AEC, Gulf push heavy oil thermal recovery projects

June 28, 1999
Alberta Energy Co. Ltd., Calgary, will proceed with a $230 million (Canadian) heavy oil thermal recovery project at Foster Creek in northeastern Alberta. Meanwhile, Gulf Canada Resources Ltd., Calgary, says it is seeking partners for heavy oil thermal recovery projects at Surmont in northern Alberta and Kerrobert, Sask. These are the latest signs of increased heavy oil activity with Canadian prices doubling this year to more than $21/bbl (see special report articles on p. 17 and beginning on p.

Alberta Energy Co. Ltd., Calgary, will proceed with a $230 million (Canadian) heavy oil thermal recovery project at Foster Creek in northeastern Alberta.

Meanwhile, Gulf Canada Resources Ltd., Calgary, says it is seeking partners for heavy oil thermal recovery projects at Surmont in northern Alberta and Kerrobert, Sask.

These are the latest signs of increased heavy oil activity with Canadian prices doubling this year to more than $21/bbl (see special report articles on p. 17 and beginning on p. 34).

AEC project

AEC will drill the first of 25 pairs of wells in first quarter 2000 and plans to produce 20,000 b/d from the Foster Creek location by the end of 2001. The company says it is targeting production of 100,000 b/d by 2007.

The Foster Creek property on the Primrose Air Weapons Range near the Alberta-Saskatchewan border will use a steam-assisted gravity drainage (SAGD) production technique.

AEC said total costs could be $1 billion if the location is developed to the 100,000 b/d level. A 2,000 b/d pilot project has been in operation there since 1997. Recoverable volumes with SAGD technology are estimated at 350 million bbl, with operating costs of $4-5/bbl. Several companies, including Suncor Energy, Petro-Canada, PanCanadian Petroleum Ltd., Husky Oil Ltd., and BP Amoco Canada are already producing heavy oil in the area.

Gulf project

Gulf started a pilot project at Surmont in the Fort McMurray area in 1997 that is currently producing 600 b/d of oil.

It is considering a four-phase, $300 million commercial development to increase production to more than 25,000 b/d. Gulf's Kerrobert lease is producing 1,000 b/d, which it wants to double to 2,000 b/d at a cost of $6-8 million.

Gulf also has a 46.7% interest in Petrovera Resources, a joint-venture conventional heavy oil project with PanCanadian Petroleum Ltd. that produces 34,000 b/d. The company has said it could sell its interest in Petrovera within 18 months.

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