Many factors influence the perception of economic performance for developing projects. Some of these factors can be controlled by the developer. Some are outside the developer's sphere of influence. Technology selection, management systems, stakeholder involvement, environmental responsiveness and risk management are some areas that developers can influence by their actions. However, interest rates, product prices and currency exchange all have a measurable effect on project economics, yet are beyond the developer's control This paper briefly outlines the economic considerations for evaluating mineable oil sands development projects and focusses on the key factors that are unique to the development of these projects in general, and to the OSLO Project in particular

The OSLO Project is a proposed ﹩5 billion energy development that entails constructing an open pit oil sands mine and a bitumen extraction facility north of Fort McMurray, Alberta, coupled to a bitumen upgrader in the Redwater area. The completed development will produce almost 30 million barrels of high-quality synthetic crude oil a year. A capital intense development with immense labour demand, the project will require almost ten years from the conceptual proposal through its design, regulatory approval, execution and construction stages before the first cash flow is realized.

When the OSLO Project is completed, its production, along with the synthetic crude oil supplied from other mineable oil sands operations in the Fort McMurray area, will provide almost 300,000 barrels of oil a day or 100 million barrels a year. This resource is significant by any standard of production or consumption and it represents an important opportunity for the sustained creation of wealth and security of energy supply in Alberta and Canada.


Two very successful mineable oil sands developments are operating in Alberta today: the Suncor Inc. and Syncrude Canada Ltd. plants. The mining and upgrading facilities for both of these operations are located north of Fan McMurray. These operations can be considered to be the first and second generation mineable oil sands projects. Both projects have been presented with major challenges throughout their history and required a mixture of faith optimism cowage, perseverance and ingenuity to make them the success mat they are today. And make no mistake about it; they are very successful. Canadians, and Albertans in particular, can take a great deal of pride in the Suncor and Syncrude accomplishments.

Industry has learned a lot from these projects, particularly how to plan and execute such developments effectively. This knowledge, together with the current world oil demand and supply outlook and oil pricing scenarios and forecasts for the future, offers a great opportunity to continue with the development of Alberta's significant oil sands resource. By proceeding with third generation mineable oil sands projects, such as the OSLO Project developers can create wealth for the nation and make a significant contribution to the security of energy supply that will benefit all Canadians.

The OSLO facilities will be oriented much differently than the previous oil sands operations with major components [0 be constructed at two locations:

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