Total pulls out oil sands stops
Total, Europe’s third-largest oil producer, plans a two-stage, 200,000 barrels-per-day oil sands upgrader near Edmonton in a bid to head off looming shortages of construction labor and materials as companies scramble to develop oil sands projects in Alberta.
The pressures will lead to higher costs, Chief Financial Officer Robert Castaigne told a conference call with analysts, but added: “I don’t think it’s anything we won’t be able to solve.” Total plans to invest up to US$15 billion expanding its presence in Canada, including the upgrader to turn raw bitumen from its Joslyn and Surmont projects into synthetic crude.
Total’s Canadian subsidiary is currently awaiting the results of an engineering study that will provide estimated costs and design of the upgrader, including the size of the first phase, which has been tentatively estimated at 130,000 bpd and due for completion by mid-2013.
Total Canada President Michael Borrell told the Calgary Herald that the best way to mitigate construction costs is to “plan, engineer and factor in the current market conditions. We are doing a full plan and our pre-engineering work will also look into contracting and labor strategies.”
Total feels it has a built-in edge because of its global experience with megaprojects, including LNG in Qatar and its heavy oil work in Venezuela.
—Gary Park
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