There could be a large-scale oilsands project under construction to extract Saskatchewan bitumen by 2012 if a timeline envisioned by Oilsands Quest Inc. president and CEO Christopher Hopkins comes to pass.
Hopkins gave an update Wednesday on the company and the progress made developing its Axe Lake bitumen deposit to the Greater Saskatoon Chamber of Commerce.
If his timeline is followed and a senior oil company partner buys in to develop Axe Lake, it would require spending in excess of $5 billion to get 100,000 barrels of bitumen out of the ground daily. Even more spending on infrastructure would be required to move that bitumen south where it could be upgraded.
That 100,000 barrels, in today's terms, is equal to one-third of the petroleum Saskatchewan produces each day from conventional light and heavy oil in the southern part of the province, Hopkins said.
As the company reported earlier this fall, an independent analysis of the 23 months work done so far on the core Oilsands Quest, 36-square-mile deposit shows a resource in place of more than one billion barrels, with a high estimate of 1.5 billion.
"This is a world-class discovery. It's not a minor discovery," Hopkins told his audience. "This is as big as they get."
This winter, the company is doing more delineation drilling on the core Axe Lake site and looking for bitumen deposits beyond the core area on the more than 700,000 acres of land it has under lease, including half a million acres in Saskatchewan. On its remaining Saskatchewan lands, plus a parcel recently bid on by Calgary-based Petrobank, there could be potential deposits in Saskatchewan ranging as high as 8.5 billion barrels, Hopkins estimates.
More than 400 people will be working in the permanent camp this winter located on an all-weather access road connecting to Highway 955, about two hours drive north of La Loche. There will be eight drill rigs operating and seismic crews "shooting" some 1,800 kilometres of 3D seismic lines on unexplored parts of the company's property.
The company is seeking regulatory approval in Saskatchewan to do a reservoir field test this winter where portable steam generators will send down steam into the formation to "assess the reservoir's response" and help engineers figure out the most cost-efficient extraction methods.
In an interview, Hopkins says he appreciates the appointment by Premier Brad Wall of Meadow Lake MLA Jeremy Harrison as a legislative secretary to Energy and Resources Minister Bill Boyd, with Harrison having special responsibility to investigate the opportunities in oilsands development.
"I think it's a marvelous step they've taken in addressing oilsands as a designated business like that," said Hopkins, adding he hopes to meet with Boyd soon.
At the legislature in Regina, Boyd said that was his intention as well, adding the Saskatchewan Party government will move to develop the province's bitumen resources in an "environmentally friendly fashion."
"We want to sit down at an early opportunity and discuss this with the players involved and I think you'll see moves in that direction fairly soon," Boyd said.
mlyons@sp.canwest.com