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‘Foreigners’ spur Alberta oil sands
Gary Park For Petroleum News
Houston-based ConocoPhillips and Paris-based Total put the Alberta oil sands firmly back on track Jan. 19 by giving the green light to the second phase of their Surmont project.
The 50-50 joint venture will see production increased to 110,000 barrels per day from 27,000 bpd by 2015, employing 2,500 construction workers in the process and eventually tripling the permanent workforce to 300.
The partners did not release cost estimates, but Surmont’s first phase cost about C$1.4 billion to come onstream in late 2007.
Production from the initial phase was about 20,000 bpd entering 2010 and is expected to ramp up over the next few years, said Matt Fox, president of ConocoPhillips Canadian unit.
ConocoPhillips is also a 50 percent owner of the Foster Creek-Christina Lake thermal oil sands project operated by Cenovus, sharing in current gross output of 115,000 bpd.
ConocoPhillips President John Carrig said in a news release that the oil sands are “an area of significant future oil production growth and are important for short- and long-term energy and economic security in North America.”
C$300 million on technology The company has already said it plans to spend C$300 million on heavy oil technology research and development over the next few years to improve economic and environmental performance.
Carrig said his company believes its oil sands projects, along with the conversion of oil sands’ crude into fuel, can be conducted in “an environmentally sustainable manner and that technology will play a significant role in managing the environmental footprint.”
As a result, he said, ConocoPhillips is committed to developing technology that “holds promise for reducing the impacts on air, land and water.”
A ConocoPhillips spokesman said the decision to proceed was helped by company estimates that oil sands capital costs have come down over the past year.
Total also working Joslyn Yves-Louis Darricarrere, Total’s president of exploration and production, said the “responsible development of Canada’s oil sands, particularly with respect to the environment, will be crucial in providing a secure source of energy for the future.”
“Total is pleased to be advancing on this project and plans to bring to it innovation and global expertise in world-class heavy oil projects, while meeting the strict national and international standards for environmental compliance,” he said.
Through its Canadian subsidiary, Total is also planning mining operations at its Joslyn bitumen lease and an upgrader near Edmonton.
The Alberta Energy Resources Conservation Board plans to start hearings Feb. 24 on the 150,000 bpd upgrader facility, which is designed to double in the second phase.
But a final corporate decision by Total won’t come until after the 200,000 bpd Joslyn mine also gains approval, probably in late 2011.
Jean-Michel Gires, president of Total E&P Canada, told the Edmonton Journal his company is making a long-term bet on the oil sands, anticipating an operating life for the upgrader of 30 to 40 years.
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