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MINING.com

MINING.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

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Despite Low Oil Price New BP Oil Sands Project Begins Operations

Sunrise Energy Project

Aerial view of Sunrise Energy Project. (Image courtesy of Husky Energy)

Energy giant BP (NYSE:BP) and partner Husky Energy (TSX:HSE) announced Friday they’ve kicked off operations at their Sunrise oil sands in Alberta, Canada, a project expected to have a lifespan of 50 years with an initial capacity of 60,000 barrels per day.

“Sunrise first steam is a landmark for us in 2014, our sixth major project start-up this year, our very first in-situ oil sands operations and a long-life asset which should give us steady production for decades,” said Lamar McKay, chief executive of BP Upstream.

Related: US Supreme Court Rejects BP Appeal

The long-term plan for Sunrise involves three phases of development growing production capacity to 200,000 barrels per day.

Husky operates Sunrise and its partner operates the jointly owned BP-Husky Refinery near Toledo, Ohio, where output from the project will be processed into various transportation fuels, the companies said.

Low prices effect? Negligible, says the Royal Bank

ICE January Brent, the international oil marker, dropped $1.12 cents to $62.54 a barrel on Friday. Nymex January West Texas Intermediate, the U.S, benchmark, plummeted further below $60 a barrel — down to $57.67.

According to the Royal Bank of Canada (RBC) the price slump won't impact Canada's production. The country, it says, is likely to keep pumping out just as much — if not more — oil as it has been doing of late, at least in the short term. However, the lender warned that the value of those exports, in dollar terms, will be much lower, so any growth is going to have to come from somewhere else.

Related: Big Oil Slashing Spending Amid Low Prices

In its latest market outlook, RBC says its outlook for Canada is based on the fact that the decline in oil prices and any weakening of investment in the oil and gas industry will be offset by increased demand for Canada's non-energy exports.

According to the bank’s senior economist Craig Wright, the net impact of lower oil prices on a national level will be negligible in terms of real GDP in the year to come.

By Cecilia Jamasmie

Source - http://www.mining.com  

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