News – full story
Canada’s oil sands output is set to jump more than 200% by 2030
29/11/2012
FW buys Three Streams to up Canadian presence
Eyes SAGD expertise with crude sector set to expand
Adam Duckett
FOSTER WHEELER has bought Three Streams Engineering as the contracting major seeks to take a larger foothold in Canada’s buoyant oil sands sector.
Three Streams is a full service engineering, procurement, and construction management company with upstream and downstream projects in Western Canada. These include projects to expand and debottleneck steam-assisted gravity drainage (SAGD) facilities used to produce oil from oil sands deposits.
A pair of horizontal wells are drilled into the deposit and high pressure steam is continuously injected in to the upper wellbore, heating the oil and reducing its viscosity so that it drains into the lower bore before being pumped out for processing. Three Streams also designs and installs the pipelines that distribute products produced at these facilities.
“The acquisition of Three Streams is part of our stated strategy to grow the upstream capabilities and the geographic footprint of our Global Engineering and Construction Group,” says Kent Masters, CEO of Foster Wheeler. “Additionally, with Three Streams, we have taken a step to increase our presence in the Canadian SAGD market.”
It’s likely to be a lucrative market as the Canadian Association of Petroleum Producers estimated earlier this year that output from the country’s oil sands regions would climb steadily from 1.6m bbl/d last year to 5m bbl/d in 2030.
Just today, Athabasca Oil announced that it has approved a C$536m investment in its Hangingstone 1 SAGD project. The first phase of the 12,000 bbl/d project is scheduled to start production in early 2015, and with two further expansions could reach 80,000 bbl/d.
Canada’s huge untapped energy resources are attracting a lot of attention, especially from Western energy majors struggling to boost output. The Wall Street Journal reports in its profile of ExxonMobil today that UBS analysts expect production at the US major to fall 5.7% this year, along with declines of 2.9% at Chevron, 2.7% at BP and 2.2% at Shell.
Efforts to boost production are becoming increasingly difficult for Western majors as lucrative oil fields in convenient locations have become scarce and state-owned oil companies in the likes of Asia and Russia have become more aggressive in their bids to secure the best projects.
Last month ExxonMobil bid US$2.6bn for Canadian explorer and producer Celtic Energy to secure its promising unconventional resources in British Columbia and Alberta. Today, it agreed to sell a 50% stake to Canada’s Imperial Oil in a move thought to be aimed at speeding up approval of the bid.
