Calgary-based Imperial Oil has increased its estimate of the cost of the first phase of its Kearl oilsands project in northern Alberta by $3 billion.
In an investor presentation filed with U.S. and Canadian regulators on Thursday, the oil company said the cost is now expected to come in at $10.9 billion, compared with its earlier estimate of $8 billion.
It also disclosed that instead of tackling the project in three phases, it now aims to boost production from the first phase by unlocking spare capacity in the system before moving on to a second mining phase. Condensing the project to two phases is a source of the extra costs, the company said.
Project capital costs for the full development are also unchanged at about $5 per barrel, about what Imperial expected when it decided to go ahead with Kearl Phase One two years ago, Glenn Scott, senior vice-president of resources, said in his written remarks to investors.
Construction is underway and phase one is expected to start producing bitumen on schedule next year.
Imperial is majority-owned by U.S. energy heavyweight ExxonMobil Corp., the world's largest publicly traded oil company.
The first phase is expected to produce up to 110,000 barrels per day with output rising to as much as 345,000 barrels a day when all three phases are finished.