A butane steam aided process (SAP) pad is seen at Cenovus's Christina Lake operation south of Fort McMurray.Kevin Van Paassen/The Associated Press
Alberta's energy regulator has given its blessing to a major oil sands expansion by Cenovus Energy Inc. The approval by the Alberta Energy Resources Conservation Board clears the path for Cenovus to boost its oil output by 120,000 barrels per day, which would nearly double the production at its current oil sands projects.
The approval comes as crude prices hover above $110 (U.S.) a barrel, a level high enough that it has given substantial confidence to an industry now in the midst of a major return to the oil sands.
In a statement Tuesday, Cenovus chief executive officer Brian Ferguson called the approval "a major milestone."
"As a result of this approval and the expansion of the development plan area, we expect to add substantially to our Christina Lake proved reserves at year end," Mr. Ferguson said.
Cenovus, which is working to quintuple its oil sands output by 2019, now has regulatory approval for 290,000 barrels per day of extra production, some of which is already under construction. Not all of that capacity belongs to Cenovus, however, because it splits production on much of its oil sands land base with ConocoPhillips Co.
Cenovus has already started engineering and manufacturing equipment for the Phase E expansion of its Christina Lake project. Phases E, F, and G, each with a capacity of 40,000 barrels per day, were all approved for construction, the company said.
The company plans to draw first oil from Christina Lake Phase E by 2014. Phases F and G are expected to come on line in 2016 and 2017.
Cenovus (CVE)
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Nathan VanderKlippe