Alberta Oilsands

The Athabasca Oil Sands Project (AOSP)

Chevron Canada Ltd. holds a 20% non-operated working interest in AOSP. Other project participants include Shell Canada Ltd. (60%) and Marathon Oil Canada Corporation (20%). AOSP consists of the Muskeg River Mine and the Scotford Upgrader. The Muskeg River Mine is located north of Fort McMurray, Alberta and is linked by pipeline to the Scotford Upgrader, located northeast of Edmonton. Through AOSP, bitumen is mined and then upgraded into synthetic crude oil using hydroprocessing technology. At full production, the project yields 155,000 barrels of bitumen per day. Production at AOSP began in 2003.

Chevron Canada Limited has elected to participate in the first phase of expansion of AOSP. This 100,000-barrel-per-day project includes a new mine, named Jackpine, and expansion of upgrading facilities. It is expected to increase bitumen production capacity to more than 255,000 barrels per day upon completion in 2010/2011. The projected cost of this expansion is $13.7 billion. Chevron’s share of production and project costs is 20%. In 2008, a decision was made to postpone a second expansion at AOSP.

 

Ells River “In Situ” Oil Sands Project

In 2006, Chevron Canada Limited acquired oil sands leases in the Athabasca region of northern Alberta. The leases cover more than 85,000 acres and contain an estimated 7.5 billion barrels of oil in place. Chevron Canada holds a 60% interest and is project operator. Other project participants include Shell Canada Limited (20%) and Marathon Oil Canada Corporation (20%).

The Ells River leases have the potential for production through Steam Assisted Gravity Draining, an industry-proven “in situ”technology that uses steam and horizontal drilling to extract the bitumen. Chevron completed a 63-well appraisal program in 2008 and a 17 sq km seismic program in 2009. In June, 2009, Chevron decided to place the Ells River Project on hold, given the other superior investment opportunities in the current Chevron global upstream portfolio.