Canada's Imperial Oil is preparing to launch the first new oil sands development in five years in Alberta, the company, which is a subsidiary of Exxon, said in a statement.
The US$1.98-billion (C$2.6 billion) Aspen project will have a capacity to produce 75,000 bpd of heavy crude and, the company said, will utilize cutting-edge oil sands recovery technology. The aim of the tech is to reduce water use and emissions while "improving development economics."
The decision to go ahead with such a solid investment comes as Albertan oil producers continue to suffer the consequences of insufficient pipeline capacity that have pummeled the price of Canadian heavy crude: the discount of Western Canadian Select to WTI at more than US$45 a barrel, after slumping to more than US$50 a barrel earlier this year.
Imperial Oil, however, is confident this is the right time to launch the project. "This is the right technology at the right time to make a competitive investment. We have made the decision to proceed now because we believe this advanced technology will further the evolution of Imperial's oil sands business."
Construction of the project will begin before this year's end and first oil is slated for 2022, Imperial Oil said, adding that there will be an option to expand the capacity of Aspen by another 75,000 bpd if the conditions are right.
The announcement is the latest demonstration of how important new technology has become for the oil industry, especially high-cost segments such as oil sands. Indeed, as the Aspen project suggests, some new developments would not have seen the light of day were it not for a major push into better-and more cost-efficient-extraction technologies.
Imperial Oil also has an expansion project on its plate, at its Cold Lake project. The company said during its third-quarter conference call it planned to boost production at Cold Lake to 50,000 bpd.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More