Canada: FMC's Overview Of Significant Developments In The Canadian Energy Industry - November 2010

Last Updated: December 20 2010

Article by Doug Black Q.C., Anne Calverley Q.C., Douglas E. Crowther, Bill Gilliland, Alex MacWilliam, Rich Miller, Claude Morency, Cyrus Reporter, Ron Stuber and Helen T. Newland

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.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions