Imperial plans $1 billion oil sands expansion


By the OGJ Online Staff


CALGARY, Feb. 20
�Imperial Oil Ltd. said Monday it plans a $1 billion (Can.) expansion of its oil sands operations at Cold Lake, Alta.

It filed a preliminary disclosure document with the Alberta Energy and Utilities Board (EUB) and Alberta Environment (AE).

The expansion would develop an extra 30,000 b/d of bitumen from three new production phases (Phases 14-16) in a new operating area known as Nabiye, which will add 250 million bbl of net proved reserves at Cold Lake.

It also will extend Phases 9 and 10 of the existing Mahihkan operations to an area known as Mahihkan North, adding another 125 million bbl of reserves over the life of the development.

Imperial said it would make formal applications by the end of the year, and assuming the agencies approve them quickly and market conditions remain favorable, Mahihkan North could begin production in 2005 and Nabiye in 2006.

Imperial said the expansions, along with the current development of Phases 11-13 in an area known as Mahkeses, would bring total production to about 180,000 b/d by the end of the decade.

Nabiye would require some wells, associated field facilities, and a plant to generate steam, process bitumen, and treat water.

The Mahihkan North extension would require 600 new wells and other facilities over 5-10 years.

Imperial currently operates 10 phases of bitumen production at Cold Lake. The operation, which produced 119,000 b/d in 2000, is the largest in situ bitumen recovery project in Canada.

In 1999, Imperial received regulatory approval for three additional phases of commercial bitumen production, Phases 11-13, in an area known as Mahkeses. The expansion is under construction and facilities are expected to be operational in late 2002. The Mahkeses expansion will increase bitumen production to 150,000 b/d.

Imperial's investment in the Cold Lake area is $1.7 billion. Construction of the Mahkeses development will add about $650 million of capital expenditures over the next 2 years.

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