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Sault firm developing prototype of a mobile oil-retrieving unit.

Sault frim developing prototype of a mobile oil-retrieving unit

A Sault Ste. Marie firm is on the threshold of an undertaking which promises to change the economics of oil production.

With the help of a $76,000 FedNor grant, Great Lakes engineering Ltd. has been able to build a prototype mobile oil-retrieving unit capable of pumping oil from shallow, low-volume wells.

According to company president David Dewar, the Sault Ste. Marie firm has purchased the world-wide manufacturing and marketing rights to the pumping system invented by Joe Klaeger of Hondo, Texas.

Great Lakes Engineering provides inspection, consulting services to the oil and gas industry, and has been highly vulnerable to the ups and downs of the oil market, explained Dewar. It has been difficult for the company, which has offices in Sault Ste. Marie and Edmonton, to make long-range plans and long-range commitments to employees.

When operating at full capacity, the company employs between 25 and 50 people, 85 per cent of whom are located in the Sault.

The beauty of the new unit, which is being developed through a newly formed marketing company, Oil Retrieval Inc., is its resistance to market fluctuations, said Dewar. He expects the unit will provide a stable revenue source for the company, even when oil prices are low.

There are currently nearly a half million stripper wells - shallow wells which produce less than 10 barrels of crude oil per day - in the United States alone. Last year 20,000 of them were plugged because the cost of retrieval - approximately $13.50 per barrel - did not allow well owners to realize a profit.

Dewar estimates that the retrieval costs of between $2 and $3 per barrel with

the new unit will make the operation economical even if oil prices drop to a low of $13 per barrel.

The mobile pumping unit will be tractor- or truck-mounted and will retrieve oil from a well in eight to 10 minutes. The technology has been demonstrated to a depth of 1,000 feet, but the Great Lakes prototype is designed to pump oil from depths of 3,500 feet.

Construction of the prototype began during the first week in June, shortly after the company received word of approval of the FedNor money.

"Without that funding, we would not have been ablt to proceed," admitted Dewar.

China Steel Inc., also of Sault Ste. Marie, is fabricating the prototype. Dewar describes it as "quite an impressive unitc and a "monster" which will be mount on a 70-hp, four-whee- drive Kabota tractor, with a large telescoping boom on the top. Inquiries have already been received for an optional medium-duty-truck mount which would be more practical for retrieval from widely spaced wells.

The company's intent is to construct a unit which is as maintenance-free as possible. The unit price will vary, depending on options and depth requirements, but will range from $110,000 to $135,000 U.S. per unit, Dewar estimates.

He is optimistic that the units will be manufactured locally.

"If we're able to prove the technology and come up with a reasonably marketable price for the structure, it will be done here in Sault Ste. Marie."

While he is not yet in a position to speculate in detail about the long-term impact of the company's expansion, Dewar sees "tremendous potential." In addition to manufacturing and marketing, ancillary services such as personnel trainning will provide employment opportunities.

Between 50,000 and 60,000 stripper-well owners in the U.S. and Canada have already been contacted, and the response has been very encouraging. In addition, interest has been expressed from the U.S.S.R., Argentina, Brazil and the West Indies.
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Title Annotation:Great Lakes Engineering Ltd.
Author:Dunning, Paula
Publication:Northern Ontario Business
Article Type:company profile
Date:Dec 1, 1990
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