Gulf Canada teams up with TotalFina for oil sands

Gary Park

Gulf Canada Resources has inked a deal with French oil giant, TotalFina, to get the money needed to develop a C$1 billion oil sands project in northern Alberta.

Fina Resources, a TotalFina subsidiary, will make a yet-to-be-determined contribution to help Gulf move from a pilot project to a full-scale venture over the next two years.

The target is the Surmont lease, with 15 billion barrels of bitumen reserves, of which about 3 billion are recoverable with current technology.

The objective is a C$300 million first phase producing 25,000 barrels per day, expanding in four phases to at least 100,000 barrels per day.

The pact combines Gulf’s thermal project design expertise and operating capability, using steam assisted gravity drainage to melt the bitumen so it can be pumped to the surface, and TotalFina’s worldwide heavy oil production experience, especially in Venezuela’s Orinico area.

Under the deal, TotalFina will pay for some development activities and earn the right to acquire a 50 percent working interest if the project goes ahead.

The only regulatory obstacle in the way is a decision by the Alberta Energy and Utilities Board on whether independent natural gas production can continue above the bitumen deposits. A verdict is expected by early 2000.

In addition, TotalFina is entitled to a half stake in Gulf’s Kerrobert heavy oil project, which is producing 1,000 barrels per day in Saskatchewan.