OPTI Canada
Encyclopedia
OPTI Canada is a Calgary
, Alberta
based oil sands development company. Established in 1999, its sole project is the Long Lake oil sands project
, of which it owns 35%. The remaining 65% is owned by project operator Nexen Inc.
i energy company Ormat Industries
, which had developed the OrCrude process in the 1990s. Ormat was approached by Calgary-based Nexen, who sent a delegation to Israel to supervise a test of the process. However, using OrCrude in the oil sands appeared uneconomical to Nexen, who withdrew. Ormat instead contacted Calgary's Suncor Energy
, with whom it founded OPTI as a 50-50 venture, with the Nexen delegation's head, Jim Arnold, as its first employee. Suncor's land at Long Lake was used by Ormat to build an OrCrude demonstration plant, using oil supplied by Suncor.
However, Suncor soon withdrew from the venture, and Nexen returned to take a 50% stake. In 2004, the OPTI decided to expand Long Lake to commercial-scale, and raised over $1.5 billion of private equity and debt. Also in 2004, OPTI underwent a $300 million initial public offering
(IPO). In January 2009 OPTI sold 15% working interest in Long Lake project to Nexen for $735 million, following an 89% drop in share price and increasing expenses. In early 2011 OPTI faced severe liquidity problems and an inability to service its $2.8 billion debt. Its shareprice closed at $0.30 on February 4, 2011, down from a high of $24.85 in 2008. Analysts believed bankruptcy or restructuring of the company was likely.
, which is used for hydrocracking in the refining process.
Typically, natural gas
is used to generate steam for SAGD extraction. However, using OrCrude-generated fuel significantly reduces the need for natural gas, reducing OPTI's operating costs by approximately $10 per barrel of oil produced.
Calgary
Calgary is a city in the Province of Alberta, Canada. It is located in the south of the province, in an area of foothills and prairie, approximately east of the front ranges of the Canadian Rockies...
, Alberta
Alberta
Alberta is a province of Canada. It had an estimated population of 3.7 million in 2010 making it the most populous of Canada's three prairie provinces...
based oil sands development company. Established in 1999, its sole project is the Long Lake oil sands project
Long Lake (oil sands)
The Long Lake oil sands project is an in situ oil extraction project southeast of Fort McMurray in the Athabasca oil sands region of Alberta. The project is a joint venture between Nexen, with a 65% interest, and OPTI Canada, with the remaining 35%...
, of which it owns 35%. The remaining 65% is owned by project operator Nexen Inc.
History
OPTI was founded in 1999 by IsraelIsrael
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
i energy company Ormat Industries
Ormat Industries
Ormat Industries Ltd. is a provider of alternative and renewable energy technology. To date the company has installed over 750 power units worldwide...
, which had developed the OrCrude process in the 1990s. Ormat was approached by Calgary-based Nexen, who sent a delegation to Israel to supervise a test of the process. However, using OrCrude in the oil sands appeared uneconomical to Nexen, who withdrew. Ormat instead contacted Calgary's Suncor Energy
Suncor Energy
Suncor Energy Inc. is a Canadian integrated energy company based in Calgary, Alberta. It specializes in production of synthetic crude from oil sands...
, with whom it founded OPTI as a 50-50 venture, with the Nexen delegation's head, Jim Arnold, as its first employee. Suncor's land at Long Lake was used by Ormat to build an OrCrude demonstration plant, using oil supplied by Suncor.
However, Suncor soon withdrew from the venture, and Nexen returned to take a 50% stake. In 2004, the OPTI decided to expand Long Lake to commercial-scale, and raised over $1.5 billion of private equity and debt. Also in 2004, OPTI underwent a $300 million initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
(IPO). In January 2009 OPTI sold 15% working interest in Long Lake project to Nexen for $735 million, following an 89% drop in share price and increasing expenses. In early 2011 OPTI faced severe liquidity problems and an inability to service its $2.8 billion debt. Its shareprice closed at $0.30 on February 4, 2011, down from a high of $24.85 in 2008. Analysts believed bankruptcy or restructuring of the company was likely.
Long Lake
The Long Lake project utilises OPTI's proprietary OrCrude process, which produces usable fuel from byproducts of extracted bitumen. This fuel is used to generate steam for bitumen extraction using steam-assisted gravity drainage (SAGD) technology. OrCrude additionally produces hydrogenHydrogen
Hydrogen is the chemical element with atomic number 1. It is represented by the symbol H. With an average atomic weight of , hydrogen is the lightest and most abundant chemical element, constituting roughly 75% of the Universe's chemical elemental mass. Stars in the main sequence are mainly...
, which is used for hydrocracking in the refining process.
Typically, natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
is used to generate steam for SAGD extraction. However, using OrCrude-generated fuel significantly reduces the need for natural gas, reducing OPTI's operating costs by approximately $10 per barrel of oil produced.