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Sunshine rises in oil sands
Canadian startup Sunshine Oilsands is continuing its steady progress towards commercial production that could eventually yield 200,000 barrels per day of bitumen.
The company said C$390 million of its C$430 million capital budget for 2013 will be spent on its West Ells and other oil sands growth projects.
It also confirmed a memorandum of understanding has been signed to share technology with a unit of China’s CNOOC.
Company CEO John Zahary said Sunshine expects the company will complete, commission and start the first 5,000 bpd of two phases of West Ells by the end of this year.
He also said Sunshine plans to move ahead with developments at its Thickwood and Legend Lake leases, with the three projects designed for eventual combined output of 200,000 bpd.
West Ells received regulatory approval a year ago for its initial commercial phases from the Alberta Energy Resources Conservation Board, ERCB.
The project is designed to reach peak production of 100,000 bpd of bitumen using steam-assisted gravity drainage technology, with a productive life of more than 50 years.
Applications before ERCB Regulatory applications are before the ERCB for the first phase of 10,000 bpd at Legend Lake — scheduled for completion by mid-2016 and expected to ultimately yield 50,000 bpd for 23 years — and for the initial 10,000 bpd phase at Thickwood, growing in two more phases to 50,000 bpd.
Sunshine also reported its MOU with China Oilfield Services Ltd., COSL, a unit of CNOOC, to cooperate in developing oil sands exploration technology, which could be used to conduct production tests.
The technology, patented by COSL, is intended to reduce the facility footprint and operation cost for generating steam and other thermal fluids to inject into reservoirs.
Songning Shen, co-chairman of COSL, said the technology has worked successfully in a CNOOC limited offshore project in China and Sunshine believes it could work economically in bitumen reservoirs.
The MOU will be valid for one year and can be extended for another year, unless terminated by either party.
Sunshine holds 1.19 million acres of oil sands leases in the Athabasca region of northeastern Alberta, with eight primary operating regions.
The company’s total 2013 capital spending program is expected to be covered through cash on hand and a C$200 million undrawn bank line.
—Gary Park
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