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					Kearl
Project Description Update –
Kearl Mine Development         May 2006
This document contains forward-looking information on future production, project start-ups and future capital spending.
Actual results could differ materially due to changes in project schedules, operating performance, demand for oil and
gas, commercial negotiations or other technical and economic factors.


                                                   WB00200 06 05
PROPOSED DEVELOPMENT                                                            exploring for and producing oil and natural gas,
The Kearl Oil Sands Project is a potential oil-sands                            refining and marketing petroleum products, and
mining, pipeline and upgrading project in Alberta,                              manufacturing and selling petrochemicals. It has
proposed by Imperial Oil Resources Ventures                                     about 5,100 employees in two operating divisions -
Limited (Imperial Oil) and ExxonMobil Canada                                    the Resources Division and the Products and
Properties (ExxonMobil Canada). Imperial Oil                                    Chemicals Division.
Resources, as designated operator, submitted the                                Resources Division
mine application (leases included in Kearl                                      Imperial's Resources Division manages the
application are shown in figure) and related                                    company's natural resource operations and is based
environmental impact assessment to the Alberta                                  in Calgary, Alberta. It is one of Canada's largest
Energy and Utilities Board and Alberta Environment                              producers of crude oil and natural gas. It is a
in July 2005. The company responded to the                                      leading developer of Canada's vast oil sands
regulators' information requests in March 2006 and                              resources through its 25 percent ownership of the
expects to hold public hearings in the second half of                           Syncrude project and its operations at Cold Lake,
2006.                                                                           Alberta. Imperial is the only original owner of
                                                                                Syncrude still involved in the project and, as a
                                Athabasca River
                                                                                result, has a long history of contributing to the Fort
                                                                                McMurray community and Wood Buffalo Region.
                                                                                Imperial is also the leader of a Canadian group
                                                             Imperial Oil       advancing the development of natural-gas
        Fort McKay                                                   6          resources in the Mackenzie Delta region of
                                                             88A




                            Petro-          Shell
          CNRL
                            Canada                                   87         Canada's Far North. The company also operates 18
                                                             36
                            Syncrude            31A                             pipelines and has ownership interests in several
         Deer Creek             Shell                                           others.
                                                  Syncrude




                                                                   ExxonMobil

                                                                                Products and Chemicals Division
                                                                                The Products and Chemicals Division manages the
                 Syncrude            Syncrude
                                                                                company's petroleum products and chemicals
                                         Suncor
                                                                                businesses, under the Esso and Mobil brands. The
                            Suncor                                              products group operates four refineries, and an
                                                                                extensive network of retail and wholesale outlets. It
                                                                                is one of the largest suppliers of refined products in
                                                                                Canada. Of the company's four refineries, three
                                                                                have some capability to process bitumen and are
                                                                                pipeline-connected to the proposed Kearl
                                Fort McMurray
                                                                                development region.
                                                                                The chemicals group operates four manufacturing
WHO ARE WE?                                                                     plants and a number of strategically located
Imperial Oil Limited                                                            distribution centres across the country. It's one of
Imperial Oil Limited is Canada's largest integrated                             the largest chemical companies in Canada.
(production, refining and product delivery)                                     Chemical products include primary petrochemicals,
petroleum company. It's a leading producer of crude                             plastic resins, solvents and additives for lubricating
                                                                                oils.
oil and natural gas and a major company by
international standards. The company's focus is on

2
                            ExxonMobil Canada
                            ExxonMobil Canada (formerly Mobil Oil Canada) is a wholly owned subsidiary of Exxon Mobil Corporation
                            and a major petroleum producer in Canada. The company holds a leadership position in key petroleum
                            exploration and production areas, with large working interests in the Hibernia, Terra Nova and Sable
                            offshore energy projects off Canada's East Coast.
                            The company has about 1,100 employees who support its operations across Canada. In western Canada,
                            ExxonMobil operates nine oil and gas facilities and has ownership interests in 13 other facilities. It's also
                            part of the Imperial-led, Canadian group advancing the development of Mackenzie Delta natural-gas
                            resources in Canada's Far North.
                            ExxonMobil's western Canadian holdings include interests in more than three million acres of exploration
                            lands. This includes portions of Leases 36, 31A and 88 in the Athabasca region.

                            PROJECT DETAILS
                            Estimated Production
                            The proposed development will be an open-pit mining operation. Expected eventual production, based on
                            a phased development scenario, could average about 300,000 barrels of bitumen a day, with variations
                            above and below this volume. This will likely involve an initial mine development as early as 2010 with
                            design capacity of about 100,000 barrels-a-day, with two additional phases in 2012 and 2018. Maximum
                            production could be up to 345,000 barrels-a-day.

                            Estimated Resources
                            Based on evaluation drilling carried out to date, total recoverable bitumen before royalties is estimated to
                            be 4.6 billion barrels using current government guidelines.

                            Estimated Cost
                            The initial cost estimate for the mine development was estimated to fall in the $5-8 billion range in 2005
                            dollars. Work is being done to refine this preliminary cost estimate and fully understand the impact of high
                            industry activity on this estimate.

