ExxonMobil units eye Alberta oil sands megaproject
Gary Park, Petroleum News Calgary correspondent
Imperial Oil and ExxonMobil Canada — the Canadian arms of Irving, Texas-based ExxonMobil — are jointly working on a possible 200,000-barrel-per-day oil sands operation in northern Alberta.
The two companies have formed an internal team to work on preliminary engineering and environmental work to help assess the viability of bringing the project on-stream by 2012.
Imperial Vice President K.C. Williams told an investment forum in Calgary June 23 that the cooperative efforts could lead to a “significant potential development” of adjoining leases in the Kearl Lake area.
The venture started to take shape last year after a lease-swap by Imperial and Husky Energy that have Imperial full control of property alongside the ExxonMobil Canada lease, where reserves have been tentatively estimated at up to 1.4 billion barrels.
Current plans include drilling this winter to get a better fix on the reserves.
No budgets have been developed, although investment-dealer Peters & Co. calculates the front-end cost of a full mining, extraction and upgrading complex at C$35,000 per barrel of production, which puts the Kearl Lake scheme in the range of C$7 billion.
However, Imperial has the option of using its existing refinery near Edmonton, shipping to an ExxonMobil refinery at Joliet, Ill., or simply selling the bitumen.
Williams said the partners are weighing how much upgrading “makes sense to find our niche in the market.”
Imperial has already got a strong track record in the oil sands region, as a 25 percent partner in the Syncrude Canada consortium, which produces 260,000 barrels per day, and sole owner of the 130,000-barrel-per-day Cold Lake heavy oil facility. Both of those projects are also well advanced on further expansion.
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