CALGARY — The first phase of Imperial Oil Ltd.’s Kearl oil sands mine will cost $2-billion more than previously expected as the company faced issues transporting Korean-made modules to the mine site in northern Alberta and contended with harsh weather during startup.
The first 110,000-barrel-per-day phase will now cost $12.9-billion, up from a previous estimate of $10.9-billion.
Taking into account a second $8.9-billion phase in the works, the whole development is expected to have a cost of $6.80 per barrel, up 10% from a prior estimate of $6.20.
Imperial Oil Ltd said on Monday its expects its $12.9-billion Kearl oil sands project to begin operating within the next two weeks, more than three months past its original target, but the company cannot yet say how much oil the plant will initially produce.
Pius Rolheiser, a spokesman for Imperial, said operations at the first of Kearl’s three production trains, capable of handling up to 50,000 barrels of heavy oil sands crude per day, will begin by month’s end.
CALGARY • Imperial Oil Ltd. will have to scale back plans to double production by the end of the decade if planned oil pipelines are delayed, its new CEO said Thursday.
But Richard Kruger, the Minnesotan who took the controls of Canada’s oldest oil company on March 1, said he’s confident that Keystone XL from Alberta to the U.S. Gulf and other proposed pipelines to Canada’s West and East will go ahead.
CALGARY – Upgrading plants, a refinery-like jumble of vessels and pipes that convert thick bitumen into lighter oil, were once a fixture of mining projects in northern Alberta. Now a new generation of oil sands production is leaving them behind.
After cancelling or delaying more than US$100-billion of processing capacity at the onset of the financial crisis in 2008, energy players are counting on major pipelines to transport growing volumes of less processed diluted bitumen to refineries in the United States that are better equipped to handle the extra-thick crude.
Imperial Oil Ltd has upped its cost estimate for the Mackenzie Gas Project in Canada’s far north by about 40% because of rising prices for materials and labor, meaning the entire project would cost more than $20 billion if it goes ahead.
Imperial, 69.6% owned by Exxon Mobil Corp, said it has still not decided whether to proceed with the long-delayed project given the weak state of the North American natural gas market.
Imperial Oil Ltd. has applied for regulatory approval to build a new oil sands project northeast of Fort McMurray, Alta., which would cost an estimated US$7-billion.
Company spokesman Pius Rolheiser emphasized the price tag is “very preliminary” and there’s a good chance it could change as engineering work proceeds.
“As project definition advances and as market conditions evolve, obviously it has the potential to impact the cost estimate,” he said.
CHRISTINA LAKE, Alberta – After two years of study, President Barack Obama this week defined the criteria for what will be one of the signature decisions of his presidency: the proposed Keystone XL pipeline that would carry heavy crude from here to American refineries must not “significantly” worsen global warming.
Anticipating that standard, Canadian oil companies have embarked on a race to develop cleaner technologies that will make their production less damaging to the environment.
Kurt Wulff (McDep Associates) submits: We recommend current purchase of the common stock of Imperial Oil (IMO) for unlevered appreciation potential of 51% to a McDep Ratio of 1.0 where price would equal Net Present Valu
CALGARY — Alberta’s Energy Resources Conservation Board said on Wednesday it expects output from the province’s oil sands to double to 3.8 million barrels a day by 2022.
The board, which regulates the province’s oil and gas industry, said it expects oil sands production to hit 3.8 million bpd in nine years, up from 1.9 million bpd in 2012.