Chevron to Participate in Athabasca Oil Sands Project Expansion

abarrelfullabarrelfull wrote on 09 Oct 2012 19:18

Oct. 26, 2006

Chevron Canada Limited, a subsidiary of Chevron Corporation (NYSE: CVX), has elected to participate in the first phase of expansion of the Athabasca Oil Sands Project (AOSP).

This is a 100,000-barrels-per-day (Chevron share, 20,000 bpd) expansion of oil sands mining and upgrading facilities in the Canadian province of Alberta, and it is subject to final regulatory approvals.

AOSP is a surface mining operation currently producing about 155,000 barrels of bitumen per day. It began operations in April 2003. Chevron owns 20 percent of the project

The total capital cost estimate for this expansion is $10 billion US, with Chevron's share at $2 billion. It is envisioned that this expansion will increase design capacity to more than 255,000 bpd in 2010.

"This investment bolsters our global effort to expand production," said George Kirkland, executive vice president, Upstream and Gas, Chevron Corporation. "Chevron has one of the industry's strongest queues of major capital projects to support its long-term growth strategies, and we will be actively working on other opportunities in the Canadian oil sands in the years ahead."

"Chevron is supportive of the AOSP expansion proposal and the efficient development of the reserve's potential," added Mark Nelson, president, Chevron Canada Limited. "Effective project execution will be required in order to maintain schedule and control costs."

AOSP consists of the Muskeg River Mine located in Alberta north of Fort McMurray, and the Scotford Upgrader located near Edmonton. The Corridor Pipeline links both facilities. Chevron owns 20 percent of the project. Shell Canada Limited, operator, owns a 60 percent share and Western Oil Sands L.P. owns 20 percent.

This phase of expansion includes construction of mining and extraction facilities at the Jackpine Mine; expansion of froth treatment facilities at the existing Muskeg River Mine; and expansion of the Scotford Upgrader.

The Jackpine Mine received federal and provincial cabinet approvals in 2004. The Scotford Upgrader expansion received Alberta Energy and Utilities Board approval in September 2006. A regulatory decision on the Muskeg River Mine expansion is anticipated prior to year-end.

Chevron Canada is actively seeking a leadership position in Canadian heavy oil. In addition to its interest in AOSP, Chevron Canada is operator of the Ells River Appraisal Project, which includes more than 75,000 acres with an estimated 7.5 billion barrels of oil in place about 20 km west of Fort McKay, Alberta. The resource must be recovered using Steam-Assisted Gravity Drainage (SAGD) or other in-situ technologies.

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