Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The Alberta oilsands has a new kid in town.
Calgary Herald reports that Grizzly Oil Sands, a privately-owned company, has been approved for an 11,300 barrel-per-day, in-situ oilsands project southwest of Fort McMurrray:
“Cabinet approval for the project was given this week after approval was sought last year but chief executive John Pearce said the process of engineering and ordering equipment is already well underway.”
The company expects first production by early 2013, and to grow production at its other property to 60,000 bopd by 2020 reports The Herald.
In-situ oilsands production involves a process known as steam-assisted gravity drainage (SAGD). In SAGD, two parallel horizontal wells are drilled a few metres apart, then steam is injected down a vertical well into the upper horizontal well. The heated bitumen flows down to the lower well, where it is pumped to the surface.
The resource potential for in-situ oil sands extraction is huge. Surface mining is only feasible for the shallow oil sands deposits found north of Fort McMurray, which means that 80 percent of the resource is too deep for mining and requires in situ (Latin for “in place”) recovery methods.
