There's Still a Future for Dirty Oil...

[GRG55]

...apparently ;)

Seems someone out there is not planning for sub-$50 oil.

[Imperial Oil is the Canadian subsidiary of ExxonMobil]

Imperial Oil gives green light to Kearl oilsands project
Last Updated: Monday, May 25, 2009 | 2:26 PM ET
CBC News

Imperial Oil said Monday that its board of directors has approved the go-ahead of the first phase of the Kearl oilsands project.

The Kearl project, which is located 70 kilometres northeast of Fort McMurray, Alta., is ultimately expected to produce more than 300,000 barrels a day of bitumen. The first phase of the project is expected to begin production in late 2012 with total production to average 110,000 barrels per day.

The company said the first phase of the project is anticipated to cost about $8 billion or approximately $4.50 per barrel to construct.

In August 2008, the company announced it had delayed a decision whether to proceed with Kearl, citing a successful environmental challenge and design revisions to the project for increasing costs.

Imperial says the total recoverable bitumen at Kearl is estimated at 4.6 billion barrels...

[LargoWinch]

Re: There's Still a Future for Dirty Oil...

I was beaten by a mere 16 min.

Better chance next time...


Note to Luke: no it is not a Canadian takeover of iTulip...yet ;)

[peakishmael]

Re: There's Still a Future for Dirty Oil...

Is $50 really the break-even point for typical CDN bitumen projects? I thought it was higher. Anyway, if construction only costs $4.50 a barrel, seems a good bet, barring the legal/environmental issues. (I assume the amount recoverable is known with fair accuracy, since it is on/near surface.) Just build the thing, and wait a couple years to crank up operations if oil is still in the doldrums. Eh?

First post, be kind...

[Starving Steve]

Re: There's Still a Future for Dirty Oil...

...apparently ;)

Seems someone out there is not planning for sub-$50 oil.

[Imperial Oil is the Canadian subsidiary of ExxonMobil]

Imperial Oil gives green light to Kearl oilsands project
Last Updated: Monday, May 25, 2009 | 2:26 PM ET
CBC News

Imperial Oil said Monday that its board of directors has approved the go-ahead of the first phase of the Kearl oilsands project.

The Kearl project, which is located 70 kilometres northeast of Fort McMurray, Alta., is ultimately expected to produce more than 300,000 barrels a day of bitumen. The first phase of the project is expected to begin production in late 2012 with total production to average 110,000 barrels per day.

The company said the first phase of the project is anticipated to cost about $8 billion or approximately $4.50 per barrel to construct.

In August 2008, the company announced it had delayed a decision whether to proceed with Kearl, citing a successful environmental challenge and design revisions to the project for increasing costs.

Imperial says the total recoverable bitumen at Kearl is estimated at 4.6 billion barrels...

I suspect Canada will be selling much of the oil from its Alberta tar sands to China and India. And once the oil is up-graded, Canada will be in "the driver's seat", not Obama, not the EPA in Washington, and not Nancy Pelosi in Congress.

I remember the old saying in Alberta, "Let the bastards freeze in the dark."

[LargoWinch]

Re: There's Still a Future for Dirty Oil...

Is $50 really the break-even point for typical CDN bitumen projects? I thought it was higher. Anyway, if construction only costs $4.50 a barrel, seems a good bet, barring the legal/environmental issues. (I assume the amount recoverable is known with fair accuracy, since it is on/near surface.) Just build the thing, and wait a couple years to crank up operations if oil is still in the doldrums. Eh?

First post, be kind...

you joined iTulip more than a year ago and only now, you feel like commenting?

That is fine, voyeurism is allowed on the internets ;).


Regarding the topic at hand, I must admit that GRG is the expert on oil when compared to me - bar none.

However, I must say that production costs in the oilsands are at about $30pb according to my limited knowledge, why do you use a $4.50 figure? That is like Saudi costs or wherever you can put a pipe in the sand and collect the goo, unlike the tar sands...

[LargoWinch]

Re: There's Still a Future for Dirty Oil...

I suspect Canada will be selling much of the oil from its Alberta tar sands to China and India. And once the oil is up-graded, Canada will be in "the driver's seat", not Obama, not the EPA in Washington, and not Nancy Pelosi in Congress.

I remember the old saying in Alberta, "Let the bastards freeze in the dark."

Canada is largest exporter of Crude to the US.

Given the geographic location of both countries, why would this change? I mean a barrel of oil is a barrel of oil no?

[NerdyBoy99]

Re: There's Still a Future for Dirty Oil...

However, I must say that production costs in the oilsands are at about $30pb according to my limited knowledge, why do you use a $4.50 figure?

From the article
"The company said the first phase of the project is anticipated to cost about $8 billion or approximately $4.50 per barrel to construct."

[LargoWinch]

Re: There's Still a Future for Dirty Oil...

From the article
"The company said the first phase of the project is anticipated to cost about $8 billion or approximately $4.50 per barrel to construct."

