Thank you, Mr. Chairman.
Good afternoon. Thank you for the opportunity to share, with some pride, some news on the development on the in situ side.
Laricina is an example of a Canadian-founded in situ company, leading in innovation to support the goals of all Canadians: responsibly developing resources, having the needed energy, and providing economic support while also balancing environmental performance.
In situ is the future of oil production in Canada, and it will produce for a long period of time. The International Energy Agency identifies this resource as the largest outside of OPEC.
Think of in situ oil sands or drillable oil sands as the cousin of conventional oil. The footprint of a horizontal well in drillable oil sands is very similar to that of a conventional well. For example, there is the same land surface impact as the resource is drawn upon. However, in return, up to 10 times more energy will be produced.
Unlike the case for many conventional oil and gas projects, given the scale, we can operate using non-potable, non-drinkable water, and we recycle that.
What is exciting, with regard to the question of innovation, is that in the field today we're testing steam and solvent combinations for enhanced recovery that would decrease the carbon footprint per barrel on a full-cycle basis to less than what it is for much of the crude oil imported to the United States.
You might have seen or heard about the recent CBC documentary on oil sands. What this program did not discuss is what drillable oil sands are doing to meet the needs for economic prosperity, energy supply, and responsible environmental performance. I would like to emphasize just how proud you should be of Canadian companies because we are achieving this today. There is more progress ahead, and we are but one example of that.
Laricina is a private company. It was founded by Albertans. I was born in Calgary and educated at the University of Calgary in chemistry, engineering, and business.
In a little more than five years we have positioned projects for development to recover more than 4.5 billion barrels of oil. While that's part of a larger in situ development, the project we're bringing on stream is focused on carbonate oil sands, in addition to innovating both economically and environmentally. With respect to the community, we do look at it as jobs, but we do make contributions beyond simply jobs.
Laricina began steaming at our first SAGD, or steam-assisted gravity drainage, project in December 2010 after five years of delineation, studies, and research. The Grosmont formation is a carbonate reservoir that is dolomite. This is unlike the sand reservoirs that are mined in Fort McMurray and is more like the large carbonate oil reservoirs of the Middle East.
The ERCB has identified more than 400 billion barrels of bitumen-in-place, or 25% of the bitumen resources for Canada. It is a material growth opportunity for Canada. We estimate that in the project area we're focused on, up to 150 billion barrels are recoverable, and that would be incremental to what's considered now.
Carbonate reservoirs have yielded the largest conventional oil fields, and the projects are on the same scale as is Ghawar.
The oil sands are changing. More than 50% of production is from in situ or drillable techniques, and that is the growth area of the future. But just as in the case of unlocking the carbonates, we don't look at just what has been done in the combination of steam and the draining of the reservoir; we look at new opportunities. By adding light hydrocarbons to steam, as I said, we can reduce the potential carbon impacts and at the same time improve the economics.
Laricina has partnered extensively with the University of Calgary as part of our fundamental approach to research and innovation. The technology for drillable oil sands was initiated by Dr. Butler at the University of Calgary in the 1980s. He can be considered the father of SAGD.
We are pushing this further. Laricina chairs a consortium of 16 companies doing fundamental research on solvent-enhanced recovery. Adding light hydrocarbons to steam is nothing new. Thirty years ago, Alberta was leading EOR development in light oil pools using similar additions of propane and ethane in the West Pembina region.
Our focus, notwithstanding we had neither cashflow nor production, has included donations and research of up to a million dollars committed to the University of Calgary. This summer we will have 15 co-op and intern students, which will represent about 10% of our staff complement.
In Wabasca, where our operations are located, we try to play a positive role in the community across the spectrum, from donations and staff time to economic development. We work closely with the Bigstone Cree Nation, Métis Local 1935, and the MD of Opportunity. We chair the local business development group, and we've initiated our first business development plan. That first business, which will be locally owned, will be launched shortly.
This is in addition to nearly $10 million of locally awarded contracts in our construction and operations in the field.
We translate our information. We use newsletters. We have that information presented both in print and visually in Cree.
I believe Laricina is doing what Canada has asked us to do in developing the resources. In return, we look for stability of regulation. We need effective regulation, not more regulation. For illustration, this is the pilot that is 1,800 barrels a day with respect to the Grosmont carbonate, more than two years worth of work in a regulatory environment.
This is directly offsetting a conventional polymer flood of 30,000 barrels a day. This is a code of practice. The in situ is not underregulated in terms of its development. Water management is an important issue. Our projects do not use potable or drinking water. We are in areas where there is no shortage of information. The data is mapped. We have tested, monitored, and put our wells in place prior to production.
Now, like all companies, we must focus on selling our product, and access to Asian markets is an important consideration for the industry. It protects our sovereignty in terms of energy. Market diversity is a very important issue to western Canadian oil producers to offset the single market in the U.S.
I believe Laricina is doing what is asked and needed—investing in innovation and technology, collaborating with researchers, universities, and peers to improve methods of production and environmental performance—and we are proud of the work we do in leading the development of one of the newer emerging assets within the Grosmont carbonate.
Thank you, Mr. Chairman and members of the committee. I would be pleased to speak to you today and answer any questions.