Imperial Oil puts Kearl on a path towards 240,000 barrels per day by 2020
Imperial Oil provided an update on its Kearl Mine this week as part of the company's fourth-quarter earnings release.
CEO Rich Kruger says the company has made "substantial progress" towards addressing reliability issues at oil sands mine. Kearl's bitumen production facility has a nameplate capacity of 220,000 bbl/day but has never been able to sustain those production rates due to reliability issues in the plant's upstream facilities.
The company says it has already seen improvements in the reliability of its mining and ore preparation plants. Average production at Kearl improved from 169,000 bbl/day in 2016 to 178,000 last year. Imperials says fourth quarter production would have been 14% higher if not for a planned maintenance turnaround. Kruger told investors the mine should average closer to 200,000 bbl/day for the full year 2018.
Imperial is now working to add crushing capacity and improve interconnection between the slurry plants. The enhancements come at a cost of $560 million ($400 million net for Imperial) and should be completed by the end of 2019, boosting production to 240,000 bbl/day by 2020.
Kearl produces bitumen, which is diluted with condensate and sold to market as a heavy crude blend. Bitumen realizations averaged $39.13 per barrel last year, up almost 50% from 2016. In contrast, synthetic crude produced at by the Syncrude upgrader brought in $67.58 per barrel in 2017, up 18% from the previous year.
The Kearl Mine is jointly owned by Imperial Oil (71%) and ExxonMobil Canada (29%).