Scheme Approval Process
Many commercial oil sands operations require a project scheme, which allows for larger scale production on smaller parcels of leased land rights.
appliesfor a scheme approval from the
Alberta Energy Regulator.
A public hearing may be held to allow citizens to express potential concerns or support.
Environmental impact assessments, water use request and socio-economic impact studies are submitted to Alberta Environment and Parks, where they are reviewed and factored into the approval process.
AER and Regulatory Approval
The AER and other regulatory bodies approve an oil sands scheme based on factors affecting lands and wells.
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.