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The Opportunities and Challenges of Operating in Alberta's Oil Sands

ConocoPhillips Canada has a leading land position in Alberta’s oil sands and we anticipate future production growth. We are on a journey of continuous improvement in our efforts to develop the oil sands in a profitable and environmentally responsible way. We are also creating a number of local benefits that include employment and community investment as well as economic development opportunities for businesses across Canada. With this development will come challenges for us to manage as we grow our business in the years ahead. We believe we can mitigate some of these challenges through advancing technology.

Rapid large-scale oil sands development puts pressure on local communities. Population growth has placed strains on local infrastructure and services, and communities are challenged to keep pace with the growth. The cost of housing is high, as is local inflation, leading to a high cost of living. The tightening of the labour market for skilled tradespeople generates rising wages in the oil and gas industry and shortages in other sectors, especially in the service industry.

There are also concerns about the cumulative impacts on air, land and water from large-scale industrial activity. In addition, impacts to wildlife can affect local Aboriginal peoples’ ability to engage in their traditional lifestyle.

For more information on our oil sands assets please visit our website.

The Surmont Project

The Surmont Project is an important part of our oil sands portfolio. The Project is located in the Athabasca region of northern Alberta, approximately 63 kilometres (39 miles) southeast of Fort McMurray, Alberta. Surmont uses steam-assisted gravity drainage to recover the oil and is operated by ConocoPhillips Canada. It is a 50/50 joint venture with Total E&P Canada. The Surmont project began as a pilot project with the construction of a small steam-assisted gravity drainage facility located near our current operations. The pilot was built in 1997 and is still in use today to support existing operations and test new technology applications. Surmont Phase 1 began commercial oil production in October 2007. Currently Surmont 1 produces approximately 20,000 barrels per day with a production capacity of 27,000 barrels per day. Surmont Phase 2, which began construction in 2010, will have a production capacity of 83,000 barrels per day for a project total of 110,000 barrels per day.

Other noteworthy facts about the Surmont Project include:

  • Surmont Phase 2 builds on the success of Phase 1 in creating value for local communities through employment and economic development.
  • We are committed to developing the project safely and in an environmentally responsible way. This will be reflected in our management, hiring and vendor selection processes.
  • While we haven’t finalized how much money we will spend in local communities, we estimate we will spend more than $175 million locally and regionally over the five-year construction period.
  • We are working to expand the business opportunities for local contractors and communities through the creation of a Business Facilitation Centre, which will focus on building business capacity and nurturing new business opportunities.

To better understand the technology we use and what the Surmont Project looks like, please visit our Canadian website.

Working with Industry and Government

We are actively engaged with industry counterparts and government representatives in a wide array of joint and collaborative organizations and processes to advance the development of oil sands technologies, share best practices, drive performance improvements and inform government regulation of the oil sands. These organizations and processes are key to how we approach oil sands development. ConocoPhillips Canada participates in, among others:

Information on these organizations and our participation is available in the public record.

The Government of Alberta, which is the primary regulator of environmental management in the oil sands, is actively involved in identifying opportunities to improve the way it manages oil sands development in the province. It has many ongoing processes and short-term projects in which we participate, some directly and some via industry associations or some of the organizations listed above. The provincial government departments and agencies with which we most often engage are:

Last updated on June 28, 2016