Oil Sands News
1. Petrobank received final Alberta Environment approval for a well pair at the company's Dawson Project, where it utilizes toe‐to‐heel air injection ("THAI"). The Project is believed to hold approximately 203 million barrels of petroleum initially in place. The company believes Dawson could ultimately produce up to 25,000 bpd of bitumen. Petrobank has three projects in Alberta with the combined potential to develop over 125,000 bpd of bitumen production.
1. CNRL has increased production at its Primrose Project, which operates on cyclic steam simulation ("CSS"). The Project's thermal production averaged nearly 85,000 bpd of bitumen during the third quarter of 2010, an increase of 62% over the third quarter in 2009. The company's production at its Horizon Project also increased for the quarter by almost 20,000 bpd of bitumen. At the company's Pelican Lake Heavy Oil Project, production is projected to reach levels of 80,000 bpd of bitumen by 2015, a 100% increase from current production levels.
1. Devon recently reported that its Jackfish thermal bitumen project is nearly complete and is "continuing to trend under budget". The company expects oil will be produced by late 2011 and production will escalate through 2012. Devon has also made applications for regulatory approval for its Jackfish Phase III Project. The company hopes to start production at Jackfish III in 2015, and predicts that its cumulative oil sands production will rise to approximately 150,000 to 175,000 bpd of bitumen by 2020.
1. Suncor recently announced that it had excellent oil sands production in the third quarter, averaging 338,000 bpd of bitumen. Suncor's total upstream production during the quarter averaged over 100,000 bpd higher than the same quarter in 2009. Oil sands production in October averaged 55,000 bpd of bitumen higher than the month‐to‐month average for this year. The company has nearly completed construction on its Firebag Stage 3 in‐situ oil sands expansion project, from which it aims to produce approximately 62,500 bpd of bitumen. Firebag Stage 4 is expected to produce an equal amount, but is in an earlier stage of development.
1. Ivanhoe Energy has made an application for development of an integrated in‐situ heavy oil project called Tamarack. The project is planned to have an ultimate production capacity of approximately 40,000 bpd of bitumen. The company will use 12 well pads and approximately 160 steam assisted gravity drainage ("SAGD") well pairs to produce the resource. Production is anticipated towards the end of 2013 subject to regulatory approval.
1. Husky recently announced that, having received project sanction, it will proceed with the first phase of its Sunrise SAGD oil sands project in northern Alberta. Husky has allocated $415 million in 2011 towards this first phase, with the first $2.5 billion in funding for the project coming from Husky's partner, BP. The Sunrise project is capable of producing up to 60,000 bpd of bitumen, with production expected to commence in 2014.
East Coast News
2. Exploration rights to two parcels of land in the Jeanne D'Arc Basin offshore Newfoundland have been awarded. The winning bids totalled $16.3 million, representing the money the companies commit to spend in the first five years of the nine‐year terms awarded. Husky and Statoil are equal partners in a $15.5 million 74,000‐acre block. Husky also took a 67% interest, and Repsol a 33% interest, in a $1.2 million 345,000‐acre parcel in the basin.
3. 4. Shoal Point has amalgamated with Allied Northern Capital, and the ongoing public company is now called Shoal Point Energy Ltd. Shoal Point is an oil and gas exploration company with a 61.5% interest in an oil‐in‐shale play on the west coast of Newfoundland, as well as a 6‐ 14% interest in a 40,000 acre shale gas and oil play in the Moncton Basin of New Brunswick.
West Coast News
5. CNRL has reported that it has completed its drilling program for its Septimus Montney natural gas project with 20% fewer costs than projected. CNRL further reports that its 50 mmcfpd Septimus gas plant is on budget and is very close to completion. The company estimates that the Septimus project could produce 200 mmcfpd once developed.
Canadian Arctic News
6. The chair of the federal regulator, the National Energy Board (NEB), met with NWT government officials in late November, kicking off the NEB Arctic offshore drilling review. Once the review is complete, three major oil companies, Imperial Oil, ExxonMobil, and BP will begin exploration by way of a joint venture they have formed to avoid duplication of personnel and equipment in the exploration of the offshore areas for which they have secured leases.
Alternative Energy News
5. Capital Power has selected Mortenson Canada to begin work on its 142.2MW Quality Wind Project in British Columbia. Mortenson will erect 79 wind turbines and build 22km of 230kV transmission line and 44km of roadway. The balance of plant engineering, procurement and construction services will be provided by a contractor. When complete, the project will supply electricity to 43,000 homes.
7. GE recently received an order for 55 1.6MW turbines for the Wintering Hills wind farm, which is 70% owned by Suncor and 30% Teck Resources. Delivery of the turbines will begin in the second quarter of 2011. The 88MW project is located near Drumheller, Alberta and at peak operation is expected to generate clean electricity to power approximately 35,000 homes.
8. A $6.2 billion hydroelectric power project planned for Newfoundland and Labrador has begun to receive funding. Emera, an energy services company, will fund nearly $1.8 billion of project costs, with $600 million being put towards a transmission link from Labrador to Newfoundland, and $1.2 billion to the maritime link from Newfoundland to Nova Scotia. Nalcor Energy, a Newfoundland provincially‐owned company, will spend $2.9 billion to build generating facilities at Muskrat Falls.
On the Horizon
Husky announced that it is acquiring a number of assets in Alberta and northeast British Columbia from ExxonMobil for $860 million. The acquisition will add approximately 21,900 boepd to Husky's production totals. The transaction is subject to regulatory approval.
The International Energy Agency (IEA) recently released a report predicting that oil will remain the leading fossil fuel for another 25 years. Oil prices are projected to rise to $113 per barrel by 2035, and overall world daily consumption of oil is expected to reach 99 million barrels. In particular, the report estimates oil sands production could be as high as 4.6 million bpd by 2035.
In this newsletter, all dollar amounts are Canadian dollars unless otherwise stated. We have also used the following abbreviations: bpd ‐ barrels per day; mmcfpd ‐ million cubic feet per day; bcfpd ‐ billion cubic feet per day; tcf ‐ trillion cubic feet; bbl ‐ barrel; mbbl ‐ thousand barrels; mmbbl ‐ million barrels; bbbl ‐ billion barrels; boe ‐ barrels of oil equivalent; MW – megawatts; kV – kilovolt; km – kilometre.
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