ConocoPhillips Gets Go-Ahead for Surmont Oilsands Project

ConocoPhillips Canada has received regulatory approval from the Alberta Energy and Utilities Board for its Surmont oil sands project, located 60 kilometers south of Fort McMurray in Northern Alberta.

"This is good news," commented Dan Bailie, Vice President of Major Projects at ConocoPhillips Canada. "It's particularly gratifying that we've been able to work in such a constructive way with the regulators and other interested parties through the processes of consultation, environmental planning and formal application."

"Over the past several years, ConocoPhillips and its predecessor companies have consulted with all stakeholders in the areas surrounding our Surmont leases. We believe that through open and honest dialogue and a desire to find a mutually beneficial shared future, we were able to address concerns early in the process. We value our relationships with stakeholders and consider them to be an integral part of the Surmont project's success", concluded Bailie.

"We have placed a lot of emphasis on creating benefits for the local economy and creating a shared future," commented Yvonne Walsh, who works full time on local business liaison with Fort McMurray and Surmont's neighboring communities. "By using Vendor Profile forms, a Local Opportunities process, the creation of MOU's with nearby First Nations and other work with the Chamber of Commerce and the Northeastern Alberta Aboriginal Business Association, we have found many ways in which we can potentially work together."

"Now that we have the detail of the regulatory approval, we can finalize the evaluation of the commercial potential of the project with a view to making a decision later this year on whether to proceed," said Henry Sykes, President of ConocoPhillips Canada.

Surmont is a steam assisted gravity drainage (SAGD) project with currently estimated recoverable resources of at least five billion barrels of bitumen-quality oil in place. ConocoPhillips Canada is the operator of the Surmont lease and has a 43.5 percent stake in the project together with partners TotalFinaElf (43.5 percent) and Devon (13 percent). If the decision is made to proceed with this project, then construction of the first phase (25,000 b/d) could begin this year, with first oil in 2006.

Further phases contemplated for this project will allow production to rise to 100,000 b/d with total capital expenditure outlined in the regulatory application of C$1 billion.

The first phase of the project will involve around 50 full-time operational jobs and a further 400 construction and 30 drilling-related jobs.

Surmont is planned as a sustainable project to ensure a balance between optimal resource recovery, benefits to local communities and environmental management. Long-term benefits to communities are based on our support of capacity building, and selection of local providers for service and goods that meet the project's needs.

Our environmental management plans include initiatives during all project stages to reduce our footprint in the northern boreal forest. These plans include minimal impact exploration to reduce the clearing for exploration activities and integrated landscape management with the area's forestry operator to plan coordinated timber harvesting and access road construction, thereby reducing ecosystem fragmentation. Project planners also have carefully mapped the area to plan well pads and plant sites to minimize impacts to sensitive environmental and traditional land use areas. These management plans and ConocoPhillips' active support of several multi-stakeholder initiatives also address the cumulative effects of development in the oil sands region.