Imperial Oil seeks regulatory approval of $7-bn oil sands project

Imperial Oil Ltd, one of Canada's largest energy companies and a subsidiary of global oil and gas giant ExxonMobil Corp, said that the company has filed regulatory applications seeking approval of a new oil sands project in Alberta at an estimated cost of $7 billion.

The applications have been filed with the Alberta Energy Regulator and Alberta Environment and Sustainable Resource Development. The proposed project will be located on Imperial Oil's Muskeg lease, about 45 km northeast of Fort McMurray in northern Alberta.

According to company spokesman Pius Rolheiser, the price tag is ''very preliminary'' and there's a good chance it could change as engineering work begins.

 ''As project definition advances and as market conditions evolve, obviously it has the potential to impact the cost estimate,'' he told The Canadian Press.

The proposed Aspen development will use steam-assisted gravity drainage (SAGD) technology to access bitumen resource with recoverable potential of 1.1 billion barrels. Imperial Oil is considering using solvents to achieve enhanced in-situ recovery and reduce water use and carbon dioxide emissions.

The project will include central steam generation, bitumen processing plant facilities, and energy-saving electrical power cogeneration. The mine is targeted to produce about 45,000 barrels per day of commercial bitumen and will have an expected life span of 40 years.

The company expects to take a final investment decision by 2017, subject to receipt of regulatory approvals, further evaluation of technical aspects and market conditions, and the project could be producing as early as 2020.

In addition to the Aspen development, Imperial Oil's portfolio of potential developments includes the Corner and Clyden leases near Fort McMurray and the Grand Rapids opportunity on Imperial's Cold Lake lease.

Earlier this year, the company started the first phase of its $12.9-bn Kearl oil sands mine north of Fort McMurray.

Calgary-based Imperial Oil Limited is one of Canada's largest corporations and a leading member of the country's petroleum industry. The company is a major producer of crude oil and natural gas, Canada's largest petroleum refiner, a key petrochemical producer and a leading marketer with coast-to-coast supply and service station networks.

US energy giant ExxonMobil Corp owns around 70-per cent stake in the company. Imperial Oil reported revenue of $31 billion in 2012.