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Imperial Approves $8.7 Billion Expansion of Kearl Oil Sands

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Dec. 21 (Bloomberg) -- Imperial Oil Ltd., the Canadian company that’s 70 percent owned by Exxon Mobil Corp., said its board has approved a plan to boost production at its C$8.9 billion ($8.67 billion) Kearl oil-sands project in Alberta.

The expansion is expected to add 110,000 barrels a day of crude production by late 2015, the Calgary-based company said in a statement today. The project may have output of as much as 345,000 barrels a day by about 2020, more than double the company’s total 2010 production of 246,000 barrels.

Imperial and Exxon own Kearl, located 70 kilometers (44 miles) north of Fort McMurray, Alberta. The decision to invest in the expansion will allow the companies to book additional reserves this year from the project. Exxon more than doubled its Canadian oil-sands reserves in 2008 after approving the project’s initial investment.

The expansion will develop 3.2 billion barrels at a cost of about $6.20 each, Imperial said. The area is estimated to hold 4.6 billion barrels.

Imperial gained 1.5 percent to C$43.73 at the close in Toronto. Exxon, based in Irving, Texas, rose 1.4 percent to $83.12 in New York.

To contact the reporter on this story: Bradley Olson in Houston at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Tina Davis at tinadavis@bloomberg.net

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