Canada's
EnCana to boost oil sands production twelve-fold
AFP
OTTAWA
Petroleumworld.com 11 08 05
Canada's largest oil company EnCana announced Monday it will boost
its oil production twelve-fold to 500,000 barrels per day at its
Alberta oil sands properties in the next decade.
The Calgary-based firm controls 485,000 hectares (1.2 million
acres) in Canada's oil-rich patch in the western province of Alberta
with an estimated five to 10 billion barrels of recoverable oil.
The company currently produces about 42,000 barrels per day.
Increasing production to 500,000 barrels of oil per day, more
than double the company's previous production outlook of 200,000
barrels per day, would require an initial investment of five billion
US dollars and 7.5 billion US dollars more over the life of the
projects, EnCana said in a statement.
"We believe the combination of advances in thermal extraction
technologies and the strengthening of world oil prices have set
the stage for EnCana to generate significant long-term value for
EnCana shareholders through accelerated oil sands investment and
development," said Randy Eresman, EnCana's chief operating
officer.
With some 179 billion barrels of reserves in Alberta's oil sands,
Canada ranks second behind Saudi Arabia in petroleum resources,
but because of the high extraction costs, the deposits were long
neglected, except by local companies.
Since 2000, skyrocketing crude oil prices and improved extraction
methods have made it more economical to exploit the sands and
lured international oil companies such as Total, Shell and ConocoPhilips,
as well as officials from China, the United States, other major
industrialized countries, Kazakhstan and Mexico.
More than 22 billion US dollars have been invested in the past
four years in various oil sands projects.
Europe's largest oil refiner Total SA recently bought Deer Creek
Energy Ltd. and announced plans to invest up to 10.2 billion US
dollars in the oil sands over the next decade.
PetroChina is in talks with Canada's Enbridge to build a two-billion-US-dollar
oil pipeline from Fort McMurray in northern Alberta to the Pacific
Ocean to deliver 400,000 barrels of oil per day to energy-starved
China.
EnCana said it hoped to grow its North American oil and natural
gas sales by 15 to 20 percent between 2006 and 2009.
EnCana's Foster Creek project, its largest and most advanced project,
is in the midst of doubling its planned production to an estimated
60,000 barrels per day by the end of 2006, but has the potential
to grow to 150,000 barrels per day, Eresman said.
The company recently sanctioned an expansion of its Christina
Lake project from 7,000 to 18,000 barrels per day by the first
quarter of 2008, and plans to further boost output to 250,000
barrels per day.
A new project dubbed Borealis located east of Canada's major oil
sands mines has the potential to reach production of 100,000 barrels
per day, Eresman said.
"Combined, these three projects could produce 500,000 barrels
per day by
2015," he said.
EnCana was created by the merger of the former Canadian Pacific-owned
PanCanadian Petroleum and Alberta Energy Co. in 2002. In the past
year, the company has sold nearly all of its international oil
operations to focus entirely on North American natural gas and
oil sands production.
EnCana shares fell 1.61 dollars or 2.88 percent to 54.44 in Toronto
after the announcement Monday.
AFP
11/08/05
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