OSPAR Provides Big Opp for TORR/RPATrends, industry and economic factors
Produced water (“PW”), a generic term used for saline water that is brought to the surface with
oil and gas recovery, is co-produced during the recovery of oil and represents the most abundant
fluid in the world’s oil fields. The ratio of water to oil in oil producing countries varies
significantly. The ratio is relatively low (under 2:1) in some major oil producing countries such
as Saudi Arabia, and relatively high (over 8:1) in other countries such as the USA.
Based on published data for the year 2000 for global oil production, the total volume of produced
water generated on a worldwide basis is estimated by the Canadian Clean Technology Institute
(“CCTI”) to be approximately 83 billion barrels per year (approximately 3 barrels of produced
water for every barrel of oil).
The estimated industry expenditure to treat the 83 billion barrels of produced water generated
worldwide is US$40.0 billion annually. This represents nearly 14% of all expenditure worldwide
on oil production, estimated at over US$285 billion annually.
In North America, approximately 24 billion barrels of produced water are co-produced annually.
Due to this immense volume, handling cost and environmental impact, produced water has to be
either re-injected or discharged.
In the case of discharging the produced water into the sea, global environmental regulations
require Oil & Gas producers to remove almost all (below 30 ppm and sometimes as low as 10
ppm) oil contaminants from the produced water. Similarly, when the produced water must be reinjected,
by law and/or to create pressure in the well, most of the oil contaminants must be
removed in order to eliminate technical, environmental, and economic problems.
There are more than 20 conventional technologies that aim at removing contaminants (and in
particular hydrocarbons) from produced water. There are several manufacturers competing in the
market for each and every technology.
North Sea
The North Sea is a promising market for TCI technologies in the short and mid-term horizons.
Since the beginning of year 2005 TCI has marketed directly to customers with operations in the
North Sea.
The North Sea has been a major oil producing region since its first significant production in the
mid 70’s. In 2002, the North Sea produced approximately 5.8 million BPD of oil. Of this, the UK
accounted for 2.5 million BPD which represented nearly 8% of the world oil production. Since
the 70s, the North Sea has been a key factor in increasing non-OPEC oil production, particularly
over the last 20 years with the availability of improved technologies.
Although the North Sea has been officially designated as a declining market for oil production, it
is an expanding market for TORR Canada. As wells age, there is an increasingly higher volume
of water extracted along with the bitumen. Therefore, the need for produced water treatment
increases, providing a valuable opportunity for a technology like TORR™. The estimated
production volume of produced water in the North Sea varies widely and could be as high as
14,500 million barrels per year shared almost equally between the UK and Norway.
Until the beginning of 2006, the regulatory limit for the discharge of produced water into the UK
North Sea was 39 ppm of oil in water. The actual average discharge in 2002 reached an average
of 20.5 ppm across the industry. Under the new OSPAR Convention (OSPAR being The Oslo
Paris Convention for the Protection of the Marine Environment of the North-East Atlantic which
was signed and ratified by EU member states and Switzerland in 1992, and came into effect in
March 1998), all offshore oil tonnage discharged into the North Sea must, by the 1st of January
2006, be reduced by a factor of 15% when compared with 2000 levels. The discharge limit
cannot exceed 30ppm. This directive, monitored and regulated by the UK Department of Trade
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and Industry on a company-wide basis, has placed pressure on oil operators to find effective and
economical solutions to produced water problems.
Due to extended pressure exerted by Operators in the UKCS (United Kingdom Continental
Shelf), the Department of Trade and Industry in the UK revised the effective implementation
date for the OSPAR regulations to January 1, 2007. This modification was granted primarily to
provide the Operators with more time to install the appropriate corrective measures to ensure the
regulations are met. It is clear from the official data published in 2004 that the required
improvement of 15% was still a major challenge for the Operators as they had only obtained an
overall improvement of 3.1% at the end of that year.
The implementation of these new discharge regulations in the North Sea, set by the OSPAR
Convention, should create opportunities for TCI in the upcoming years. Recently, TCI
technologies have seen a significant increase in interest since a very limited number of
technologies can deal with this new regulation.
1. 4 Business Overview
TCI is dedicated to providing water treatment solutions to the oil and gas industry. Its vision is to
be a “reference” in the markets it serves.
TCI designs, develops, manufactures and commercializes its proprietary Total Oil Remediation
and Recovery ("TORR™") system and Reusable Petroleum Absorbent ("RPA®") cartridge
technologies to separate oil and water in produced water generated by oil and gas production.
In January 2006, after over two years of actively working at commercializing the TORR™
system to upstream Oil & Gas producers, the strategic plan was revisited.