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Marathon serious about sands
Gary Park For Petroleum News
Marathon Oil Canada is stepping up its presence in the Alberta oil sands by filing an application with the Energy Resources Conservation Board and Alberta Environment for an in-situ operation due on stream in 2016 at 12,000 barrels per day and aiming for an eventual 40,000 bpd.
Approval from the government and the Alberta Energy Resources Conservation Board is expected to take about 18 months, allowing construction to start in the fourth quarter of 2013.
The Birchwood property, acquired from Western Oil Sands in October 2007, has independently evaluated recoverable resources of 100 million to 615 million barrels, based on 100 exploration wells, the filing said.
Marathon said computer simulations and results from other steam-assisted gravity drainage or SAGD projects indicate 60 percent of the bitumen originally in place is recoverable using SAGD technology.
First oil is planned between the first and third quarters of 2016 and the operating life s projected at 20 years.
Marathon said capital costs for the initial phase are estimated at C$510 million, or C$42,500 bpd of production, while annual operating costs are expected to average C$65 million to C$85 million.
Funding from Marathon The Birchwood project will be financed through internal funding provided by parent company Marathon Oil.
Marathon said it is targeting a steam-oil ratio of 3.5 for the first project, within the range of other SAGD projects, and aims to recycle more than 95 percent of the produced water for steam.
The company said the plant will be designed to maximize heat recovery and economize on the use of natural gas.
Vapor emissions will be captured and used as fuel, or reclaimed into the diluted bitumen product.
Marathon owns a 20 percent working interest in the Athabasca Oil Sands Project, operated by Shell Canada with a 60 percent stake, with Chevron Canada holding 20 percent.
Marathon also has ownership interests in 143,000 acres of in-situ leases, including its 60 percent operated Namur project, 33 percent of the Shell-operated Saleski project and 20 percent of the Chevron-operated Ells River project. Recoverable resources are estimated at 1 billion barrels of net bitumen from these projects.
Cenovus seekingpartners Another oil sands project has also entered the regulatory stream, with Cenovus Energy seeking approval for its 90,000 bpd Telephone Lake project to be built in two equal phases, with first bitumen production targeted for 2018.
Since late 2011, the Calgary-based company has been seeking partners, probably from Asia, for Telephone Lake and another project at its Borealis lease.
Meanwhile, the Alberta Energy Resources Conservation Board, citing a complaint from an intervening party, has delayed by seven weeks to July 17 the start of hearings into an application by Osum Oil Sands to own and operate the 35,000 bpd Taiga project in the Cold Lake area of Alberta.
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