The production of oil and gas has historically been based on the principle of P (i.e., moving a fluid by inducing a pressure difference). This is accomplished by drilling a well and exposing the reservoir to low pressure, which causes the fluids to flow into the well bore. If reservoir pressure is sufficient, the fluids will flow to surface.

The size of the oil sands resource in Canada, estimated at approximately 1.7 trillion barrels of oil in place, has attracted interest for decades. Commercial surface mining was initiated in the 1960’s, and commercial in situ development commenced in the 1980’s. The in situ projects were based on Cyclic Steam Stimulation (CSS), which utilizes injection of steam under high pressure followed by production of the fluids by artificial lift. Thus, the early development of in situ bitumen production followed the same principle of P, or push/pull, for production of the reservoir fluids.

The development of SAGD was predicated on using gravity to induce flow. The fluids are then artificially lifted to surface or reservoir pressure is raised, by steam injection, to the point where the fluids flow to surface. Thus, for the first time in the production of conventional and unconventional petroleum resources, the P paradigm was replaced by the mechanism of gravity drainage.

The establishment of the Alberta Oil Sands Technology and Research Authority (AOSTRA), a government organization responsible for funding research in Oil Sands, was the key link in the transformation from concept to implementation. AOSTRA constructed the Underground Test Facility (UTF) in the 1980’s to specifically test the SAGD hypothesis. The success of UTF Phases A and B provided a ‘proof of concept’ that SAGD could achieve lower steam:oil ratios (<3.0:1) and much higher production rates (>750 barrels/day) than competing in situ technologies. In addition, the production was sustained for a long period of time (measured in years) with little or no decline.

Following the success of the UTF, it took industry about 10 years to analyze the publicly available data and implement pilot projects before proceeding with large scale (>20,000 barrels/day) SAGD schemes. Thus, where high capital costs and associated risks are involved, a significant time lag between ‘proof of concept’ and commercial implementation is to be expected.