All produced bitumen from Crown Rights is subject to royalty.
Once the developer has an AER approval, he is now eligible to apply for project approval for royalty purposes through the Oil Sands division of Alberta Energy. This step is not mandatory, as
royalties on bitumen can be paid under the Non-Project Well Royalty, but there are advantages to applying under the
Oil Sands Royalty Regulation .
Applications are reviewed by engineers and economists for a variety of technical and fiscal factors and considerations.
Construction of extraction facilities can begin at any time during Stage 2.
Extraction facilities include wellpads, mine sites, and processing infrastructure.
The cost to build mining operation facilities or in situ facilities and an on-site upgrader costs in the billions of dollars.
Construction costs can vary depending on the cost of labour, steel and other building material prices, and the location of the project. Construction cost can significantly impact the payout* date of a project.
*For a pre-payout project, the first date at which the cumulative revenue of a project first equals the cumulative cost of the project.