Amoco Canada Petroleum Co. Ltd. plans a $100 million spending program this year for heavy oil development in the Primrose and Wolf Lake areas of Alberta.
The fields are about 160 miles northeast of Edmonton.
What's more, Amoco expects to spend as much as $500 million for heavy oil projects during the next several years if market demand remains favorable.
Dave Newman, chairman and president of Amoco Canada. called heavy oil a "core business" for his company He said, "The investment in 1995 sustains our current level of activity, which we expect to continue over the next several years."
The program aims to increase heavy oil production in the area from the current 7,500 b/d to 55,000 b/d and increase Primrose reserves by 200 million bbl.
Development drilling will continue in the Primrose area with more than 100 wells by the end of 1996. In nearby Wolf Lake, the emphasis will be on maintaining production through steam injection and horizontal drilling. An additional 27 horizontal wells will be drilled into the existing vertical well patterns.
An interim royalty agreement covering production for the Primrose project is final. A permanent oilsands royalty agreement and fiscal terms is under negotiation between the Alberta government, the federal government, and industry
Amoco's expansion is one of several disclosed since prices of heavy oil advanced this year. The advance results from added refining capacity for such crude in the U.S. Midwest.
Among other industry projects, Imperial Oil Ltd. has a $240 million project under way to boost its Cold Lake production to 127,000 b/d by 1997 from today's 90,000 b/d.
Strike Energy Inc., Calgary, plans to spend $40 million on a project at Bolney, 35 miles northeast of Lloydminster, Sask. It will spend $4 million this year on an eight well horizontal drilling program and plans to drill 80-90 wells in the next 4-5 years.
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