Osum cleared for Taiga project
Cold Lake thermal operation is company’s first venture
A fledgling oilsands firm with no production but $1 billion in capital has won approval from the Energy Resources Conservation Board for its first project, a 35,000 barrel per day thermal project near Cold Lake.
Osum Oil Sands Corp. plans to build the Taiga project in stages, with an initial 10,000 bpd output, using both steam assisted gravity and drainage (SAGD) as well as cyclic steam stimulation (CSS) in the complex reservoir.
“The majority will be SAGD, but we will use CSS where appropriate. We are looking at the reservoir we have and at the right technologies to recover the resource,” said Steve Spence, president and chief operating officer of the Alberta-based company. “It’s got to be the right technology for the right dirt.”
Spence said Cold Lake has great potential. “It is a very important area and the fact we are a small company among large companies tells you how good this area is.”
Because Osum is a private company, Spence wouldn’t discuss project costs, but said Taiga is “right on the benchmark of projects today.”
Taiga sits on 359 million barrels of proved reserves plus 105 million in probable reserves – enough to support a 45,000 bpd plant for 30 years.
Over the plant’s life, Osum estimates it will spend $2.9 billion for construction, operations and maintenance, thereby supporting local businesses in the Cold Lake and Bonnyville area.
The ERCB approval comes after a technical assessment. There was no public hearing because no group was opposed to the project.
Osum was in the news in 2007 after its seismic testing program under scenic Marie Lake enraged local residents. In a rare move, the government pulled the firm’s leases.
Osum changed direction and opted for a more conventional oilsands project while it worked to build support in the surrounding communities.
With no source of revenue, Osum has been raising money over the years for both Taiga and its Saleski project in the Grosmont carbonate trend – where it has a joint venture with Laricina Energy in developing pioneer technology to produce bitumen in the region between Fort McMurray and Peace River.
In addition to earlier fundraising, Osum announced it had raised another $500 million from a group that included the Government of Singapore, two large Canadian institutional investors and existing major shareholders Warburg Pincus, Blackstone Capital, BlackRock Financial Management, Korea Investment Corp. and Goldman Sachs.
“We have current capital sufficient for all of our activities in the carbonates and to take Taiga through its detailed engineering phase and some long lead order items,” said Spence. He said there is additional engineering to do and that final approval of Taiga could be given before the end of 2013.