Surmont Project Enters Commercial Production

ConocoPhillips and Total E&P Canada have started commercial production in the first phase of their Surmont Project joint venture, which occurred in mid-October. Phase One of the project has a capacity of 25,000 barrels per day (bpd) and is expected to reach peak production by 2012.

The Surmont project is located about 60 kilometers southeast of Fort McMurray in Alberta's oil sands. ConocoPhillips is the operator of the 50-50 joint venture with Total. Phase One development will be followed by a second phase slated for commercial start-up before the middle of the next decade. The completion and full ramp-up of Phase Two is expected to bring total peak production for both phases to approximately 100,000 bpd. Future phases at Surmont are also under study.

"We're very pleased to have reached this important milestone," said Matt Fox, senior vice president Oil Sands for ConocoPhillips Canada. "Development of the oil sands is a key element of our corporate strategy to increase production from unconventional energy sources, which will be essential in meeting future energy demand. The Surmont development is an important part of that plan."

"The Surmont Project is a key part of Total's integrated strategy for the oil sands," said Michael Borrell, president of Total E&P Canada Ltd. "Our share of production from Surmont plays an important role in our integrated production and upgrading plans in Alberta."

The initial Surmont pilot project began in 1997. In 2003, the joint venture decided to launch the first phase of commercial development at Surmont using Steam Assisted Gravity Drainage (SAGD). First steam was injected into the ground in June 2007 at Phase One, resulting in the first commercial production announced today.

"Our goal was the safe start-up of commercial production at Surmont," Fox said. "We've achieved that goal and now we will focus on reaching peak production at Phase One and moving on to Phase Two."