- Cnooc's (CEO -3%) Nexen Energy says it will move ahead with work on a new C$400M (US$300M) expansion of its Long Lake project in Alberta, marking a rare return of foreign direct investment to Canada's oil sands.
- Nexen says the expansion will add 26K bbl/day to production at Long Lake, with first oil expected in late 2020.
- The decision shows Cnooc's willingness to invest in the oil sands and thus is a positive sign for the sector, and suggests some companies are starting to proceed with their mothballed projects as U.S. crude oil prices stay well above $60/bbl, says Kevin Birn, VP of North American crude oil markets at IHS Markit.
- The per-barrel costs of the new project are 50% lower than what Nexen was paying for expansion projects before the 2014 oil price collapse, Birn says.