Engineering & Mining Journal

AUG 2017

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 25 of 99

OIL SANDS 24 E&MJ • AUGUST 2017 In its last annual review of the Canadi- an oil sands industry (December 2016, pp.42-45), E&MJ described how the sec- tor's participants had been handling the raft of challenges — commercial, political and environmental — that had impacted them over the previous 18 months. "Pro- gress is being maintained and, from a rather predatory perspective, there has been a new round of consolidation within the participants," it said. The principal beneficiary of that con- solidation bout was unquestionably Suncor, which increased its holding in the Syncrude joint venture — and by default its attrib- utable bitumen production — through its acquisition of Canadian Oil Sands Ltd. and Murphy Oil's stake in the joint venture. Thus far this year, Canadian Natural Re- sources has been the main acquirer, taking advantage of Shell's decision to reduce its oil sands interests to a bare minimum, a policy shared with another foreign-based oil major, ConocoPhillips, which has also cut back on its participation. Add to that Total's sale in 2015 of a stake in the Fort Hills mining project to Suncor, and the message is becoming clear: players from outside Canada are increasingly viewing the oil sands as being non-core to their businesses. Looked at another way, the research firm Wood Mackenzie has cal- culated that more than 70% of oil sands production is now held by Canada's four largest producers: Suncor, Canadian Nat- ural, Imperial Oil and Cenovus Energy. All the same, the ownership realign - ments do not seem to have slowed the growth in oil sands output. According to data from the Canadian Association of Petroleum Producers (CAPP), production of bitumen and upgraded crude oil in 2016 rose slightly to reach a total of 2.4 million barrels per day (bbl/d), of which 1.028 million bbl/d were won from min- ing operations and 1.372 million bbl/d using in-situ recovery techniques. Raw bitumen production totals were 1.147 million bbl/d and 1.391 million bbl/d, re- spectively, giving an overall total of 2.538 million bbl/d. Once diluents had been added, the oil sands industry fed a little more than 3 million bbl/d of products to Canada's pipeline and transport network. Shell Retreats In March, Shell announced it was selling all of its Peace River in-situ and undevel- oped oil sands interests in Canada, and reducing its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10%. The cost to Canadian Natural was around Consolidation Continues; Output Rises With last year's wildfires overcome, Canada's oil sands industry is continuing its growth trend, while foreign producers have second thoughts and product transport infrastructure remains on the critical path By Simon Walker, European Editor Then and now: two views of the Surmont in-situ production site, showing how it has been developed through two phases since coming on stream in 2007 (before phase 2–top; after phase 2 construction–bottom). Owned jointly by ConocoPhillips and Total E&P Canada, the operation now has a nameplate capacity of 148,000 bbl/d of bitumen, although the owners were reported to have cut output by 40% earlier this year as a result of a shortage of synthetic crude oil (used for diluting the bitumen) caused by a major outage at Syncrude.

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