PKI Producer Working Group

Well Test Flare Plume Monitoring Projects

2002 Environmental Forum**
January 29 and 30, 2002

Soil and Groundwater Forum**

CO2 Miscible Flood Feasibility Study November 14, 2001 TIS*

COURSE 2002 Competition

Production Field Multiphase
Measurement TIS*

Crude Oil Document Exchange (CDOX)
November 1, 2001TIS*

Hydrocarbon Reservoir Evaluation –
November 20, 2001 TIS*

Canadian Technology Transfer Agent

PTAC’s Board of Directors recommends that a joint task force, with representation from the oil and gas industry and the Alberta government, be created to develop and implement an oil and gas technology development incentive program for the Province of Alberta. Creating such a program should result in improved financial performance for industry and government over the long-term, as new technology will be developed that increases recovery of oil and gas in the province.

Current estimates by the Alberta Energy and Utilities Board (EUB) show there are 44 billion barrels of oil (72% of the original oil in place) and 78 tcf of natural gas (31% of initial gas in place) in existing reservoirs which will remain in the ground unless new technologies are employed. The window of opportunity to improve recovery through the use of new technology is limited, as the average reserve life index for Alberta oil and gas pools is less than ten years. Once these pools reach the end of their economic life and are abandoned, the opportunity to utilize existing infrastructure and assets together with new technology will likely be lost.

Over the past decade, both the Alberta government and the oil and gas industry have significantly reduced their oil and gas Research and Technology Development (R&D) spending to levels well below that seen in other sectors and countries. A higher level of reinvestment in R&D for the industrial sector that provides a significant portion of Alberta government income is needed.

The Alberta government needs to build on the success of their ongoing energy R&D initiatives with organizations such as the Alberta Energy Research Institute (AERI), Alberta Ingenuity Fund and Alberta Geological Survey (AGS).

Industry needs to support the development of new technology to solve problems and unlock opportunities that are unique to their assets in Alberta. They also need to share the cost, risk, and the revenue reward of technology development with the Alberta government. Oil and gas producers, suppliers of technology, government, researchers and inventors all need to work together in the process of innovation to create value for all Albertans. There are clear examples in oil and gas and other industries, that illustrate how value can be created for all involved if a concerted effort is made to develop and implement technology specific to a particular industry.

To accomplish this task, PTAC is recommending the use of the "Roadmap Process (vision, purpose, beliefs, principles, goals, strategy, tactics)" for this task force.

If you are interested in participating on the task force or being kept informed as this initiative proceeds, please contact:

PTAC will host a Drilling Waste Management Forum on Wednesday, December 5, 2001, facilitated by the Canadian Technology Transfer Agent (CTTA) program. The Forum will highlight a minimum of eight non-proprietary presentations on Drilling Waste Management practices and allow time for questions and answers. Potential topics include: Self-Contained Systems, Thermal Remediation, Alternate Mud Systems, New Fluid Systems, Drilling Systems, Temporary Receiving Sites, Solids Controls, Onsite Recycling, Fluid Extraction, and Soil Remediation.

If you are interested in making a presentation that you believe would be of interest for a second forum or for the Frontier Drilling Waste Management Forum being planned for early 2002, please provide an executive summary of the presentation to PTAC by December 10th, 2001. All presentations must be co-sponsored by a producer or end-user willing to lend their company name to verify that the presentation is "worthy of consideration in the Oil and Gas Industry."

To register for the December 5, 2001 forum, or to obtain additional information, visit PTAC’s website at www.ptac.org/techdrlf.html or contact:

Two new Flaring projects have resulted from the Well Test Plume Monitoring Request for Proposal (RFP) issued earlier this year. This RFP was issued under the direction of the PTAC Flaring Technical Steering Committee (FTSC) to address the following:

To review the RFP please visit PTAC’s website at www.ptac.org/techenvr.html To obtain more information on the projects, contact:

PTAC will host the 2002 Environmental Research and Development Forum for the upstream oil and gas industry on January 30-31, 2002.

Close to forty speakers will report on joint R&D initiatives funded by a variety of organizations including: Canadian Association of Petroleum Producers (CAPP); industry; governments of Alberta, Saskatchewan and British Columbia; and the Canadian and American federal governments. An estimated 350 participants will hear from funding organizations, government agencies and industry representatives regarding their forward view of future research priorities.

