ConocoPhillips Initiates Phase 2 of Surmont Oil Sands Project

ConocoPhillips announced the second phase of the Surmont project, a Canadian oil sands steam-assisted gravity drainage (SAGD) facility. Phase 2, slated to begin initial construction in 2010, will increase Surmont's gross production capacity from 27,000 to 110,000 barrels per day.

"Surmont is an important part of our oil sands portfolio and we're pleased to announce its next phase of development," John Carrig, president and chief operating officer of ConocoPhillips, said. "The oil sands are an area of significant future oil production growth and are important for short- and long-term energy and economic security in North America. This phase of Surmont will also result in a significant increase in construction and operating jobs."

Surmont is located approximately 63 kilometers southeast of Fort McMurray, Alberta, in the Athabasca oil sands region. Surmont is operated by ConocoPhillips Canada and is a 50/50 joint venture with Total E&P Canada. Phase 2 is scheduled to begin production in 2015.

"We believe that our oil sands projects and the conversion of crude oil produced from oil sands to fuel can be conducted in an environmentally sustainable manner and that technology will play a significant role in managing the environmental footprint," Carrig said. "Accordingly, we are actively investing in research and technology development that holds promise for reducing the impacts on air, land and water. We anticipate spending more than $300 million in heavy oil technology research and development over the next five years to improve economic and environmental performance."



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