Article by Doug Black, Q.C., Bill Gilliland,
Alex MacWilliam, Karim Mahmud, Miles Pittman, Rich Miller, John
Hurley, Cyrus Reporter, Jerry Farrell & Ron
Oil Sands News
The EnCana-ConocoPhillips venture has approved output expansions
at the Foster Creek and Christina Lake oil sands projects in
northern Alberta, parallel with the Wood River refinery project in
the U.S. Bitumen output is planned to grow from the current rate of
70,000 bpd day to 180,000 bpd day by 2012 and 400,000 bpd by 2016.
(See number 1 on map)
Devon Canada Corporation's Jackfish 2 oil sands project has
received regulatory approval and construction is set to begin
immediately. That announcement was made as Jackfish Phase 1 reached
over 15,000 bpd of bitumen on its way to a 35,000-bpd target, which
it is expected to reach in the first half of 2009. The in-service
date of Jackfish 2 is planned for 2012 with a production rate of
35,000 bpd of bitumen. This $1 billion SAGD oil sands project is
expected to recover 300 million bbls of oil during its lifetime.
Since August 2007, Devon's Jackfish project has avoided using
fresh groundwater in its in-situ recovery and is the only SAGD
operation using saline, or brackish, water. (See number 1 on
Athabasca Oil Sands is planning two SAGD pilot projects. The
application for its first project, consisting of 5 horizontal
production wells and associated injection wells in Dover Central,
was submitted in June. Drilling and first steam are planned for
2010 and production is expected to be 2,000 bpd of bitumen. The
second application, for Thickwood, will be filed in October.
Thickwood has a potential of reaching 150,000 bpd of bitumen
production. Athabasca Oil Sands is one of the largest leaseholders
in the Athabasca region, with a 100% working interest in more than
700,000 acres of land. (See number 1 on map)
As part of the conservative election campaign, Prime Minister
Stephen Harper announced that it would look to ban the export of
bitumen to countries that do not match Canadian efforts to cut
emissions of greenhouse gases. Enbridge is proposing to build a the
Gateway Pipeline which will allow bitumen to be shipped to the west
coast and off to Asian markets. Although this announcement caught
Enbridge by surprise, they are confident that this will not affect
the development of the Gateway Pipeline as they are looking at a
very broad market in Southeast Asia and California rather than a
localized China market.
East Coast News
The Canada-Newfoundland and Labrador Offshore Petroleum Board
has reported that Canadian producers were awarded most of the
exploration licences in the Atlantic offshore this week. Together,
the producers have agreed to spend a total of $186 million working
the waters offshore Labrador over the next six years. Husky, Suncor
and Chevron Canada were among the companies which placed successful
West Coast News
British Columbia has raised an unprecedented sum in the fiscal
year which began in April, due to the Horn River gas play in
northeast B.C. $220-million was collected in September from its
sale of oil and gas rights.
Canadian Arctic News
Chevron Canada Limited and BP Canada Energy have entered into a
farmout agreement with MGM Energy to test four distinct play types
in this winter's exploratory drilling program in the Mackenzie
Delta. The wells are subject to partner and regulatory approval and
will cost an estimated $74 million. MGM would like to spud its
first well before the end of December and complete each of the four
wells prior to the end of the winter drilling season in April 2009.
(See number 2 on map)
Imperial Oil executives have recently become increasingly
optimistic about the likelihood of the Mackenzie Gas Project due to
increasing interest from the federal government over the last nine
months. The project is a 1,220-kilometre natural gas pipeline that
would run through the Mackenzie Valley in the Northwest
Territories, connecting northern onshore gas fields with North
American markets in the south. Imperial Oil's capital spending
plan will range between $1.5 billion and $2 billion. Despite credit
woes and dropping oil prices, the company does not foresee that it
will have trouble accessing capital.
Alternative Energy News
Shell Canada has reported that its tree planting program with
Tree Canada Foundation has reached one million trees. The aim of
the program is to sequester over 650,000 tonnes of carbon dioxide.
As part of the commitment Shell made in 2000, contributions have
reached approximately $2 million in funding for the planting of
around 100,000 trees annually across Canada to reduce or offset
greenhouse gas emissions from its main oilsands operations.
On the Horizon
The Canadian Federal Election will be held October 14th.
We'll update you on results in the next issue.
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In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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