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In Canada, Miniature Heavy-Oil Sites Overcome Slump in Crude Prices

EDAM, Saskatchewan—In a muddy field where rows of canola stood just three months ago, a miniature oil-sands plant is rapidly being assembled by a small crew of workers. What’s unusual about this project is the speed with which it is being built—in a matter of months—and its compact, football field-size. Oil-sands sites typically take years to build and require hundreds or thousands of acres of land. At a time when slumping crude-oil prices have shelved most new oil-sands projects in neighboring Alberta and halted drilling for all but the most productive shale oil wells in the Bakken formation on both sides of the border, pint-size sites are proliferating in Saskatchewan’s oil patch. About a mile away from the construction site, down a rural highway in western Saskatchewan, three other similarly size heavy-oil projects are rising on a landscape filled with cattle pastures and duck ponds. The miniboom along Highway […]

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Suncor launches hostile bid for Canadian Oil Sands

Steve Williams, president and CEO of Suncor Energy Inc., speaks at their annual general meeting in Edmonton April 29, 2014. Suncor Energy Inc launched a hostile bid for Canadian Oil Sands Ltd on Monday as the slump in oil prices encourages consolidation in Canada’s oil sands industry, which has some of the world’s highest operating costs and lowest prices. Canadian Oil Sands and Suncor are among stakeholders in Canada’s largest synthetic crude project, Syncrude, in northern Alberta. Alberta’s oil sands are the world’s third-largest crude reserves after Saudi Arabia and Venezuela and a leading source of U.S. crude imports. Suncor’s all-stock offer for Canadian Oil Sands is valued at about C$4.3 billion ($3.29 billion). Suncor shares were down 2 percent at C$34.67 and Canadian Oil Sands shares were up 48 percent at C$9.15 on the Toronto Stock Exchange on Monday morning. Canadian Oil Sands was not immediately available for […]

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Oilsands may face severe water shortages, Athabasca River study suggests

The study also confirmed that overall flows in the Athabasca River are declining. That’s something that was already known and thought to be mainly because of the melting and shrinking of glaciers, seen in this photo of the river’s headwaters. (David Sauchyn) The river that provides water to the oilsands industry is much more prone to multi-year droughts than modern records show, suggesting that the industry’s current level of water use may not be sustainable, a new study suggests. The oilsands industry needs 3.1 barrels of fresh water to produce a barrel of crude oil from oilsands mining and 0.4 barrels of fresh water to produce a barrel of crude oil from oilsands drilling, according to the Canadian Association of Petroleum Producers . That water comes mainly from northern Alberta’s Athabasca River, and oilsands account for 72 per cent of estimated water use from the river. The government regulates […]

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Suncor’s Fort Hills Deal Shows Slump Hitting Oil-Sands Assets

Suncor Energy Inc.’s bargain on a further 10 percent stake in its Fort Hills oil-sands project shows how the energy market crash is reducing asset values in one of the most expensive places on Earth to extract crude. Canada’s largest energy producer will pay Total SA C$310 million ($234 million) for an additional 10 percent share in the C$15 billion oil sands mine being built in northern Alberta, the companies said Monday. That’s less than a third of the value Teck Resources Ltd., another partner in the project, ascribes to its stake. Teck said its 20 percent is worth C$2.3 billion in a July release. The deal is also 31 percent less than the C$450 million Desjardins Capital Markets assumes a 10 percent stake in Fort Hills is worth. Desjardins based its estimate on a reduced long-term U.S. oil price of $80 a barrel starting in 2017, Justin Bouchard, […]

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Alberta Regulator Allows Cnooc Oil-Sands Plant to Resume Full Production

CALGARY, Alberta—The Canadian unit of Chinese state-controlled energy giant Cnooc Ltd. CEO 2.76 % said Wednesday that it can resume full production at a troubled oil-sands operation after regulatory authorities eased a suspension order that had crimped its output. Cnooc subsidiary Nexen Energy ULC said Alberta’s chief energy regulator amended an order that threatened to shut down its 50,000 barrel a day Long Lake heavy oil extraction facility located in the province’s northeastern boreal forests. “Nexen is able to resume 100% of our operations” at its Long Lake oil sands plant, the company said in a statement. The Alberta Energy Regulator imposed the order late last month for suspected failure to comply with certain rules, effectively rendering the plant inoperable. The AER scaled back that order earlier this month [Sept. 6], which allowed Nexen to operate at three-quarters of its previous production levels. It further revised the order on […]

