Imperial Files Regulatory Applications for Kearl Oil Sands Project

Imperial Oil Limited is filing regulatory applications for development of the Kearl Oil Sands Project with the Alberta Energy and Utilities Board and Alberta Environment.

The applications include a description of the proposed project, as well as an extensive assessment of the anticipated environmental and socio-economic impacts. Imperial is the designated operator of the proposed joint-venture project, which would be located on portions of oil-sands leases held by Imperial and ExxonMobil Canada in the Kearl Lake area of the Athabasca oil-sands deposit, about 70 kilometers north of Fort McMurray, Alberta.

The Kearl Oil Sands Project would be similar in design to existing oil-sands mines in the Fort McMurray region, using large-scale shovels, trucks, crushers and oil-sands hydrotransport technology. The current plan is to develop the mine in a staged manner, with an initial mine train with production capacity of about 100,000 barrels a day. Subsequent expansions could increase capacity to approximately 300,000 barrels a day. The mine application does not include any on-site bitumen upgrading. Any future upgrading capacity to support the Kearl project would be the subject of separate application.

"Over the past two years, Imperial has confirmed a world-class quality resource on our Kearl leases. This resource could support a mining and bitumen extraction project that would provide decades of non-declining production," said Eddie Lui, Imperial vice-president, oil-sands development and research.

"We have consulted extensively with stakeholders in the Fort McMurray region. As we move forward in pursuing this opportunity, we will continue this consultation to ensure that the environmental and socio-economic effects of this proposed development are fully understood," Lui said.

Assuming timely regulatory approval, encouraging results from further project engineering and design work, and favourable business and market conditions, construction on the Kearl Oil Sands Project mine development could begin in 2007, with first production by the end of 2010. The other two mine trains could start up in 2012 and 2018, respectively. Based on evaluation drilling, total recoverable bitumen resources on the leases are estimated at 4.4 billion barrels.

Total investment in this development is estimated to be in the range of $4.5-6.5 billion (CDN. 2005$). Development would involve a construction workforce of about 2,000 and the creation of over 1,000 permanent jobs when all three mine trains are operational. Provincial and federal revenues from corporate taxes and royalties over the life the project are estimated in the range of $24 billion (CDN. 2005$).