B.C.’s Energy and Mines Ministry has selected Ledcor Projects Inc. of Vancouver for a $38-million project to design, build and finance upgrades to a key resource road in northeast B.C., pending negotiation of a final contract.

The B.C. government wants to upgrade the Sierra Yoyo Desan (SYD) resource road to open up the region to year-round oil and gas exploration.

The 173-kilometre SYD road starts at the end of a 15-km public road and connects to the Alaska Highway just south of Fort Nelson. Together, the two roads provide the main access to more than 27,000 square kilometres of oil and gas territory in northeast B.C.

Energy and Mines Minister Richard Neufeld says he’d like the SYD project, which includes a new bridge over the Fort Nelson River and a new bypass, to be completed by December 1, 2005.

Neufeld also announced $9.5 million in funding to match expenditures by three Calgary oil companies upgrading resource roads in northeast B.C. The B.C. government has committed to provide $30 million a year in royalty credits for resource road development, under the provincial Oil and Gas Development Strategy for the Heartlands.

Canadian Natural Resources Limited and Penn West Petroleum will receive a total of $2.5 million in credits, while EnCana Corp. will get $7 million.

GOOD OPTICS
Bob Blair has seen the light.

The former CEO of Nova Corp. now heads up publicly-traded Photon Control Inc. in Burnaby, B.C. The two-year-old company has developed a new, non-intrusive optical gas flow meter that uses light or photons for measurement and control.

The meter is capable of measuring variable gas flows at low pressure. More than 10,000 oil wells in Alberta release gas at low pressure.

Other potential applications include measuring flow of vented gas from wellheads and storage tanks, flared gas, and gas flow from coalbed methane and shallow well production.

There are several advantages of using a light-operated meter rather than current technology that runs on electricity.

With light, there’s no interference by electromagnetic and radio waves or risk of fire from sparking due to corrosion and short-circuiting.

Photon Control says it has signed an agreement with a leading Calgary-based oil firm to use the optical flow meters to measure coalbed methane gas in a project starting this spring.

Photon will also supply its meters to measure gas flows in a $7.9-million biogas recovery project in Vegreville, Alta. That project, by Highmark Renewables and the Alberta Research Council, will turn cattle feedlot manure into electricity, fertilizer and reusable water.

NEXEN CLEANS UP
Calgary oil giant Nexen Inc. is winning kudos from the B.C. government for a $40-million, four-year cleanup of an old bleach- manufacturing plant site on the Squamish waterfront. B.C. Water, Land and Air Protection Minister Joyce Murray and other dignitaries presented a special environment award to Nexen for setting “a new standard of excellence” in rehabilitating the site, which once produced bleaching products for the pulp and paper industry.

The government, as part of the $1-billion B.C. Rail Investment Partnership, had in November approved an agreement-in-principle with the District of Squamish and Nexen to transfer 71 acres of the cleaned-up site to the district.

The site is owned by B.C. Rail and operated under long-term lease by Nexen and its predecessors. Nexen’s completed cleanup is a crucial step in enabling the district to revitalize its downtown core and waterfront, with development plans that include a full-service marina, a passenger ferry terminal, cruise ship berths, and light industrial manufacturing and transportation.

As part of the cleanup, Nexen shipped more than 1,700 rail cars of contaminated soil and sludge to secure storage in Alberta.

The company voluntarily increased the developable land base on the site by 44 per cent, an initiative that “will be of lasting social and economic benefit to the people of Squamish,” said Mayor Ian Sutherland.

WHIRLWIND OPERATION
That’s right, Toto, this company operates in Kansas.

Vancouver-based Heartland Oil and Gas Corp. says it has completed on time and within budget the first phase of a coalbed methane (CBM) pilot program in Kansas.

The five-well program is in the Forest City Basin of northeast Kansas, where earlier drilling by Heartland encountered some of the thickest methane gas-trapping coal seams in the basin.

Gas pressure in the five new wells continues to build as expected, while the amount of brackish water produced along with the gas – always a potential environmental problem with CBM development – “is less than anticipated,” Heartland says. The company is injecting all the produced water into an approved disposal well.

Heartland plans to start drilling of three new five-well pilot programs, plus three additional water disposal wells, on its 235,000-acre Kansas property by the end of March.

WELLS-A-POPPIN'
The Petroleum Services Association of Canada (PSAC) is forecasting that 20,005 oil and gas wells will be drilled in 2004.

That’s five per cent higher than PSAC’s original 2004 estimate of 18,965 wells, released in late October last year.

The main reason for the increase is continued strong drilling activity – especially for shallow natural gas – in Alberta, where PSAC estimates a total of 14,790 wells will be drilled this year. The projection for B.C. is 1,100 wells and for Saskatchewan 3,900.

“Drilling activity has not abated in the shallow gas areas of southeastern Alberta, southwestern Saskatchewan and northeast B.C.,” says PSAC president Roger Soucy.

Overall, the 2004 forecast is slightly lower than the 2003 well count, due to an expected five-per-cent reduction this year in industry’s capital expenditures on oil and gas exploration.

DOLLAR DAZE

One thing that could put a damper on drilling prospects is the soaring Canadian loonie, which is cutting into some companies’ fourth-quarter earnings and could trim capital spending this year.

Imperial Oil Ltd. is blaming the higher Canadian dollar, which bites into commodity earnings based on U.S. dollars, for a 44-per-cent drop in the company’s fourth-quarter profits.

Earnings fell to $255 million or 71 cents a share, down from $457 million or $1.21 a share during the same period last year.

Despite the profits dip, higher prices for natural gas and oil pushed Imperial’s earnings for 2003 to an all-time high of $1.68 billion, up from $1.22 billion in 2002.

Suncor Energy Inc. also reported record earnings for 2003, breaking the billion-dollar mark for the first time. Suncor’s net earnings jumped 42 per cent last year, to $1.08 billion ($2.43 a share) compared with $761 million ($1.64 a share) in 2002.

Expect similar stellar 2003 results from other majors, such as Petro-Canada, Shell Canada Ltd. and EnCana Corp., reporting this month.