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Canadian Oil Sands Not Planning to Sell Future Production

Canadian Oil Sands Ltd. isn’t planning to sell future royalty production after considering the option, a company spokeswoman said. Canadian Oil Sands has enough liquidity to survive a period of low oil prices, Siren Fisekci, a company spokeswoman, said in a phone interview on Tuesday. The company isn’t pursuing any other plans at the moment to raise capital and isn’t for sale, she said. Management of the largest owner of Syncrude Canada Ltd. spoke with Holder Highfields Capital about selling some future production for upfront payment to help boost the company’s flagging shares, the Wall Street Journal reported earlier. The oil-sands producer in January cut its dividend the most since 1998 to cope with sinking crude prices. Shares of Canadian Oil Sands have declined 38 percent this year. The stock rose 3.7 percent to C$6.50 at 2:44 p.m. in Toronto.

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The Oil-Sands Glut Is About to Get a Lot Bigger

The last place oil producers want to be when prices plummet to profit-demolishing lows is midstream on a billion-dollar project in one of the costliest parts of the planet to extract crude. Yet that’s exactly where half a dozen oil sands operators from Suncor Energy Inc. to Brion Energy Corp. find themselves with prices for Canadian oil now hovering around $30 a barrel. While all around them projects have been postponed or canceled, their investments were judged too far along when the oil game suddenly moved from offense to defense. These projects will add at least another 500,000 barrels a day — roughly a 25 percent increase from Alberta — to an oversupplied North American market by 2017. For companies stuck spending billions in a downturn, the time required to earn back their investments will lengthen considerably, said Rafi Tahmazian, senior portfolio manager at Canoe Financial LP. “But the […]

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Cnooc Canadian Oil-Sands Plant to Shutdown Amid Pipeline Probe

CALGARY, Alberta—The Canadian unit of Chinese state-controlled energy giant Cnooc Ltd. CEO 0.69 % said Wednesday it will halt production at a 50,000 barrel-a-day oil-sands plant indefinitely as part of its effort to comply with an order from regulators forcing it to shut down pipelines at the site. The move comes after the chief energy regulator in the Western Canadian province last week suspended operating licenses affecting 95 pipelines at Cnooc subsidiary Nexen Energy ULC’s Long Lake heavy oil extraction facility in northern Alberta for suspected failure to comply with certain rules . Shutting down Long Lake is the latest in a string of setbacks at the plant , which started up in 2008 but has never reached its capacity of 72,000 barrels a day. The loss of output is a blow to parent company Cnooc, which bought Nexen for $15 billion in 2013 and installed its own management […]

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Production Woes at Oil-Sands Giant Syncrude to Impact Full-Year Output

By Chester Dawson CALGARY, Alberta– Canadian Oil Sands Ltd., the largest owner of the giant Syncrude oil-sands project, said Wednesday that production of synthetic crude would be "minimal" for two weeks after a weekend fire at Syncrude’s main plant, and that the lost production would impact its annual output. The company halted production after a blaze on Saturday damaged equipment at its Mildred Lake strip mine’s crude processing facility in northern Alberta. The loss of some 200,000 barrels per day of output has contributed to a sharp spike in prices of Canadian synthetic oil this week. "Syncrude plans to implement a phased recovery strategy with minimal synthetic crude oil shipments and operating rates for the next two weeks, " Canadian Oil Sands said in a statement late Wednesday. Production is expected to return to more normal levels at the end of the month, it said. The company said that […]

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The World’s First Clean Oil Sands Project: An Interview With Dr. Gerald Bailey

After decades of exhaustive attempts to overcome the dirty reputation of oil sands, we finally have an environmentally-friendly and low cost method to tap into these vast resources in the state of Utah—good news both for Mother Nature and all oil and gas investors. MCW Energy Group’s CEO, former Exxon President of the Arabian Gulf region, Dr. R. Gerald Bailey, tells Oilprice.com in an exclusive interview that his hunt for an innovative technology that simultaneously makes money and cleans up the environment is over. The race to capitalize on Utah’s vast oil sands resources is on, and only the ‘clean’—both financially and environmentally—will survive. Coming hot off of the successful launch of clean oil sands operations in Utah, while other oil sands projects are under fire from protesters, Dr. Bailey discusses: • The difference between Utah and Alberta when it comes to oil sands resources. • How new technology […]

Posted On : Published By : Tom Whipple