Canadian Manufacturing

Leaks at Canadian Natural's Primrose property 'solvable': president

Steve Laut said faulty wellbores led to leaks at property near Cold Lake, Alta.; will inspect old wells



CALGARY—The president of Canadian Natural Resources Ltd. says bitumen leaks at its Primrose oilsands project are “totally solvable” and that the cleanup there is about 80 per cent complete.

The company is convinced that the only way the emulsion of bitumen and water could have seeped to the surface is through faulty wellbores at the property near Cold Lake, Alta., Steve Laut said.

“This is a technical, operational challenge that is totally solvable,” he said on a conference call with analysts.

Laut provided the update on the same day Canadian Natural hiked its dividend by 60 per cent, posted stronger third-quarter earnings and announced it plans to increase capital spending next year.

So far, the Alberta Energy Regulator has not come to the same conclusion as Canadian Natural about what’s behind the Primrose problems, which were made public in late June.

A probe is underway into the root cause.

Following a similar event in 2009 at Primrose, the provincial energy watchdog raised the question of whether geologic weakness could be to blame, rather than faulty wellbores.

But Laut said there are three major geologic formations that should prevent fluids from escaping to the surface when Canadian Natural injects steam deep into the underground reservoirs.

“To date, we have not seen any evidence that would indicate any other possible route to surface” than through an old wellbore, he said.

Laut added the company’s conclusion “is sound and it is governed by rock mechanics and the basic laws of physics.”

Canadian Natural says it has identified four legacy wells that are the likely culprits behind the leaks.

It has found mechanical failures in two, is in the process of reviewing one and waiting to get approval to access the site of another.

Canadian Natural has determined there are 31 old wells throughout the site that could pose a risk, although they meet regulatory requirements for abandoned wells.

Of those, 16 are within one kilometre of areas where Canadian Natural intends to inject steam underground next year.

The steam is used to soften the bitumen so it can flow to the surface in a method called high pressure cyclic steam stimulation.

So far, Canadian Natural has fixed one of those wells, confirmed that another is okay and will check the remaining 14 once it is able to access those locations.

Laut says the company also intends to enhance monitoring, so it has an early warning if something is amiss underground.

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