The subject Request for Proposal (RFP) is being sent to you for consideration as either a potential supporter or performer of the project outlined in the attached. If you believe that this work is of potential value to your organization and wish to have the option to either evaluate, direct, fund or perform the project, please fill out the attached expression of interest form and return it as soon as possible, but no later than May 11, 2004. If you wish to be considered as a potential performer, please also submit a Preliminary Proposal no later than May 17, 2004.

This RFP is a direct result of recommendations contained in the AERI/PTAC Spudding Innovation Report (http://www.ptac.org/inn/dl/innp0301.pdf). Funding has been approved in principle from the Alberta Energy Research Institute (AERI) as part of the EnergyINet initiative in Natural Gas and Conventional Oil Recovery (NGCOR). Additional funding may be secured from other government organizations or industry.

PTAC, with financial and technical support from both industry and government, intends to utilize the following process to launch this project to meet the needs outlined in the subject RFP:

1. Issue RFPs to potential supporters and project performers by April 19th, 2004.
2. Determine which organizations will consider provision of support and which organizations have submitted preliminary proposals by May 17th, 2004. This will be based on the Expression of Interest forms and preliminary proposals that are received.
3. A Reservoir Recovery Working Group including potential supporters will review and screen preliminary proposals by May 24th, 2004. We encourage potential performers that can meet a portion of the need outlined in a RFP to make integrated proposals with appropriate co-suppliers. Potential supporters of this project will decide at the conclusion of the preliminary review, which performers will make formal presentations. A formal presentation meeting will be scheduled for detailed proposals no later than June 7, 2004. Selection of the successful performer will follow shortly thereafter.
4. Finalization of project work scope by June 20, 2004.
5. Finalization of financial commitments/project launch by June 30, 2004.
   PTAC will not screen, evaluate or make decisions on what will proceed. The project funders will make such decisions.

The RFP and related non-proprietary information on project status will be available on PTAC's website at www.ptac.org or from raggarwal@ptac.org or call 403-218-7711.

PTAC's mandate is to facilitate collaboration on R&D in the conventional oil and gas industry through leveraging intellectual and financial resources. Collaboration results in more effective problem-solving, better identification of opportunities and improved quality of new R&D at a minimum cost to participants.

The Energy Innovation Network
(EnergyINet - http://www.aeri.ab.ca/sec/EIN/index.cfm) is an evolving vehicle for collaboration among industry, federal and provincial governments, research providers and not-for-profit groups to achieve a shared vision of an abundant supply of environmentally responsible energy, creating economic prosperity and social well-being for Canadians.

Purpose

The purpose of this RFP is to initiate a project that will provide a detailed business case for increasing recovery factors and recoverable reserves of conventional oil and gas in the Western Canadian Sedimentary Basin (WCSB) through research and technology development, demonstration and commercialization.

This business case will be used to develop technology roadmaps, influence industry and government research and development (R&D), including but not limited to such initiatives as pilot projects and university research chairs, and also serve as a basis for developing the Energy Innovation Network (EnergyINet) Program in Natural Gas and Conventional Oil Recovery (NGCOR).

Background

In late 2003, PTAC released a report for the Alberta Energy Research Institute (AERI), in support of the development of the NGCOR EnergyINet Program, entitled “Spudding Innovation”. One of the key recommendations of this report was the creation of a detailed business case for increased oil and gas recovery for the WCSB using new innovations and R&D. The specific Alberta goals identified were additional recoverable reserves of 5 billion barrels of conventional oil and 25 TCF of conventional natural gas by 2015 attributable to new R&D.

Also identified was the WCSB goal of recoverable reserves of 100 TCF of unconventional gas over the same time frame. This will be the subject of a separate initiative to follow.

For a copy of the “Spudding Innovation” report, please see http://www.ptac.org/inn/dl/innp0301.pdf or call Brenda Belland at (403) 218-7712.

Additional information on the EnergyINet can be found at http://www.aeri.ab.ca/sec/EIN/index.cfm.

Scope of Work, Deliverables and Direction

• This project will confirm the specific major pool incremental recovery factors and recoverable reserve volumes believed attainable through a major pool or pool type review.
• This project will identify the respective types of innovations, enhanced recovery techniques or R&D that are needed to increase these two goals for each major pool or pool type and why. This includes identification of gaps or needs for new technology and an estimate of the associated recoverable reserve prize.
• This project will quantify the recovery factor and recoverable reserve goals by pool or pool type including pool operator where possible.
• This project includes the application of specific existing commercial technologies to pools or situations where commerciality of the technology has already been previously demonstrated. It also includes upgrades or modifications to existing technologies or application of existing technology to new pool types or situations.
• This project will include a phased approach with appropriate milestones, advisory group meetings and related interim payments.
• Project performers will work under the general direction of an advisory group composed as part of the Natural Gas and Conventional Oil Recovery Energy Innovation Network Program (NGCOR EnergyINet) under the umbrella of the Energy Innovation Network initiative.
• The total project cost estimate should include a breakdown for Alberta, BC and Saskatchewan, since there is a variety of potential government funding sources.

Project Performer

The project performers should be experts in Western Canadian oil and gas reserve evaluation, reservoir and production optimization, new technology evaluation and application and business development with a comprehensive team and extensive industry track record.

Potential performers should include a description of their recommended approach to solving the problem, the resources that they will bring to bear including individuals' backgrounds, milestones, meeting schedules, costs, when they can start the project, and what we will receive in the final product. The proposals should also indicate how changes will be handled to the study.

Project proposals will be kept confidential to the Advisory group members for the duration of the competition. The final project results will be widely publicized to industry, government and academia with facilitation provided by PTAC on behalf of the NGCOR EnergyINet and potential funders.

Timing

The project results should be available within approximately 120 working days of an anticipated contract award date of June 30th, 2004. The completion date is anticipated to be October 31, 2004.

Process

• Interested performers will submit up to a 5-page proposal to PTAC for review by the Advisory group.
• The Advisory group will then meet with selected potential performers to allow a 2- way exchange of questions and dialogue. This may result in amendments to the scope of work.
• Once funding is in place and the contract is awarded then periodic meetings will be held as required between the performer and the Advisory group.
• The project results and report will be presented to the Advisory group for review, upgrades or clarifications as required and final acceptance.
• The final report and related presentation will be made by the project performer to anyone interested at a PTAC facilitated information session with a question and answer period following.
• The project performer will be selected based on meeting the need outlined in the RFP and the lowest cost proposal will not necessarily be selected.

Proposals should be submitted electronically to Ralf Aggarwal of PTAC at raggarwal@ptac.org no later than May 17th, 2004. Technical questions should be emailed to Dr. Tom Harding at tharding@ucalgary.ca or Eric Lloyd at elloyd@ptac.org.