Total E&P Canada Begins Permitting Phase for Joslyn Creek Oil Sands Acquisition

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Researched by Industrial Info Resources (Sugar Land, Texas). Total E&P Canada Limited (Calgary, Alberta), a subsidiary of Total (NYSE:TOT) (Paris, France), has begun the permitting phase at its newly acquired Joslyn Creek oil sands project located approximately 65 kilometers north of Fort McMurray, Alberta. Total E&P had recently purchased the Joslyn Creek project from Deer Creek Energy Limited (Calgary, Alberta) in a $1.4 billion stock buyout. In February 20006, Total E&P initiated the permitting process for the mining portion of its proposed operations. The mine itself will be a truck and shovel operation divided into two 100,000 barrel per day phases (BBL/d). This new project comes on the heals of the completion of the second phase of the Steam Assisted Gravity Drainage (SAGD) portion of the Joslyn project that added approximately 10,000 BBL/d of bitumen production.

Total E&P made the production decision to move ahead with the dual phase mining portion while it makes a final decision on the phase III & IV additions to the SAGD side. The phase III & IV projects entail the construction of facilities to produce an additional 15,000 BBL/d of bitumen from each phase. Total E&P is currently evaluating the economics of constructing these phases now or to just move forward with the mining phases and obtain a larger economy of scale for the capital expended. The question is in the timing of the phases and not whether the SAGD portion will be constructed. The result will be the same in the end when the SAGD and mining operations are combined with a proposed upgrader to produce between 200,000 and 250,000 BBL/d of oil sands derived synthetic crude by 2015. If completed in its present form the 200,000 BBL/d of synthetic crude production will cost Total over $9 billion CND.

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