Canadian Natural Resources Ltd. is planning a C$6.5-billion (US$4.5-billion) Alberta oil sands project. Canadian Natural Resources plans to develop the huge mining and drilling venture on oil-sands-rich Athabasca region lands acquired with properties it bought last year for just over C$1 billion from BP Amoco Plc. When the company purchased the BP Amoco properties, it was mostly interested in conventional heavy-crude assets in Alberta’s Pelican Lake and Primrose regions, where it plans to spend C$2.8 billion drilling 1,900 wells over the next 7 years.
The oil sands lease, called Mic Mac, is located north of Fort McMurray in Northeastern Alberta, near the vast open-pit mines and big processing plants operated by Syncrude Canada Ltd. and Suncor Energy Inc., as well as a C$4.1-billion project now being built by Shell Canada Ltd., Chevron Corporation and Western Oil Sands Ltd. Canadian Natural foresees output of 300,000 barrels per day from an impressive 3.6 billion barrels of oil sands reserves.
A. Markin of Canadian Natural said Mic Mac would likely be developed using two methods. Two-thirds of the production would come from oil sands mined from an open pit on the lease. The remainder would be recovered using steam-assisted gravity drainage which is also used in heavy-crude oil production.
Improvements over the last decade in technology for mining oil sands, extracting the bitumen or extra-heavy oil and processing it into refinery-ready light crude have lowered costs to where it is competitive with conventional oil, according to Canadian Natural.
Initial studies are to be completed by September, said Canadian Natural. The project would begin production in 7 years, pending regulatory approvals, and would have initial production of 300,000 barrels per day from a combination of open-pit mining and a heavy-oil operation. Markin said a long lead-time is needed on the project because the company has not been involved in oil sands before.
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