Heavy Crude Oil - Economics

Economics

Heavy crude oils provide an interesting situation for the economics of petroleum development. The resources of heavy oil in the world are more than twice those of conventional light crude oil. In October 2009, the USGS updated the Orinoco deposits (Venezuela) recoverable value to 513 billion barrels (8.16×1010 m3), making this area the one of the world's largest recoverable oil deposit. However, recovery rates for heavy oil are often limited from 5-30% of oil in place. The chemical makeup is often the defining variable in recovery rates. Technology utilized for the recovery of heavy oil has steadily increased recovery rates.

On one hand, due to increased refining costs and high sulfur content for some sources, heavy crudes are often priced at a discount to lighter ones. The increased viscosity and density also makes production more difficult (see reservoir engineering). On the other hand, large quantities of heavy crudes have been discovered in the Americas including Canada, Venezuela and California. The relatively shallow depth of heavy oil fields (often less than 3000 feet) can contribute to lower production costs; however, these are offset by the difficulties of production and transport that render conventional production methods ineffective. Specialized techniques are being developed for exploration and production of heavy oil.