|Athabasca's properties. Note Grossmont is carbonate,|
which means it may not be developed for a long time.
Athabasca Oil Corp. (AOC) announced it had internally sanctioned the first 12,000 barrel per day phase of its Hangingstone project. It had received government approval for the phase on October 3rd. First steam is expected in late 2014, and first production in early 2015.
Although the deal is not final, it will apparently proceed as a 50/50 venture with Kuwait Petroleum, as hinted at in September. AOC estimates it will cost $536 million.
I'm interested to see how the project turns out. AOC is bullish on the property, as you'd expect, although I think there are some valid questions about it. For one, parts of the field are quite shallow, raising questions about whether they can operate the steam chambers at acceptable pressures for fear of rupturing their cap rock and having a steam blowout, like Total had at Joslyn. For another, PetroChina never showed much interest in the field when it bought interest in Dover and MacKay River, two of AOC's other fields. AOC has since sold its remaining share of MacKay River to PetroChina, but apparently holds its 40% interest in Dover.
So will Hangingstone prove to be a case of an unappreciated gem belatedly developed, or another project fated to failure because of its reservoir? Stay tuned for 2015, I suppose.