Imperial oil announces start up at Kearl oil sands project
BY BEN DUMMETT
TORONTO -- Imperial oil announced the start up of the initial phase of its Kearl oil sands project in northeastern Alberta, a project the Calgary energy company is counting on as key source of crude for more than 40 years.
The project has been plagued by cost overruns, and initial production comes amid an uncertain outlook for Canadian heavy oil prices because of a shortage of pipeline capacity to the United States and increased light oil production in that country.
Imperial Oil, majority owned by Exxon Mobil, said in February the final cost for Kearl's initial development is expected to be $12.69 billion, up from $10.9 billion in 2011.
Located in the Athabasca region of northeastern Alberta, production from Kearl's initial development is expected to reach daily production of 110,000 barrels by later this year. Expansion of Kearl will add another 110,000 bpd by late 2015 and the project has the potential to produce regulatory capacity of 345,000 bpd by about 2020, Imperial Oil said in its release.
"Kearl is the largest project we've ever undertaken and the beginning of a period of substantial growth for the company that will see us double production to more than 600,000 bpd by about 2020," Rich Kruger, Imperial CEO, said in a release.
Opposition from environmental groups is one of the biggest challenges oil sands developers face because crude produced from these operations is more carbon intensive to produce than many other types.
Imperial Oil made a point to highlight the advanced technologies used at Kearl to reduce the project's environmental impact.
Dow Jones Newswires