CALGARY, Alberta (Reuters) - Total SA (TOTF.PA) is content with the pace of developing its Canadian oil sands assets even as Suncor Energy Inc (SU.TO), its joint venture partner, said it was in no rush to bring a host of multibillion-dollar projects on line, an executive said on Tuesday.
Jean-Michel Gires, head of Total’s Canadian unit, said the French oil major is not looking to bulk up on more northern Alberta oil sands assets as it and Suncor move forward with studying two mines and an upgrading plant.
“We want to take advantage of the inputs of the two companies in this partnership ... that is what we are doing. We are 18 months after the initial agreement and we are very pleased with the way this progressed,” Gires told reporters after speaking to a business audience.
Total and Suncor are conducting the front-end engineering work on the Joslyn and Fort Hills mines and Voyageur upgrader that would process up to 200,000 barrels a day of production, and the companies have said they aim to make go-ahead decisions sometime next year.
Suncor Chief Executive Steve Williams said in July that he would no longer commit to an ambitious corporate growth program that would have seen output nearly double by the end of the decade to 1 million barrels a day, saying he was not interested in “growth for growth’s sake.”
He also said each of the projects would be evaluated on its own merits, not necessarily as a package, amid speculation that decisions could be pushed to the end of the year.
Williams made the comments as fears grew across the industry that inflation that plagued oil sands development in the last decade were returning as more projects move forward, driving up labor and materials costs.
Gires said he would not give a target date for approving the projects. He said Total and Suncor are making progress with the engineering and making sure the developments are “aligned with each other.”
“It’s more important that we can deliver good projects and make them profitable and align them correctly, so that’s what we are up to for the time being,” he said.
Meanwhile, Gires said he believes Total it has enough projects to develop in Canada, including its Surmont steam-driven development, a joint venture with ConocoPhillips (COP.N). A second phase at Surmont is expected to boost output from 25,000 barrels a day to 136,000 barrels a day by 2015.
ConocoPhillips has a half share of its interest on the auction block along with stakes in a host of other undeveloped oil sands leases. Last month, sources said a trio of Indian companies led by Oil and Natural Gas Corp (ONGC.NS) bid $5 billion for the assets, though ConocoPhillips declined to comment.
Gires also would not say if Total was interested in the properties, which would be developed using steam-assisted gravity drainage technology, where steam is injected into the earth so the bitumen can be pumped to the surface.
“For the time being we have 50 percent of this asset. We’re very pleased as well with the partnership with ConocoPhillips. The two companies have learned a lot about SAGD and in situ developments. We are on a very promising lease that can deliver probably other steps later on than just Surmont 1 and Surmont 2,” he said.
Editing by Frank McGurty