• The new Federal Budget proposes to treat the cost of acquiring oil sands leases and certain oil sands resource property as a Canadian oil and gas property expense, as opposed to its current treatment as a Canadian development expense. The result will be a deductible rate of 10% per year on a declining basis, instead of the current 30% per year, effective for acquisitions made on or after March 22, 2011. The Budget also proposes new treatment for pre‐production development expenses incurred for the purpose of bringing new oil sands mines into production. Instead of treating such expenses as Canadian exploration expenses, the proposal will treat them as Canadian development expenses, deductible at a rate of 30% per year. The current Canadian exploration expense treatment will continue with respect to expenses incurred before March 22, 2011, and for expenses incurred before 2015 on new mines on which major construction commenced prior to March 22, 2011.
  • ConocoPhillips has announced plans to spend approximately USD $1.2 billion in Foster Creek/Christina Lake and Surmont in 2011, and between $1 billion to $1.5 billion per year for the foreseeable future. Site work has commenced and engineering work is nearing completion for the 83000 bpd expansion project at Surmont. Steam injection at the expansion is expected by the end of 2014, with oil production commencing in 2015.
  • BlackPearl Resources plans to inject steam into its Blackrod pilot SAGD project in the second quarter of this year. BlackPearl has a 100% working interest and is the operator of the oilsands project. The company expects results late in the year, following which it expects to apply for a 40,000 bpd commercial development in early 2012.
  • Anglo‐Dutch Shell has announced that the 100,000 bpd expansion to its oilsands project, which is expected to produce 255,000 bpd, will be up and running by the second quarter of 2011. Shell’s interest in the northern Alberta project is 60%, with Marathon Oil and Chevron each holding a 20% stake.