The developer of a multi-billion dollar oilsands project says approval announced Thursday by the Alberta government is critical to raising money or finding a partner with deep pockets to go ahead with construction.
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CEO John Festival of Calgary-based BlackPearl Resources (TSX:PXX) says he is relieved after receiving official endorsement for the 80,000-barrel-per-day Blackrod project more than four years after filing an application in May 2012.
Analysts estimate the first 20,000-barrel-per-day phase at Blackrod will cost about $800 million to build and Festival says that number is in the ballpark. Detailed estimates will come if the project is approved in future.
Festival says a pilot project operating at the Blackrod site has proven the viability of the project and suggests it will make money when benchmark oil prices are between US$55 and $60 per barrel. Oil has recently been trading in the mid-$40s.
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Alberta Energy also announced Thursday approval of a 3,000-barrel-per-day oilsands pilot project proposed by Husky Energy (TSX:HSE) and a 12,000-barrel-per-day project by privately held Surmont Energy, both of Calgary. The three are the first projects approved since the provincial NDP government announced late last year a 100-megatonne annual cap on greenhouse gas emissions from the oilsands.
All three projects would use steam injected through wells to melt the heavy bitumen and allow it to be pumped to surface.
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