Japan Petroleum Exploration Co. has decided against restarting a pilot project at its Hangingstone Oilsands project.
JAPEX, who owns 75 per cent interest, announced on Tuesday they were closing the Demo facility, located around 50 km southwest of Fort McMurray.
The section hasn’t been operational since the Horse River wildfire as the company wanted to wait until oil prices started to stabilize.
“We have been evaluating the possibility to re-start operations but in the continuing severe business environment including low oil prices and the increasing technical risks of a re-start due to declining temperature and pressure of the oil sands layer, we have decided not to re-start production operations using SAGD method,” the release said.
The Demo area which started production in 1999, run by Japan Canada Oil Sands Ltd., a subsidiary of JAPEX, produced around 35 million barrels of bitumen.
Meanwhile, the Hangingstone expansion project began operations in April, injecting steam into the wells raising the “temperature and pressure of the oil sands layer located 300m underground.”
Over that time, they’ve been producing around 1,000 barrels per day. In 2018, production is expected to rise to 20,000 barrels per day.