Toronto (PRWEB) May 11, 2006
Action in the Alberta oil sands arena is heating up. Monday, one of the largest players in the Alberta oil sands market, Shell Canada Ltd. (TSX: SHC), announced a C$2.4 billion all-cash offer to buy out BlackRock Ventures, Inc. (TSX: BVI) in a move to become the dominant player in what some see as the next boom in Canada.
BlackRock, a junior oil sands company, adds 14,000 bpd to Shell Canada's production and was offered a 27 percent premium to Friday's closing price on the Toronto Stock Exchange.
Clive Mather, Shell Canada's chief executive, called BlackRock a "prime target" for his company, pointing out that BlackRock's assets adjoin Shell Canada's.
Shell Canada is offering the highest price yet for oil sands production, agreeing to pay more than $171,000 per barrel of daily production and more than $11 per barrel of estimated reserves. Setting a new valuation set in the oil sands game.
Tuesday, Syncrude (TSX: COS-UN) announced the development of its Phase 3 plan at a cost of C$8.4 billion that will increase Alberta oil sands joint venture's production capacity to average 350,000 barrels a day or 124,000 barrels a day net to the trust.
The expansion is the largest in the Syncrude's history and will make Syncrude the biggest producer in the Alberta oil sands.
The Syncrude Project is a joint venture operated by Syncrude Canada Ltd. and owned by Canadian Oil Sands Limited, ConocoPhillips Oilsands Partnership II, Imperial Oil Resources, Mocal Energy Limited, Murphy Oil Company Ltd., Nexen Oil Sands Partnership, and Petro-Canada Oil and Gas.
Syncrude's operation is located north of Fort McMurray, Alberta and borders junior oil sands company Patch International, Inc. (OTCBB: PTCH), which just bought 3 additional claims there and added one of Alberta's hottest M&A players from the oil patch to its operating subsidiary's board of directors.
Early last week, Michael Vandale became a director of Patch Energy Inc., a wholly-owned subsidiary of Patch International Inc. Vandale haled from Arsenal Energy, Inc., a Toronto Stock Exchange listed company, where he served as president and built the company up through a series of acquisitions from 50 bpd to nearly 3,000 when he left his post last month to join Patch's board.
In February, French oil giant Total, began operating a steam injection plant outside Fort McMurray and hopes to begin producing oil in May.
Canada now ranks No. 3 in the world in oil production, thanks to the huge deposits of oil sands that covers an area the size of Florida. Without its oil sands production, Canada would only be ranked No. 22.
What makes it all possible in the boom for oil there is a combination of new technologies, which makes it feasible to extract oil from the sands and skyrocketing prices. Led by Total, nearly every major Western oil company is gearing up to go after the deposits here. In all, they plan to spend more than $70 billion in the next decade unlocking the oil from the sand. Chief
Big Oil is turning its attention and pouring money into extra-heavy crude, such as the giant deposits near Fort McMurray. What the world is running out of is light sweet crude, which is more easily processed into gasoline and diesel fuel.
Canada's Alberta oil sands contain at least 174 billion barrels of recoverable heavy oil, according to the Alberta Energy and Utilities Board. The reserves could supply the world's oil production demand for over five years.
By comparison, Saudi Arabia has about 260 billion barrels of more traditional crude or 8 ½ years' global supply, according to the Energy Information Administration.
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