Surmont Energy submits applications for Alberta Wildwood oil sands project

Surmont Energy

With applications for regulatory approval submitted, Calgary-based private company Surmont Energy Ltd. has reached another milestone in its Alberta oil sands production plan.

In March, the company completed its winter 2011/2012 oilsands exploration program at the company’s oil sands leases located about 70 kilometres southwest of Ft. McMurray, Alberta. At the time, the company began its work intended to lead to the announced regulatory submissions.

On October 4, Surmont announced that applications were submitted to the Alberta Energy Resources Conservation Board and the Government of Alberta’s Department of Environment and Sustainable Resource Development for the Surmont Energy's 12,000 barrel per day (b/d) Wildwood SAGD Project.

These applications were submitted by Surmont as operator and 80% owner of the proposed project. Bounty Developments Ltd. holds the remaining 20%.

·      Surmont plans to apply conventional Steam-Assisted Gravity Drainage (SAGD) technology to produce bitumen from a high-quality McMurray oil sands reservoir located approximately 65 km south of Ft. McMurray, Alberta.
·      Production is forecasted to commence in 2015 or 2016, and to ramp up to approximately 12,000 BPD over one to two years. Peak production is projected to continue for about 15 years, with an overall project life of 24 years or more.
·      No issues have been identified with reservoir quality, caprock integrity, reservoir top gas, reservoir bottom water, or associated natural gas.
·      Conventional water treatment, steam generation, and bitumen/water/gas production technologies are to be applied at a central processing facility.
·      The central processing facility’s design includes a natural gas-fuelled cogeneration power plant; however, discussions are also underway for supply of primary or back-up power via the electricity grid.
Surmont estimates that the process for regulatory review of its application could require 15 to 18 months.

Surmont is continuing its process of consultation with aboriginal, public, and Industry stakeholders in conjunction with the application review process.

Surmont and Bounty are developing plans for exploration of the balance of the Wildwood oil sands leases in upcoming winter seasons, with the objective of developing expansions to the project.

Work has also commenced for financing the engineering, procurement, construction and drilling activities to implement the Wildwood SAGD Project, which has capital investment requirements over the next several years totaling in excess of $500 million.

Related oil sands articles
US oil plays threaten Canadian oil sands margins
The Canadian oil sands industry may once again be forced to table projects as it did in 2008 and 2009 when the global recession added to difficulties already faced by the industry. In addition to high operational costs, declining oil prices, and a skilled personnel shortage, oil sands projects now face competition from growing tight oil production from US oil plays – particularly North Dakota’s Bakken, noted Wood Mackenzie in a recent report.

Study: US must encourage development of Canadian oil sands, mitigation of CO2 emissions
To successfully reduce the United States' dependence on fuels from outside North America, the government must pursue policies that foster the diversion of Canadian oil sands crude to US Gulf Coast refineries, according to a new study by Rice University’s Baker Institute for Public Policy



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