Devon receives approval for third Jackfish oil sands project

Devon Energy Corp. received regulatory approval from the Alberta Energy Resources Conservation Board and Alberta Environment and Water to move forward with the $1.3 billion (Can.) Jackfish 3 steam-assisted gravity drainage (SAGD) project, 15 km southeast of Conklin, Alta.

The company plans to start construction on its wholly owned Jackfish 3 project in January, with startup targeted for late 2014.

Once fully operational, Devon expects Jackfish 3 to produce an average of 35,000 b/d of bitumen before royalties.

Like the Jackfish 1 and 2 SAGD projects, Jackfish 3 holds an estimated 300 million bbl of recoverable bitumen, Devon said.

Jackfish 1, in operation since 2007, continues to produce near facility capacity while Jackfish 2, which started up in June 2011, currently produces 13,000 b/d net, according to Devon.

Devon expects Jackfish 2 to reach full production capacity of 35,000 b/d in late 2012.

Devon notes that the Jackfish projects are specially designed to use saline water rather than fresh water thus minimizing environmental disturbance.

Also Devon last year acquired 50% of BP PLC’s interest in the Pike oil sands leases, adjacent to its Jackfish leases.

The company said the plan is to develop Pike in multiple phases similar to Jackfish, raising bitumen production from Jackfish and Pike to 150,000-175,000 b/d by 2020 from the current 44,000 b/d.

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