Two oil sands ventures make progress

Gary Park

Petroleum News Calgary correspondent

French oil power Total and Devon Energy have confirmed they will join up with ConocoPhillips Canada in a C$1.43 billion oil sands project in northern Alberta, while Devon has filed for regulatory approval of its own venture in the region.

The Surmont proposal by ConocoPhillips is scheduled for first-phase production of 27,000 barrels per day in 2006, growing in stages to 100,000 bpd in 2012.

For ConocoPhillips, the oil sands, including its 9.03 percent stake in the Syncrude Canada consortium, plus its role in the Mackenzie Delta gas development, will eat up the bulk of its expected $400 million capital spending in Canada next year.

Total, with a 43.5 percent interest — matching that of ConocoPhillips — said its entry shows that it recognizes the potential of the Alberta oil sands and its commitment to “participate in the development” of the resources.

Jean-Luc Guiziou, president of Total’s Canadian unit, said “we are very confident that this first phase of Surmont will clear the way for the projected expansion toward full field development.”

Like Surmont, Devon’s proposed Jackfish project will exploit steam-assisted gravity drainage technology with a scheduled start-up in 2007.

The Jackfish application filed with the Alberta Energy and Utilities Board is expected to cost up to C$450 million, have a 35-year operating life and produce a peak 35,000 bpd.

If approvals are received, Devon plans to start drilling wells and building facilities within a year.

Dealing with a growing concern over the use of water in the oil sands region, Devon said it plans to recycle 80 percent to 90 percent of its produced water, while exploring ways of reducing its demand for “make-up” water.