BP and Husky: Sunrise future cloudy.
BP and Husky may ‘scale back’ Sunrise
UK supermajor BP and Canadian integrated Husky Energy may “scale back” their Sunrise oil sands project in Alberta as they seek to cut costs.
Husky boss John Lau earlier this week estimated development costs at $2.5 billion, compared with an agreement in 2007 to spend about $5.5 billion through 2015.
The partners have delayed a final investment decision on the project until next year on expectation of falling industry costs.
“We’ve said in the past we are going to scale back the project,” Husky spokesman Graham White told Bloomberg yesterday. “We’re working in consultation with BP.”
Last year, the partners missed their target for a final investment decision, which would have allowed the first bitumen production to start in 2012.
BP chief Tony Hayward and Lau said earlier this year they expect oil field services and equipment costs to decline after crude prices fell almost $100 from a record $147.27 a barrel in July.
“The partners are considering a range of options to move forward the Sunrise project,” London-based BP spokesman Robert Wine said today in an e-mail to Bloomberg. “This work will continue throughout 2009 and the partners will consider project sanction during 2010.”
BP and Husky plan to use the so-called steam-assisted gravity drainage technique, or SAGD, to extract heavy oil in Alberta, some of which will be supplied to the Toledo refinery in Ohio.