The global demand for energy is expected to grow exponentially going forward. However, while the demand for renewable energy is expected to increase significantly by 2030, non-renewable energy will have the major share in the global energy mix. By 2030, gas will be second-largest energy source after oil, with a 30% share in the global energy mix.

Global Energy Mix, 2010–2030

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The demand for oil is expected to grow annually by 1.2% on an average and reach 105 million barrels per day (MMBD) by 2030. The oil industry faces the relentless challenge of meeting such high energy demand, as easy oil extraction is a thing of the past. There are significant oil resources available in the form of heavy oil and bitumen, which require advanced technologies for extraction. There are about 500 billion barrels of extra-heavy oil resources, including oil sands, 50% of these resources are in Canada and the rest in Venezuela, Nigeria, Brazil, and Russia.

Global Heavy Oil and Bitumen Reserves and Production

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Global oil resources are estimated at 9–13 trillion barrels. Of this, 70% is present in the form of heavy oil, extra-heavy oil, and oil sands or bitumen. About 9,000 billion barrels of original oil in place (OOIP) represents heavy oil and bitumen, of which 72% remains in North and South America. The global crude oil reserve is of about 1,700 billion barrels; and more than 50% of it is heavy oil and bitumen.

Global heavy oil and bitumen production is expected to increase from 13 to 18 MMBD between 2015 and 2035. In North America, Canada has 170 billion barrels of proven heavy oil and bitumen reserves in the form of oil sands deposits mainly in the southern part of the Alberta province. The annual production of heavy oil in Canada was of 2.7 MMBD in 2015, which accounted for 14% of global heavy oil production. During the same period, conventional oil production decreased marginally (from 0.78 to 0.75 MMBD). Heavy oil production in Canada is expected to reach 4 MMBD by 2020. The Orinoco Belt in Venezuela has the largest proven reserves (280 billion barrels) of heavy oil, of which only 1.64 MMBD of oil is currently produced. The future of heavy oil and bitumen extraction depends on technological developments.

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Technological Landscape for Heavy Oil and Bitumen Extraction

Heavy oil and bitumen can be extracted using two main techniques: surface mining and in-situ recovery. In-situ recovery can further be classified into two main categories: thermal and non-thermal. Under thermal recovery, there are various techniques that are currently deployed for heavy oil extraction. These include in-situ combustion (ISC), cyclic steam stimulation (CSS), steam assisted gravity drainage (SAGD), and toe-to-heel air injection. Most of these methods are much matured and have been deployed in various heavy oil fields globally. However, while their recovery rates are high, these techniques have a strong negative environmental impact. This makes them less preferred in developed countries.

Non-thermal techniques include cold heavy oil production using sand (CHOPS), vapor extraction (VAPEX), chemical extraction, and miscible liquid extraction. In these techniques, recovery rates are lower compared to thermal techniques. However, these have a smaller environmental impact. These techniques are thus more popular in developed countries such as Canada and the United States (US).

Fig No.2 Heavy Oil Extraction Techniques

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Thermal Extraction of Heavy Oil

In-Situ Combustion (ISC): This method is known as fire flooding and involves the injection of an oxidizing gas (air or oxygen-enriched air) to generate heat by burning a portion of the resident oil. Most of the oil is forced toward the producing well by a combination of gas (from the combustion gases), steam, and water drive. The temperature range for in-situ combustion is 450 to 600 degrees Celsius, which typically burns 10% of the oil. The main drawbacks of in-situ combustion are gravity override, production of toxic gases, and severe corrosion.

Cyclic Steam Stimulation (CSS): In this technique, a certain quantity of steam is injected into the well and allowed to soak for a while in the surrounding reservoir. After some time, the well is put back to production. As the retention time of the steam is high compared to steam flooding, more oil can be recovered using this technique. The quantity of steam required is smaller compared to steam flooding; therefore, the cost of oil recovery is also low.

Steam Assisted Gravity Drainage (SAGD): This process is a type of steam flooding that is increasingly used in horizontal wells. It is mainly used to extract crude oil from oil sands. SAGD requires two horizontal holes to be drilled: one at the bottom of the oil sands and another five meters above the bottom. High-pressure steam is pumped into the higher well, which reduces the viscosity of the bitumen around it and causes it to flow into the lower well, from where it is then pumped to the surface.

The first stage of this process takes about a month as the steam is pumped into the well. The well is then shut down for a few days to allow the heat to disperse. When the well is reopened, oil recovery rates increase and remain high for a few months before declining. This procedure is repeated, and with each repetition, the amount of oil extracted decreases.

Although it increases extraction by a limited amount, SAGD is a particularly attractive enhanced oil recovery (EOR) method as it has a quick payout. While SAGD projects have been carried out in many countries, such as China and Venezuela, the technique is most prominently used to recover oil from Canadian oil sands.

Toe-to-Heel Air Injection (THAI): This technique is a slight variation of in-situ combustion. In this method, a vertical well is drilled at one end of the well, and a horizontal well is drilled at the other end underneath the reserve. Air is pumped through the vertical well, which ignites the oil and creates a wall of fire. The fire reduces the viscosity of the oil and forces it to move toward the horizontal well, where it is pumped to the surface. THAI has the potential to recover 70–80% of bitumen in place, which is much higher than the 20–25% recovery rate in in-situ combustion. Advantages of THAI include lower carbon dioxide (CO2) emissions and a lower operating cost. It also entails low natural gas consumption and requires minimal steam generation and water processing. Moreover, a greater proportion of the reservoir can be exploited with the technology. This method is in the early stages of evaluation, and its commercial viability is unclear.

Non-Thermal Extraction of Heavy Oil

Cold Production of Heavy Oil Using Sand (CHOPS): CHOPS is a technique of heavy oil extraction using sand influx. It was first used in oil sands deposits in Lloydminister, Canada. The technique involves a sand influx being deliberately initiated during the completion procedure and its maintenance during the productive life of the well. Once the sand has absorbed all the oil, it is brought back to the wellhead. The oil is then separated from the sand and later, the sand is disposed. No sand exclusion devices are used in the wellbore and no filters, cyclones, or high-pressure separators are used at the surface. The oil, sand, and gas are separated using various separators and the oil is sent for upgrading into synthetic crude.

Vapor Extraction (VAPEX): VAPEX was introduced by Butler and Mokrys in 1989. A non-thermal heavy oil production method, similar in concept to SAGD, vapor extraction involves the use of a solvent vapor to reduce the viscosity of heavy oil. The injected solvent vapor expands and dilutes the heavy oil by contact. The diluted heavy oil drains by gravity to the lower horizontal well for production.

Many other non-thermal techniques are currently under development and in early stages of pilot testing. Some of these techniques are electro-thermal dynamic stripping process (ET-DSP), electromagnetic heating, and mineral insulated cable heating. These techniques are expected to have high recovery rates and a low environmental impact.


Heavy oil and bitumen production is expected to record a compound annual growth rate (CAGR) of 2–3% between 2016 and 2025. Canada in North America and Venezuela in South America will be the largest markets for heavy oil and bitumen production. The future of heavy oil recovery largely depends on the development of extraction technologies. While traditional methods such as SAGD, CSS, and ISC require high capital expenditure, new technologies such as electromagnetic heating and mineral insulated cables, which are currently being tested, can pave the road for the low-cost extraction of heavy oil. Ultimately, the goal is to decrease the cost of production, considering the volatile nature of crude oil pricing.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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