Statoil Pumps First Oil at LDP

Statoil announced first oil production from its Leismer Demonstration Project (LDP) after initiating steam injection in September 2010, one month ahead of schedule.

"We are very pleased with the safe start up of this demonstration facility and first oil at Leismer," said Lars Christian Bacher, president of Canadian operations for Statoil Canada Ltd. "This is truly a milestone for our business in Canada."

LDP, approved to 10,000 barrels per day (bpd), is the first phase of the Leismer project, which is expected to ramp up to its rated capacity of 18,800 bpd within 24 months, pending final approval by Alberta Environment.

Future phases of the Kai Kos Dehseh steam assisted gravity drainage (SAGD) project are also under study. Statoil originally entered Kai Kos Dehseh through the acquisition of North American Oil Sands Corporation in 2007.

Statoil's oil sands leases are located approximately 120 kilometers south of Fort McMurray in the Athabasca region of north east Alberta. The company's next phase, Corner, is a proposed 40,000 bpd facility, which along with the eventual further expansion of Leismer to 40,000 bpd, recently received approval by the Alberta Energy Resources Conservation Board (ERCB).

"Over the last three years we have increased our understanding of the oil sands business and feel we are now in a good position to apply what we have learned," said Bacher.

"We will proceed with several research and technology innovations and tests at the LDP project and if successful will apply them to future phases of development to drive economic efficiency and reduce environmental impact, including CO2 reductions at our Alberta operations."

Statoil Canada Ltd. is the operator of Kai Kos Dehseh with a 60% ownership in the project, while PTT Exploration and Production of Thailand is a partner with a 40% ownership.

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