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Vol. 14, No. 41 Week of October 11, 2009
Providing coverage of Alaska and northern Canada's oil and gas industry

Surmont expansion decision upcoming

According to the new CEO of Total E&P Canada, the decision to build the second phase of the Surmont oil sands project will be made at the end of 2009 or the beginning of 2010. Total is a 50 percent partner in the Alberta project that is operated by ConocoPhillips. Surmont production has been averaging about 18,000 barrels per day for more than a year and is designed to reach 110,000 bpd if the second phase of development is approved.

Jean-Michel Gires, who took the reins at Total in Canada in late August, told the Canadian Press, “We would expect that new phase to be sanctioned either by the end of this year or the beginning of next year.” A steam-assisted gravity drainage operation, Surmont is southeast of Fort McMurray.

Assuming it receives regulatory approval, a decision on Total’s Joslyn North mine, northwest of Fort McMurray, is not expected until oil prices improve.

“Currently, oil at about $60 to $70 U.S. per barrel we think is not enough to justify some of the significant projects we are contemplating, especially on the mining side,” Gires said in a late September Reuters interview. “Eighty dollars to $85 a barrel would be ... the necessary price level we would need. But obviously we are contemplating these projects not only for the next year but for the very long term.”

—Petroleum News



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