ConocoPhillips reports first oil at Surmont 2 oil sands facility

HOUSTON -- ConocoPhillips has delivered first oil at its Surmont 2 in-situ oil sands facility in Canada, the company said Tuesday.

Construction of the Surmont 2 facility, the largest single-phase steam-assisted gravity drainage (SAGD) project ever undertaken, began in 2010.

Earlier this year, ConocoPhillips announced first steam, the initial step towards production. Since that milestone, steam has successfully heated the reservoir to a point where the well pairs can be converted to a SAGD configuration and allows the oil to flow. Production was declared once the inspected product was successfully routed to sales tanks. 

Production will ramp-up through 2017, adding approximately 118,000 bopd gross capacity. Total gross capacity for Surmont 1 and 2 is expected to reach 150,000 bopd.

“The oil sands are an important part of our portfolio,” said Ryan Lance, chairman and CEO. “We’re pleased to see a project of this magnitude move from the capital phase to the production phase, knowing that it will produce for decades to come.”

The Surmont project is located in the Athabasca Region of northeastern Alberta, Canada, approximately 35 miles southeast of Fort McMurray. Surmont is operated by ConocoPhillips under a 50/50 joint venture agreement with Total E&P Canada.