As any observer of the oil sands industry knows, capital and operating costs of oil sands projects have increased significantly in recent years. Cancellations and postponements of major oil sands projects for reasons of excessively high costs were taking place before the price of oil started its decline in the second half of 2014. Cancelled or deferred projects include the $11.6 billion Voyager upgrader project and the $11 billion Joslyn mine project by Suncor and Total, and the multibillion-dollar Corner project by Statoil. In general, high costs have diminished the economic attractiveness of oil sands projects when oil was at US$100 per barrel, and are now threatening the industry with numerous additional project cancellations with oil in the range of US$30-$50 per barrel.
It is crucial to reduce costs in order to sustain the industry. The value targeted by this project to reduce costs and improve performance and recover more of the bitumen resource left in the ground by thermal technologies.
This project was launched in February 2015 in the context of the Oil Sands Competitiveness Initiative of Natural Resources Canada.