|
A conversation with Total E&P Canada’s new president and CEO, Jean-Michel Gires, on the growing importance of Alberta’s oil sands to global energy supply
By Derek Sankey
It was once written off as being too expensive and technically unfeasible to develop as a resource. Today, it has clearly found itself thrust into the global media spotlight. Sleepy old Alberta towns have been transformed into mini-boom centres as global energy companies poured billions of dollars into the development of Alberta’s oilsands around Fort McMurray. Even after a downturn, places around Fort McMurray are changed.
The sheer size of the oilsands resource is massive, comparable to the other largest proven oil reserves on the planet in Saudi Arabia. When France-based energy giant Total SA’s Canadian subsidiary announced its agreement to acquire Calgary-based UTS Energy for nearly $1.5 billion in early July, it marked the completion of a 19-month saga to gain a 20 per cent stake in the massive Fort Hills oilsands property owned by UTS.
It is just another step in Total E&P Canada (TEP Canada) Ltd.’s long-term strategy of investing $15-20 billion in the next 10 to 15 years in the Athabasca oilsands. Yet, a series of recent high-profile international deals have put the oilsands under even more scrutiny by everyone from U.S. lawmakers to NGOs and environmental groups to the general public around the world.
No longer is it Alberta’s resource. It is truly a global interest. Jean-Michel Gires stepped into the role of president and chief executive of TEP Canada last September and led it through the completion of the recent UTS acquisition after a previously failed attempt by his predecessor when market conditions went sour.
With its completion, it will make TEP Canada a partner with local industry pioneer Suncor in the Fort Hills project after Suncor’s merger with PetroCanada – the previous 60 per cent owner in the project. “We are pleased to have Total as a partner in the project and their investment underlines that major international players continue to see value and long-term benefits in responsible development of the oilsands,” comments Sneh Seetal, a Suncor spokeswoman.
TEP Canada’s stake in the oilsands is clearly pushing ahead as part of the growing global attention – including a lot of negative media coverage, political pressure and misinformation that has been spreading like wildfire around the world about so-called “dirty oil” or “tarsands” – amid an atmosphere of serious environmental concern.
Gires takes them seriously. I sat down with him in his office in downtown Calgary to understand what TEP Canada brings to the table. Born in the southern French town of Nice and having worked around the world – in the U.S., U.K., Spain, Portugal, Venezuela, his native country of France, and others – he brings a global perspective that seems apt, considering the shifting nature (and ongoing public relations war) surrounding this resource.
His perspective is also shaped by his passion for photography. He has published two works of his photo compilations and held various exhibits, much of which relates to his unique attention to the visual effects of reflection, especially on imperfect landscapes and features. As we sit in his office, today he reflects on the large and more global implications of the development of Alberta’s oilsands.
Q: Why is Alberta significant to the global energy picture?
A:In a global context, Alberta is a very interesting spot for us. We have virtually no oil and gas in France, so if you want to expand your business, you have to go abroad. There are potentially 300 billion barrels of oil to be produced in Athabasca over time and we can compare it to Saudi Arabia as one of the most important oil resources in the world.
Q: What is Total’s current overall stake in the oilsands?
A:It’s been a 10-year adventure for Total in Alberta. It will emerge as a world-class resource. Our first project was a pilot in 1999 when SAGD (steam assisted gravity drainage) was something very new. It’s now producing 22,000 barrels of oil a day (boe/d). Recently, we made the decision to go for phase two, which is going to produce 110,000 boe/d by 2015.
In 2005, we acquired Deer Creek, which gave us access to the Joslyn North mine and we are seeking regulatory approvals within the next year to start producing another 100,000 boe/d in the area by 2017 with Japanese and U.S. partners.
In 2008, we acquired Synenco, which gave us access to the Northern Lights projects and a 50 per cent stake with [Chinese corporation] Sinopec. We like partnerships and we are going to develop several partners – American, Japanese, Chinese and Canadian. More recently we signed with UTS after we tried at the beginning of 2009, but it was very difficult timing when the market was down, share prices were down and oil prices were down. So we started again and now we have a 20 per cent stake in the Fort Hills mine with Suncor. We’d like to close the loop.
In total, we’ll be producing about 250,000 boe/d of bitumen in Canada and spending $15-20 billion in the next 10 to 15 years. It’s been much more of a business approach trying to gain access to the assets, but we are not going to just go through those projects. We want to reconcile the environmental and social dimensions of those projects.
Click here to see part 2 of the article |
|
Download Current Issue
(21.7 MB)
 |
