Statoil starts production of oil sands

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CALGARY, Alberta, Jan. 28 (UPI) -- Norwegian energy company Statoil said it launched oil sands production at a demonstration facility in Canada one month ahead of schedule.

Lars Christian Bacher, the president of Canadian operations for Statoil, said his company was pleased with early oil production from the Leismer demonstration project in Canada's Alberta province.

"This is truly a milestone for our business in Canada," he said in a statement.

The first phase of operations for the Leismer demonstration project is approved to produce 10,000 barrels of oil per day. Capacity could reach 18,800 bpd within two years pending approval by the Alberta government.

Statoil's lease is in the oil-rich area of Athabasca in northeast Alberta. The next phase of operations in the region could bring another 40,000 barrels of oil sands per day on stream, the company said.

"Over the last three years we have increased our understanding of the oil sands business and feel we are now in a good position to apply what we have learned," said Bacher.

Statoil expects to ship oil sands from the Leismer project in the Athabasca region of Alberta in late 2011.