I stand corrected thank you, but wait until the Canadian government starts to tax this project in 2012:

MEECH LAKE, Quebec, May 25 (Reuters) - Canada's budget deficit will be "substantially more" than the C$33.7 billion ($30.1 billion) forecast in January because the economic slowdown is sapping tax revenue, Finance Minister Jim Flaherty warned on Monday.
...
http://www.reuters.com/article/bonds...44936120090525

[jk]

Re: There's Still a Future for Dirty Oil...

I stand corrected thank you, but wait until the Canadian government starts to tax this project in 2012:

to the construction costs must be added the operating costs, including taxes. traditionally we've viewed miners, reserve-holding oil companies, and so on, as leveraged beneficiaries of higher prices for their underlying commodities. perhaps. or perhaps they will be squeezed by operating costs and taxes, and the better investment will be the commodity itself. fwiw, that's how i'm beginning to think, anyway.

[santafe2]

Re: There's Still a Future for Dirty Oil...

The Kearl project, which is located 70 kilometres northeast of Fort McMurray, Alta., is ultimately expected to produce more than 300,000 barrels a day of bitumen. The first phase of the project is expected to begin production in late 2012 with total production to average 110,000 barrels per day.

GRG, can you give us a primer on bitumen? I thought it was only useful for asphalt, roofing, etc. Is there a refinery process that allows bitumen to produce transportation fuel? Thanks.

[Starving Steve]

Re: There's Still a Future for Dirty Oil...

Canada is largest exporter of Crude to the US.

Given the geographic location of both countries, why would this change? I mean a barrel of oil is a barrel of oil no?

You are using common sense and thinking with your head. But these days, ever since the advent of the radical environmentalists, you have to think of a barrel of oil as being politically incorrect. You have to think of a barrel of oil as a big carbon foot-print. So the barrel of oil is "off-the-table"; it might as well not exist because it can not be used.

These days, whatever the Al Gore, the Sierra Club, Greenpeace, the EPA, and BBC tell you to believe is "the scientific consensus" or the "opinion of experts" or "what global climate models say", that then is fact. That then is truth.... All other beliefs, even when supported by decades of careful observation, are dismissed from further discussion. ( This is the new science. )

The new science is whatever the mob screams the loudest... It's whatever is politically correct for that day.

Decades ago, in nazi Germany, this was how science was done. This was the "new science" then too. The old science, conventional science in Europe--- done with careful and rigourous observation, and with critical thinking and debate---was called "Jewish science". The old science was then dismissed and laughed at. And then the books were burned.... Remember?

[LargoWinch]

Re: There's Still a Future for Dirty Oil...

You are using common sense and thinking with your head. But these days, ever since the advent of the radical environmentalists, you have to think of a barrel of oil as being politically incorrect. You have to think of a barrel of oil as a big carbon foot-print. So the barrel of oil is "off-the-table"; it might as well not exist because it can not be used.

These days, whatever the Al Gore, the Sierra Club, Greenpeace, the EPA, and BBC tell you to believe is "the scientific consensus" or the "opinion of experts" or "what global climate models say", that then is fact. That then is truth.... All other beliefs, even when supported by decades of careful observation, are dismissed from further discussion. ( This is the new science. )

The new science is whatever the mob screams the loudest... It's whatever is politically correct for that day.

Decades ago, in nazi Germany, this was how science was done. This was the "new science" then too. The old science, conventional science in Europe--- done with careful and rigourous observation, and with critical thinking and debate---was called "Jewish science". The old science was then dismissed and laughed at. And then the books were burned.... Remember?

Steve, I fail to see your point.

Let me try to understand here: you assert that a Canadian producer will prefer to sell its oil to China or India because of environmental and/or political issues?

[Starving Steve]

Re: There's Still a Future for Dirty Oil...

GRG, can you give us a primer on bitumen? I thought it was only useful for asphalt, roofing, etc. Is there a refinery process that allows bitumen to produce transportation fuel? Thanks.

Is this what the eco-frauds are now saying--- that bitumen can only be used for asphalt and roofing? Each of their lies keeps getting bigger and more hilarious than the last.

Come to Alberta and see for yourself what the real truth is about bitumen and heavy oil. Go visit the oil up-grader facility at Ft. Saskatchewan, Alberta, just north-east of Edmonton.

[Starving Steve]

Re: There's Still a Future for Dirty Oil...

Steve, I fail to see your point.

Let me try to understand here: you assert that a Canadian producer will prefer to sell its oil to China or India because of environmental and/or political issues?

If the Americans don't want the oil from Alberta, the world will gobble it up in any of dozens of countries, including India and China. That is the point.

[peakishmael]

Re: There's Still a Future for Dirty Oil...

you joined iTulip more than a year ago and only now, you feel like commenting?

That is fine, voyeurism is allowed on the internets ;).

Only now do I feel edjicated enuf to form a half-decent question, on something I know a little about (oil, not economics).