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Canadian Oil Sands Development and Cross-Border Ventures

R.J. (Jack) Thrasher, Proceedings of 53rd Annual Rocky Mountain Mineral Law Institute (2007)

At roughly 173 billion barrels of currently recoverable oil and an estimated 1.7 trillion barrels ultimate volume of bitumen in place, Canada's oil sands are the world's largest known hydrocarbon resource.1.1 The size and potential of the resource and the need for expertise and capital to develop it have attracted major international participants to oil sands acquisitions and joint ventures. Oil sands developments extend over many years, often involving discrete phases of operations developed sequentially. The costs and limitations of upgrading and refining capacity in Canada have made integrated cross-border oil sands ventures increasingly attractive. This chapter examines the nature of the resource, its recovery, transportation, and processing, the legal and regulatory regimes applicable to its exploration and development, and related environmental and other issues, as well as challenges facing its future development. It will also discuss structuring, governance, and operational aspects of such cross-border ventures.
§ 2.02 Background--What Is It and How Is It Produced?
The oil sands are deposits of bitumen mixed with other minerals and water. Bitumen is a thick semi-solid form of crude oil. Commercial deposits of oil sands in Alberta are typically comprised of 10-20% bitumen, 80-85% other minerals, and 4-6% water. Canada's oil sands are found in three different locat