How Shell First Tripped Over Saskatchewan's Oilsands
Robert Gies //Market Commentary // June 4, 2007
http://www.dobmagazine.nickles.com/columns/column.asp?article=magazine%2...
When I was only eleven years old, growing up in Hamilton, Ontario, I knew instinctively that I would have a career in the petroleum industry as a geologist. I know that sounds a bit strange but it turned out that way. I enjoyed hard rock geology and mineralogy. However, even Frank Beales' droning on in his lectures about "clean washed sandstones" never discouraged me from getting into the oil biz. Ruth and I were married in my fourth year at University of Toronto and upon graduation I chose a job as exploitation engineer with Shell. My interests were always on the technical side of the business and Shell was very much focused upon applied technology.
With Shell I had many interesting adventures and experiences throughout the industry and in many areas of North America. If I could relate just one interesting experience, it occurred in the early 1970s while I was involved with Shell's tar sands project. Shell had pioneered much of the early heavy oil technology at that time. One day I came across a short article written in 1954 by a professor with the University of Saskatchewan, the well-liked Walter Kupsch, in which he referred to the occurrence of large blocks of tar sand deposited in the glacial till near Peter Pond Lake. The article was entitled "Bituminous Sands in Till of Peter Pond Lake Area, Saskatchewan". It was published by the Saskatchewan Department of Mineral Resources as Report 12, I believe.
At that time there were no known tar sand outcrops in western Saskatchewan since the entire region is covered by glacial till deposits, and no drilling had ever taken place there. Having been involved in delineation drilling Shell's large and rich tar sand deposits now being mined near Ft. McMurray, I thought this was quite interesting. I decided to go and sample these blocks of tar sand described in the literature. After digging most of the day my assistant and I were unable to locate the tar sands using the map provided by the professor and were about to give up.
Late that afternoon however a thunderstorm was coming our way so we decided to move the float plane for protection to a cove across the lake to ride out the storm. While waiting there for the storm to pass, I spotted a man at the top of a hill and decided to go and talk to him about tar sands in the area. It turned out that he was a native Indian who was building himself a home. He claimed that he didn't know of any tar sands but he appeared worried about who we were. I told him I was with Shell and why I was there, and gradually gained his confidence. I really enjoyed listening to him talk about this area. He then took a tattered paper from his wife's purse which he claimed gave him the right to build a house there. I convinced the man that I was not going to turn him in or anything like that and then he took me out behind his home to show me a huge pile of tar sand that he had dug up while preparing the foundation for his house. It was a complete surprise!
Being familiar with the nature of the Ft. McMurray tar sand deposits I was able later to determine that these deposits were quite different and therefore they did not represent glacial transported blocks of tar sand from the Fort McMurray tar sand outcrops along the river as proposed by professor Kupsch, but they were evidence of entirely new and unknown deposits. For one thing, the clay clasts were calcitic whereas the clay clasts in the Ft. McMurray area are not.
The result was that Shell leased about two million acres along both sides of the Alberta/Saskatchewan boundary for less than $50,000. It was a big event at the time and was covered in Oilweek magazine and even announced in the provincial parliament that Shell was moving back into Saskatchewan in a big way. Old prospectors and local people contacted us to tell us about other oil indications in the area that they had observed many years ago. That winter Shell undertook a multi-well exploration drilling program.
The effort turned up fresh tar sand deposits on both sides of the border trapped in the same McMurray sands, as well as oil seeps. I thought at the time that the heavy oil was preserved in local basins created by dissolution of deeper salt beds associated with proximity to the up-dip outcrop. It is important to remember that the outcrop region of sedimentary basins represents the last a major barrier to updip oil migration because oil is not buoyant in the porous air-bearing sediments above the water table in the outcrop region. Updip oil migration stops at the water table. Hence the large heavy oil deposits associated with sedimentary basins is various parts of the world.
I left Shell in 1977 after 20 years and joined a small upstart oil and gas company named Canadian Hunter for the next 14 years. Then in 1992 I started my own consulting company which I still operate. It turned out that after I left, Shell decided to drop its Saskatchewan tar sand leases. (big mistake!).
Today the same area is under intense development in Saskatchewan by a company called Oilsands Quest. Inc. which appears to be having great success in delineating rich tar sands deposits. The company holds many townships of leases. There are no doubt other oil exploration opportunities in this subcrop region of the basin.
Robert Gies is a consulting geologist in Calgary (rmge@telusplanet.net)
