Norwegians regain hope in oil sands
StatoilHydro is open to all options for processing bitumen from its Alberta oil sands operation after shelving plans last year to build a 20,000-barrel-per-day upgrader because of “prohibitive construction costs.”
Eldar Saetre, chief executive officer of the Norwegian major, told analysts Aug. 4 that as costs show some signs of easing his company is pondering whether to weigh plans to build an upgrader against those to export diluted crude or seek refining commitments in the United States.
But StatoilHydro is also still faced with uncertainty relating to the global economy, the outlook for oil prices and a lack of clarity on Canada’s climate-change regulations.
US$70-$80 needed He also said the full cost of building an upgrader requires confidence that oil prices will remain at a break-even level of US$70-$80 per barrel.
“The cost environment in Canada comes from a very heated situation and now we see that the cost is coming down and we think that is extremely important in order to be able to move on with new developments,” Saetre told analysts.
StatoilHydro bought North American Oil Sands in 2007 for C$2 billion, acquiring plans to build an upgrader with initial capacity of 75,000 bpd by 2012 and 250,000 bpd over the long term.
Meanwhile, Saetre said StatoilHydro is “very pleased” with progress on another recently acquired North American holding — Chesapeake Energy’s Marcellus shale gas acreage in the Appalachian region.
Saetre said the deal gives his company access to recoverable resources of up to 3 billion barrels of oil equivalent and future production of 50,000 boe per day in 2012, increasing to 200,000 boe per day by 2020.
—Gary Park
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