The big guy’s big bets

May 22, 2014

The world’s second largest energy company has several big investments in energy in the north active and contemplated.

Exxon Mobil is second only to Royal Dutch Shell in terms of size with revenues topping $341B and profits of $30B. The company publishes a world energy outlook to 2040 (source a below) which is worth perusing.

Exxon Mobil’s northern projects include:

• The $4B Point Thompson gas project on Alaska’s North Slope. Last winter employed more than 1,100 Alaskans worked on this project. The project is designed to initially produce 10,000 barrels per day of condensate at startup in the winter of 2015/2016. A pipeline is being installed with capacity of 70,000 bpd and will connect to the trans-Alaska pipeline.
• Exxon Mobil with three partners is actively evaluating a massive $40-65B gas pipeline from the North Slope of Alaska to Nikiski on the Kenai Peninsula where a three train LNG facility could be constructed. At the earliest such a project would take a decade to plan and permit.
• Through its Canadian subsidiary, Imperial Oil, the company is considering a deep drilling program177 kms off the coast of Tuktoyuktuk, NWT. The well would be 7.6 kms deep. This activity would take place in a few years.
• The Kearl Oil Sands project, located 70 kilometres north of Fort McMurray and jointly owned by Imperial (71 percent) and ExxonMobil Canada (29 percent), is one of Canada’s highest-quality oil sands deposits. It has an estimated 4.6 billion barrels of recoverable bitumen resource, which will help meet North America’s energy needs for the next 40 years. Construction of the initial development entailed 45 million person hours of work and employed a peak workforce of more than 5,000 people. The total cost of the project is over $12B. An expansion phase at Kearl will add another 110,000 barrels per day by late 2015, and future debottlenecking will increase output to reach the regulatory capacity of 345,000 barrels per day by about 2020.
• Imperial Oil is a 25% owner of the Syncrude project, the oldest and largest oil sands mining project. In 2011, Syncrude produced 105.3 million barrels of oil. Syncrude is one of the largest private sector employers in Alberta, employing around 5,500 people directly and an average of 1,000-1,500 maintenance contractor employees. Syncrude’s operations provide jobs for 14,000 people directly and indirectly across Canada. Over the last five years, the company has invested more than $325 million on oil sands research and development projects. More than half of these expenditures are focused on environmental research.

 

Commentary

Exxon-Mobil and its Canadian subsidiary, Imperial Oil, are major players in oil and gas developments in the north.

Sources

• a)http://cdn.exxonmobil.com/~/media/Reports/Outlook%20For%20Energy/2014/2014-Outlook-for-Energy-low-resolution.pdf



• b)http://news.exxonmobil.com/press-release/point-thomson-project-reaches-construction-milestones



• c)Chester Dawson, "Imperial Oil well would be the deepest in the arctic", Globe and Mail, 19-May-2014.



• d)http://www.imperialoil.ca/Canada-English/operations_sands_kearl_overview.aspx



• e)http://www.syncrude.ca/users/folder.asp?FolderID=5617