Nexen says oilsands to triple production
Cities Commit To Cut Emissions
By Dan Healing, Calgary Herald
October 8, 2009
CALGARY - The Alberta oilsands will triple production to three million barrels of oil per day, Marvin Romanow, president and chief executive of Nexen Inc., predicted Thursday, adding he's confident it will happen but is a little hazy on the timeline.
Similarly, he added in an interview after giving a speech at the World Energy Cities Partnership general meeting in Calgary, Phase 2 of his company's 70,000-barrel-per-day in situ Long Lake integrated oilsands project will be built, but that timeline, too, depends on a number of factors.
"I think we want to, No. 1, see Phase 1 ramped up, No. 2, see clarity on the carbon rules in North America and, No. 3, I'd like to see a strong economy because when you get a strong economy, people are going to need the products we produce in the oil business."
Long Lake Phase 1 opened a year ago, but isn't expected to reach capacity until next year. It uses a unique technology to create low-energy, synthetic fuel gas from part of the bitumen, which is then used to generate steam and electricity and as a source of hydrogen for the hydrocracking process.
Romanow pointed out that one of every 83 barrels of oil produced in the world today originates with the oilsands and that ratio is bound to increase because the world's supply of cheap and easy to find energy is declining.
He described Nexen, which has operations in West Africa, Yemen, the North Sea and Gulf of Mexico, as a mini-major -- a small, technically proficient Canadian company that often partners with companies of much greater size.
The new Canadian representative of Norway's StatoilHydro also spoke at the luncheon, giving an update on the company's Kai Kos Dehseh in situ oilsands project.
"We are close to 70 per cent complete on our (10,000 barrels per day) demonstration plant, which will be up and running late next year," said Lars Christian Bache, appointed president of StatoilHydro Canada in September.
He added the company is trying to make the project as environmentally responsible as possible.
Bache joined StatoilHydro's finance arm in 1991 and has held a number of management positions since then.
StatoilHydro has oilsands rights to 1,100 square kilometres in the Athabasca region, containing reserves of roughly 2.2 billion barrels of bitumen.
It also owns a 15 per cent stake in Terra Nova and a five per cent stake in the Hibernia fields off Newfoundland and Labrador and has a 9.7 per cent interest in the Hebron Ben Nevis oilfield, which is being considered for development.
During his presentation, Mayor Dave Bronconnier said energy is a key concern for cities, congratulating the 15 member cities of the partnership for earlier signing an accord to reduce municipal greenhouse gas emissions.
"Cities get it," he said. "We are large producers of greenhouse gases. We in Calgary, for example, run three sewage treatment facilities, two water facilities and three landfill operations, 960 buses on the road and over 2,000 pieces of equipment any time, day or night.
"We are a large user of energy. But I think we recognize, most municipal leaders, we have a role to play, but it can't be in isolation from senior levels of government and it can't be in isolation from industry."
The accord doesn't toughen the city's green plan, but does commit other oil-and-gas cities around the world to reduce their municipal greenhouse gas emissions.
The cities taking part in the meetings range from Houston to Daqing, China, and Dammam, Saudi Arabia. Nine of the cities pledged to achieve specific reductions in their local governments' carbon-dioxide output -- 20 per cent below 2005 levels by 2020, and 80 per cent below by 2050.
Calgary agreed to help fellow members in Trinidad and Nigeria to measure their civic emissions and begin cutting them.
Six of the energy-city alliance's members are also joining the pact, but won't set firm targets at this point. The six include cities from China, Saudi Arabia, Mexico and Angola.
The alliance's three-day meeting is also a business conference, with industry delegations looking at investment opportunities with Alberta's energy sector. Alberta firms can also network with overseas operators.
dhealing@theherald.canwest.com
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