The National Post is Canada’s second largest national paper.
CALGARY — Athabasca Oil Sands Corp.’s name change Thursday to Athabasca Oil Corp. reflects its new focus on tight oil – and industry’s rush to the new technologyintensive play type that could see Alberta emerge as another North American hot spot.
Only two years after expanding into tight oil in Alberta, the former oil sands pure play has been so successful unlocking oil from shale and sandstone formations it expects them to produce as much as 10,000 barrels a day by the end of the year – while its oil sands projects are still under development.
Sveinung Svarte, president and CEO of Athabasca, said he sees huge tight oil potential in Alberta, where the geology is similar to prolific tight oil plays such as the Bakken in North Dakota and the Eagle Ford in Texas.
“The Duvernay, the Montney and the Nordegg are probably going to be one of the most active development areas in Canada, similar to activities in the Bakken, with similar results,” Mr. Svarte said after addressing the company’s annual meeting in Calgary.
Companies such as Athabasca, Talisman Energy Inc., Encana Corp. and Devon Energy Corp. are pushing spending into tight oil, which some say is changing the dynamics of the global oil market.
Valero, the largest U.S. refiner, recently predicted that growing light, sweet crude production from tight plays will push out all imports of this type from the U.S. Gulf by 2014 to 2016.
Mr. Svarte said the move to tight oil has delivered beyond his expectations, but he doesn’t see the new play type competing with the oil sands.
That’s because tight oil formations tend to produce a lot quickly, but also decline quickly. Oil sands projects, on the other hand, take years to ramp up, but produce for half a century.
However, he said tight oil is already siphoning resources away from the natural gas side of the business, which is struggling with uneconomic prices.
“We see already that it’s very easy to hire people from the gas producers,” he said. “All this shutting down of gas activity is very good for light oil producers.”
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2012/05/11/alberta-may-be-tight-oil-hot-spot/?__lsa=4abfde00