To make heavy oil a commodity on par with lighter crude, producers must transform the resource into something refiners can process. Although heavy oil is more difficult to process than conventional crudes, it can be upgraded with available refining technologies to improve transportability and increase value. The main product of the upgrading process is synthetic crude oil (“SCO”), which is a light (high API degree) sweet (low sulfur content) feedstock that generally does not contain any of the heavy resid fraction. The SCO is shipped to refineries to be refined further into jet fuels, diesel, gasoline and other petroleum products.

In Canada, all of the mined bitumen (approximately 40% of Canada’s heavy oil production) is upgraded to SCO. In 2008, Canada produced approximately 700,000 bbl/d of SCO. According to forecasts, SCO output in Canada is expected to increase to approximately 2 million bbl/d by 2017.

The PetroBeam process can significantly reduce the capital intensity of upgrading heavy oil. By pre-treating the feedstock with the PetroBeam process an upgrader could expand its coker capacity by approximately 30% at a capital cost of roughly $3,000 per bbl/d.