Canada's oilsands activity percolating

Canadian oilsands action continues to percolate.

Shell Canada Ltd., Calgary, will build a $1.8 billion (Canadian) oilsands upgrader plant in Alberta as part of an oilsands development program.

In addition, Mobil Oil Canada Ltd., Calgary, is considering an oilsands upgrader.

The company is looking at several possible sites, including Edmonton, an oilsands lease north of Fort McMurray, Cold Lake, or the Hardisty area-which is a major pipeline junction.

Mobil is continuing initial research for a $1 billion oilsands extraction plant with construction scheduled for 2000 and completion 3 years later.

Petro-Canada Ltd., Calgary, is also considering additional investment in oilsands. The company will conduct additional seismic tests and core drilling north and south of Fort McMurray. It will decide by mid-1998 if it wants to increase its participation in the area. The company has interests in leases covering about 283,000 acres.

Syncrude Canada Ltd. and Suncor Inc., the established oilsands operators in the Fort McMurray region, recently disclosed projects to double their production.

Meanwhile, Solv-Ex Corp., Albuquerque, has accepted an offer to buy 75% of its oilsands project in northern Alberta.

Shell plans

Shell Canada last spring disclosed it will develop an oilsands lease 43 miles north of Fort McMurray and a pipeline to the Edmonton area. The upgrader, which will double the size of the Shell refining complex at Scotford, northeast of Edmonton, is the third element in a $3.2 billion project, subject to regulatory approvals. Australia's BHP Petroleum Pty. Ltd. is a partner in the mining project.

Shell said the upgrader will process 140,000 b/d of bitumen, and the oilsands slurry will be refined in Alberta or at Shell's Sarnia, Ont., refinery.

Construction on the upgrader is scheduled to begin in 1999. The plant will use a hydrogen-addition process for breaking down bitumen.

Solv-Ex deal

In the Solv-Ex deal, Justice Gregory Forsyth ordered that the potential buyer not be revealed by lawyers attending court proceedings to avoid affecting negotiations for a deal. Solv-Ex is operating under court protection from creditors in the U.S. and Canada. Closing date for the sale is Dec. 15.

United TriStar Resources Ltd., Toronto, which holds a 10% interest in Solv-Ex, said there is an offer to buy 75% of the company. Geopetrol Resources, Calgary, a private investment firm, confirmed that it is likely to buy a 75% interest in Solv-Ex, subject to certain conditions. Solv-Ex is expected to retain 15% of a restructured operation.

Solv-Ex produced test amounts of oil at a partially completed plant 56 miles north of Fort McMurray this year and had announced plans for an 80,000 b/d operation, subject to funding.