For more information please visit PTAC’s website at www.ptac.org/techenvf.html or contact:

PTAC hosted a Soil and Ground-water Technical Forum on October 18th, attended by 50 people with a mix of participants from industry, government and funding organizations.

The Forum was the first of this kind hosted by PTAC featuring technical presentations and allowing ample opportunity for questions and discussion. Participants listened to detailed technical presentations on six current research projects conducted to address ongoing issues and the practical significance of their findings to date. Attendees discussed the implications of these findings for management and current policy as well as an opportunity to provide input into the identification of future research priorities and current gaps.

To view the presentations or the resulting notes from this forum visit PTAC’s website at www.ptac.org/techenvf.html or contact:

At PTAC’s September 13th, 2001 Public Key Infrastructure (PKI) Planning Session, Bill Melvin from e-Scotia delivered a presentation defining PKI and describing what a single PKI and Certificate Authority could accomplish for the energy industry.

PKI is an enabling technology solution for secure and authentic electronic communication and, according to Melvin, is fully scaleable across all business verticals. As part of a total security initiative, PKI promotes the ability to create trust in trading communities and offers benefits like enable-ment, cost-savings, supply-chain management and secure e-mail. E-purchasing, and Volumetric and Infrastructure Petroleum Information Registry (VIPIR) environments are prime examples of the need for secure document exchange over the Internet.

Prior to implementing a single PKI, Melvin advises potential adopters to ask themselves – "What do I want to achieve within my vertical market and beyond my vertical?" Then PKI adopters can define what attributes their companies require for their particular Certificate Authority and begin to build a PKI.

Attendees from producer companies who are historically early adopters of new technologies decided at the September 13th session to create a producer working group. This group met again on October 16th and is currently building the business justification to phase in a security solution like PKI.

PTAC’s e-Business Technical Area continues to be very productive, not only for producers but for solution providers to the energy industry who met to find common ground this fall.

Calgary lawyer John Ramsay, Q.C., LLP, planted the seeds for a networking meeting for senior officers of Calgary-based e-business solution providers with a view to cultivating collaborative provider relationships.

A major driver for this networking initiative is the need to promote interoperability between applications developed by e-business solution providers for the energy industry. Using open standard based technologies like XML (extended markup language) as a common platform for exchanging information, is one way to encourage interoperability. In addition, the group is preparing the strategy for a collective presentation to the energy sector through a future PTAC forum.

Over 20 individuals, representing more than 16 e-business solution providers, met on September 20th. At the second networking meeting on October 16th, group members began working on a web forum, a framework to display group members’ capabilities and strengths throughout an energy company’s organizational matrix, a statement of purpose, and the concept of a future e-business event.

If you would like to know more about e-Business opportunities, browse the PTAC website at www.ptac.org/techebut.html or contact:

The Alberta Energy Research Institute (AERI) will hold its fourth funding competition for new energy research projects at Alberta universities in January 2002. A maximum of $3 million will be awarded for 20-30 projects, with a funding duration of up to three years. The next funding competition will close on Thursday, January 31, 2002.

COURSE was formed in March 1999, as an initiative between the energy resources industry, universities, and government to increase and focus the amount of fundamental energy research being conducted at universities in Alberta. Since its first funding competition in June 1999, COURSE has launched 54 new projects valued at just under $14 million, of which $6.5 million is provided by AERI, with the remainder from industry and other funding agencies.

For further information, please visit www.ptac.org/course1.html or contact:

There are a limited number of openings for industry experts to serve on the 2002 COURSE application evaluation panel. Research expertise or hands-on field experience in one or more of the COURSE funding areas is essential. Preference is given to Canadian and worldwide employees of COURSE member companies.

For further information, please visit www.ptac.org/course1.html or contact:

In October 2000, the Scientific Research and Experimental Development (SR&ED) industry technical working group was set up to help the oil and gas industry understand the regulations govern-ing the federal government’s SR&ED program. Companies can use the generous tax credits provided by the program to leverage spending in research and development activities.

The government hopes that by aggressively pushing for more research and development in Canada, we will improve our competitiveness and, as a result, strengthen our economy. The SR&ED, in place since 1985, now provides about $1.4 billion dollars in tax credits each year to over 12,000 claimants. The program covers all industry sectors, all Canadian incorporated companies, and individuals that carry out R&D in Canada. It is the largest single source of funding of research and development in the private sector. A recent survey of the R&D tax incentive programs of the 30 member countries of the Organisation for Economic Co-operation and Development (OECD) shows that Canada’s program ranks second only to that of Spain.

