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Room for big and small in oil sands Suncor Energy rolls out plans for 46 percent hike in production, applying new technology; newcomer North Peace makes initial public offering to support Peace River plans Gary Park For Petroleum News
The veteran is pushing ahead with expansion and the newcomer is testing the market with an initial public offering, as the oil sands keep rolling regardless of doubts hanging over the Alberta government royalty review and the prospect of tougher environmental regulations.
Oil sands pioneer Suncor Energy has taken the first formal step towards a 120,000 barrel per day expansion of its 260,000 bpd operation as it prepares to break with almost 40 years of traditional mining methods.
At the other end of the scale, North Peace Energy became the latest entry to the sector as it embarked on fund raising through an initial public offering of shares to support development of 3.1 billion barrels of bitumen resource in northwestern Alberta.
The Suncor project, called Voyageur South, is a key part of the company’s plans to achieve crude production of 500,000-550,000 bpd by 2010-12.
What makes the plan especially interesting is Suncor’s introduction of a new technology, replacing the use of trucks and mechanical shovels to mine bitumen and deliver it to an upgrader.
After more than a year of commercial-scale testing at a cost of about C$100 million, Suncor is confident the mobile ore preparation method can reduce noise pollution, air emissions (notably nitrogen oxide) and the workforce.
Other technological advances Suncor hopes to introduce are new methods to advance tailing reclamation and reduce water inventories, while improving heat integration and extraction processes that could lower energy consumption and greenhouse gas emission intensity.
More information this summer At this stage, Suncor has released only a public disclosure document.
By the time it is ready to file a formal regulation application this summer, it expects to have completed a full assessment of the technological advances and have a preliminary cost estimate for the expansion.
Chief Executive Officer Rick George said investing in new technology is a “key to ensuring oil sands development provides economic benefits in a responsible manner.”
He said Suncor is working closely with stakeholders to minimize the significant pressures the pace of oil sands development is placing on the community and the environment.
“Our work has only just begun, as we continue to refine these technologies with a goal of advancing the oil sands industry while minimizing the footprint of development,” he said.
Pending regulatory approval, Suncor is targeting a construction start in 2009 on an expansion that is expected to have an operating life of 40 years.
North Peace has no staff, production North Peace is entering the field with no staff and no production, but a large land holding, which it started to assemble in late 2005 and has been drilling delineation wells since mid-2006.
Chief Executive Officer Louis Dufresne, while trying to put together the pieces of a company, has been relying on consultants who are experienced in cold flow heavy oil, such as the BlackRock Ventures’ Seal project acquired last year by Shell Canada for C$2.4 billion.
Cold flow involves conventional oil wells that need less time and money to achieve production than thermal projects that inject steam to melt the bitumen and force it to the surface.
North Peace is now planning a 20-well program starting this fall, but is not yet in a position to set a capital budget, although Dufresne said he has had no difficulties raising C$12 million in non-brokered private placements.
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