Syncrude turns 50

July 21, 2014

Probably most Canadians outside of Alberta have never heard of Syncrude. Likely few would care. Yet the Syncrude story is a remarkable one for Canada. The economic impact of Syncrude is colossal.

Syncrude Canada Ltd. was incorporated in 1964 and started operations in 1978. Its current production capacity is 350,000 barrels per day of high quality light, low sulphur crude oil – enough to supply 6.2 million Canadians with their petroleum requirements.  Cumulative production now exceeds 2.4 billion barrels.

In 1965 Syncrude operated a 35-tonne per day pilot plant and R&D lab at Mildred Lake. In 1969 the company received approval to build a commercial plant, with construction to start in 1976.

A few interesting facts about Syncrude:

• Syncrude is a joint venture, not a listed company on the stock market. In 1964, the owners included Imperial Oil (30% owner) and three other oil companies, none of which exist today. At start-up in 1978 the Ontario, Alberta and federal governments owned 30% of Syncrude. Today Syncrude is owned by Imperial Oil Resources (25%) and six other parties.
• Syncrude was a risky bet when it started up in the late 1970’s as evidenced by the governments injecting almost 1/3rd of the equity. They took a gamble on the venture that has paid dividends through the years.
• Syncrude’s Mildred Lake facility is 40 kilometres north of Ft.McMurray, with its Aurora project located an additional 35 kilometres north of Mildred Lake. The original project was oil sands mining operation, combined with processing/refining that used a variety of unique extraction technologies—a giant dredge, bucket-wheels, conveyors, etc. Through the years the extraction machines changed a great deal. Now they use shovels and big trucks.
• In 2008, Syncrude was the first company in the Canadian oil sands industry to receive certification from the Alberta government for a reclaimed area. Called Gateway Hill, the area was planted in the early 1980s and is now a healthy forest of broad leaf and needle leaf trees interspersed by several wetlands.
• The company has a 100-person R&D centre in Edmonton.
• In 2013 the company ordered two 45 foot steel ice breakers from an Ontario firm to break up ice on its tailings ponds.

97% of Canada’s oil reserves are contained in the oil sands. Syncrude over its 50 year history has mined into about 2% of the oil sands.

Economic Impact:

• Since start-up in 1978, Syncrude has made payments in excess of $14.6 billion to governments for royalties, payroll and municipal taxes and other Crown charges.
• Syncrude continues to be a major engine of growth for the Alberta and Canadian economies with $6.3 billion in goods and services procurement during 2013.
• 5,000 employees and an average of 3,500 contractors support current operations.
• The company is the largest private sector employer of Aboriginal people in Canada. Aboriginal people comprise about 9% of Syncrude’s workforce. The company has spent over $2 billion with Aboriginal suppliers.

 

Commentary

Syncrude has been a Canadian success story on many levels: a pioneering effort to commercially develop the oil sands, an employer for many thousands in well-paying positions and a conscientious corporate citizen.

Sources

• a)http://www.syncrude.ca/about-syncrude/economic-contribution/



• b)"Cornerstone" an advertising supplement with Alberta Venture magazine, summer 2014.