Since the inaugural session in October 2000, sessions have been held in January, May and September of 2001. Each two-and-a-half hour session addressed a specific technical issue relevant to the program. For instance, in the three sessions held this year the following issues have been covered:

• SR&ED Project Definition,
• Eligibility Criteria for SR&ED, and
• Supporting Information for SR&ED Work.

The initial focus was on small and medium enterprises (SMEs). The group has now brought all segments of the oil and gas industry into the forum – including research organizations and institutions that play a vital role in the industry’s research and development activities. Industry’s interest and participation in these forums has been encouraging. We encourage every company in the oil and gas industry to join the forum. The next session will take place in Edmonton in January 2002 and will focus on treatment of capital equipment under the SR&ED program. Also a spring session will be held, likely in May 2002, to discuss "Shop Floor R&D".

The creation of the SR&ED Oil and Gas Industry Technical Working Group was made possible by the excellent and on-going collaboration between Canada Customs and Revenue Agency (CCRA), Petroleum Services Association of Canada (PSAC), Petroleum Technology Alliance Canada (PTAC) and KPMG High Technology Practice Group. CCRA greatly appreciates the contribution of these partners as well as the support of the many companies who are forum members.

Detailed information on the SR&ED program can be found at www.ccra.gc.ca/sred.html or obtained by contacting:

The Canadian Technology Transfer Agent (CTTA - formerly RTTA) program provides the Canadian natural gas industry with technology transfer capabilities and resources to commercialize technology. This program assists in expanding an economical and environmentally-friendly supply of natural gas for North America.

The CTTA program is sponsored by GTI and managed by PTAC to:

• identify opportunities for technology application,
• assess producer technology needs and facilitate natural gas technology transfer,
• organize and host technology transfer events,
• provide public access to the Technology Centre for Natural Gas,
• provide information and contacts for emerging technologies, and
• identify technological needs and link these opportunities with potential technical solutions.

For further information please visit PTAC’s website at www.ptac.org/press1.html or contact:

TCNG offers non-proprietary information on commercially-available natural gas exploration, production and processing technologies.

For further information visit PTAC’s website at www.ptac.org/tcng1.html or contact:

Brenda Belland
Information Specialist
(403) 218-7712

The TCNG is located in PTAC’s offices:
Suite 750, Hanover Place, 101 - 6th Ave. S.W.
Calgary, Alberta T2P 3P4

At the 2001 Annual General Meeting, the Board was expanded from 18 to 25 members. Welcome to the following new Board members:

• Wayne Finger, Schlumberger of Canada,
• Lorraine Goobie, Shell Canada Limited,
• Derril Stephenson, Vikor Energy Inc., and
• Dean Wall, AMEC Earth & Environmental Ltd.

Laurie Schramm is now President and CEO of the Saskatchewan Research Council (SRC) and will remain on the Board as a representative of SRC.

PTAC continues to grow and we now have 166 members. We welcome the following new members:

• Calfrac Well Service Ltd.
• Cambian
• Envirodrive Inc.
• e-Scotia
• Gas Trak Ltd.
• Intellimarx Distribution Inc.
• Luscar Ltd. - Specialty Products Division
• MGV Energy Inc.
• Non-Elephant Encryption Systems Inc.
• Petro-Geotech Inc.
• Prospectors Corp.
• ProTechnics
• Roughneck.ca
• Rudd Enterprises Ltd.
• The Moorhead Group LLC
• Vikor Energy Inc.
• Weatherford Canada Partnership
• Wellpoint Systems Inc.

For further information, please contact PTAC –

PTAC
Petroleum Technology Alliance Canada
Suite 750, Hanover Place, 101 - 6th Ave. S.W.
Calgary, Alberta T2P 3P4
www.ptac.org

fax: (403) 920-0054

Eric Lloyd
President
phone: (403) 218-7701

Arlene Merling
Director, Operations
phone: (403) 218-7702

Lorie Frei
Administrative Assistant
phone: (403) 218-7700

Tannis Such
Environment, Health and Safety Coordinator
phone: (403) 218-7703

Arlene Merling
Director, Operations
phone: (403) 218-7702

Denis Gaudet
Director, Technology Transfer
phone: (403) 218-7710

Brenda Belland
Information Specialist,
Technology Centre for Natural Gas (TCNG)
phone: (403) 218-7712