Nearly two-thirds of Canada's daily bitumen production is dug from open-pit mines in a 37-township area north of Fort McMurray, Alberta. The existing mines have capacity of some 650,000 barrels of crude bitumen per day, and to date 2.9 billion barrels have been produced.
As impressive as these numbers might be, they are just the beginning: an additional 32 billion barrels of established mineable reserves remain. If all of the proposed projects are brought onstream, total production could skyrocket to more than 2 million barrels a day. More conservatively, Alberta's Energy & Utilities Board has forecast that total mined bitumen production will reach 1.4 million barrels a day by 2013.
Oil sands can be commercially mined in areas with less than 75 meters of overburden, although high commodity prices may encourage that limit to stretch upward in the future. (For more on this, see "Alberta's Heavy Oils," Oil and Gas Investor, October 2001.) Currently, Syncrude Canada Ltd., Suncor Energy Inc. and Albian Sands Energy Inc. each operate mines in the surface mining area. The open-pit operations have associated upgrading facilities, which convert the crude bitumen into synthetic crude oil (SCO). Some 224 million barrels of crude bitumen was upgraded to 196 million barrels of SCO in 2003, according to the EUB.
Syncrude, a joint venture of Canadian Oil Sands, ConocoPhillips, Imperial Oil, Mocal Energy, Murphy Oil, Nexen and Petro-Canada, runs the largest oil-sands project in the world. In June 2005, its Base, North and Aurora mines produced 250,000 barrels of SCO per day.
Syncrude is in the midst of a major expansion that will grow its capacity to 350,000 barrels per day in mid-2006, and future volumes could reach as much as 500,000 barrels per day. The upgrader expansion has suffered some high-profile problems with price and timing, however, and the company is working hard to adhere to the revised cost estimates and schedule.
For more on this, see the June issue of Oil and Gas Investor. For a subscription, call 713-993-9325 Ext. 126.