiencies in technology.

Oil related companies within the region account for over 4000 employees; this driving force of the economy has a direct impact on manufacturing, transportation, drilling, oilfield services and production.

According to Dr. B. Dusseault, professor of Geological Engineering, Earth Science Department at the University of Waterloo and Deputy Director of the “Porous Media Research Institute,” “the Lloydminster area is going to be experiencing continued robust growth for many years, certainly well beyond my lifetime.”

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Lloydminster & the Future of Heavy Oil

Heavy Oil has been very good to Lloydminster, particularly in the last twenty years. Lloydminster has also been good for heavy oil. Many new technologies have been developed in this region and many more have been attempted and abandoned. Failures are a part of the learning process, and major new successes have taken place. “Big Oil” is no longer ignoring “Heavy Oil,” they understand the vital role heavy oil will play in the next few generations. We should also understand this because business, political and environmental decisions depend on it.

The rate of increase in conventional oil production worldwide is slowing down, and many experts predict the peak will occur in the next five years. As a result of this, there has been a dramatic recent upsurge in heavy oil and oil sands development. But, just how much heavy oil is there in the world?

There is 2.5 – 3 times the amount of viscous oil as there is conventional oil. Conventional oil is soon going to peak, slowly decline and then heavy oil and oil sands will make up most of the difference. In fact, if we extract 30% of our viscous oil in Canada, it will be enough to meet 100% of current Canadian and USA needs, about 20 million barrels per day, for over 100 years.

Alberta Energies and Utilities Board predictions suggest that both heavy oil and oil sand production will triple over the next 10 years. The major limitation on production capacity right now is the lack of sufficient upgrading capacity in North America. There is about 850,000 b/d of heavy oil and bitumen produced, and over 80% of this is shipped to the USA as a raw, diluted crude oil for upgrading. We are now at maximum upgrading capacity and need more upgrading capacity for more growth.

The Lloydminster area has been the focus of Cold Heavy Oil production with many technologies being successfully developed in the region. Perhaps most important was the development, here in Lloydminster, of processing cavity pumps that can tolerate extremely large amount of sand and viscous oil. These pumps are now being shipped around the world, wherever there are large volumes of sand in heavy oil.

The drilling of long, horizontal wells at shallow depth was perfected in the 1980’s and the early 1990’s in the greater Lloydminster Region.

There are many other new technologies in various stages of development that started here in the Lloydminster area. Including down hole electric drive PC pumps, computer optimized production management, high temperature pressure sensors, pumps that can directly extract 55% sand from the well, new work over approaches such as foam and pump to surface methods, new oil-water-sand separators technologies, new methods to increase well flow rate, improvements in upgrading and so on.

There are many emerging technologies in upgrading that will reduce the cost per barrel in the future. These huge facilities are cheaper to develop as well as more efficient. The Lloydminster Husky Energy Upgrader consistently operates at over 110% of its design capacity.

Lloydminster may be a small city, but the region has played a huge role in the development of technologies that are now spreading around the world.