                            Estimated Schedule
                            Following is a preliminary schedule for the project.
                                             2003   2004     2005     2006         2007    2008     2009       2010      2011     2012
                     Task

Environmental Baseline Studies

Public Consultation and Info. Sharing

Release Project Update and Draft EIA Terms

EIA Terms of Reference Finalized

Environmental Impact Assessment

Prepare/File Regulatory Application

Regulatory Process/Approvals

Engineering, Procurement and Construction

First Oil

Construction of Second Train

Second Train Start-up

Third Train (2018)




                            3
Preliminary Development Concept

                            Shovel        Trucks               Crusher          Conveyor    Slurry Plant   Oil Sands Slurry
                                                                                                  Water




                                                        Mining
                                                                                                                      Hydrotransport/
                                                                                                                      Conditioning
                                             Froth Treatment      Diluent           Extraction


                                                                   Froth


                                                                                            Sand/Water


        To Market                                                                                          Recycle Water


                                                                                     Tailings


PROPOSED FACILITIES AND OPERATION
Oil-Sands Mine
The mine's design concept is similar to existing oil-sands mines in the Fort McMurray region. Plans are to
use state-of-the-art, large scale shovels, trucks, crushers and an oil-sands hydrotransport system.
The base mine will be developed in a staged approach. The initial mine development (the first train) will
involve clearing and draining the surface area, removing the muskeg overburden before mining the oil
sands can begin, and stockpiling the muskeg for use in future reclamation. The current planning basis
includes an initial mine train with production capacity of about 100,000 barrels-a-day. A second train will
follow. These developments would take place on Leases 6 and 87.
Bitumen Extraction
The mined ore will be crushed, mixed with water for slurrying, transported and conditioned in a pipeline,
and fed to a bitumen-extraction facility. The bitumen will be separated as froth – a mixture of bitumen,
water and solids. The froth will be further treated in a froth treatment plant to produce bitumen for sale.
Bitumen Upgrading
Current plans do not include any on-site upgrading
facilities for the first phase of development. To
reduce the bitumen's viscocity such that it can be
shipped by pipeline, a number of blending options
are being considered. The product will be
transported to market through a pipeline system.
Imperial and ExxonMobil own extensive refinery
infrastructure in Canada and the U.S. that could
receive bitumen or upgraded feedstock to make a
variety of refined products. Production may also be
sold to third parties. Any future Kearl upgrading
capacity or related pipelines to support future
mine phases would be the subject of a
separate application.
                                                                         Proposed Mining Sequence

4
                                          R11                               R10                 R9                                                     R8                                      R7                                  R6 W4
Tailings Management
Tailings (a mixture of fine clay,                                                 Proposed
                                                                                  River Water
                                                                                  Intake
                                                                                                                                                                                                                                           T99




sand and water) are a by-product                                                                                                                  Winter Road
                                                                                                                                   Pr
                                                                                                                                        op
of the bitumen-extraction process.                                                                                             Pr
                                                                                                                                    op
                                                                                                                                         os
                                                                                                                                             os

                                                                                                                                              ed
                                                                                                                                                  ed
                                                                                                                                                    Ra
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                                                                                                                                                   Po W a
The application includes an                                                                                                                          w e te r
                                                                                                                                                         rlin Pip




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                                                                                                                                                             e    e   lin




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                                                                                                              McClellend Lake                                               e                   Fir e




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                                                                                                                                                                                                        bag R ive r

external tailings area in the




                                                              ba
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                                                         At



northeast portion of Lease 6.                                                                                                                                                                 External
                                                                                                                                                                                              Tailings Area
                                                                                                                                                                                                                       Potential
                                                                                                                                                                                                                       Water
                                                                                                                                                                                                                       Storage             T97

Conventional tailings-treatment                                                                                                                                                           Plant Site

                                                                                                                                                                                                                       Administration

technology is planned for use until               Bitumount
                                                                                                                                                                                Maintenance

                                                                                                                                                                                  North
                                                                                                                                                                                       Shop
                                                                                                                                                                                                                       and Operations
                                                                                                                                                                                                                       Camp

                                                                                                                                                                                  Pit

tailings can be stored in a                                                                                                                                                                                    East




                                                                                                               r
                                                                                                            ve
                                                                                                                                                                                                               Pit
                                                                                                                                        Proposed




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                                                                                                         eg
                                                                                                                                        Powerline                                                                                          T96




                                                                                                     sk
depleted mine pit, at which time
                                                                                                     u
                                                                                                 M
                                                                                                                                                                                      South
                                                                                                                                        West                                          Pit
                                                                                                                                        Pit

consolidated tailings technology                                                                                                                   Kearl
                                                                                                                                                   Lake
                                                                                                                                                                                                           Proposed
                                                                                                                                                                                                           Project




                                                                                                                    ad
                                                                                                                                                                                                           Roads

will be implemented. This will




                                                                                                                   Ro
                                                                                                                                                           Proposed




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                                                                                                                                                           Compensation          Proposed




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                                                                                                                                                           Lake




                                                                                                     Ca
                                                                                                                                                                                 Industry                   Hot                            T95

allow Imperial to minimize surface                                                                                                                                               Airstrip
                                                                                                                                                                                      Natural
                                                                                                                                                                                         Gas
                                                                                                                                                                                                            Bitumen
                                                                                                                                                                                                            Product
                                                                                                                                                                                                            Pipeline

disturbance, reduce the ultimate                                                                                               Steepbank Gas Pipeline
                                                                                                                                                                                     Pipeline




                                                                                                          Kin
fine tailings volume and                     Fort




                                                                                                              de
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                                                                                                                rM
                                                                                                                   or
                                                                                                                     ga
accelerate the reclamation of




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the external tailings area.




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Infrastructure
The project includes development of related infrastructure, including a water intake and water pipeline (to
allow water to be withdrawn from the Athabasca River), water storage, an operations camp, and roads.
Given the project's remote location and estimated commuting time of at least 90 minutes each way,
Imperial is planning to have a camp-based operation with a workforce on a rotating schedule. This will
allow Imperial Oil to have a safe, healthy, productive and efficient work environment with minimal impact
on the Fort McMurray infrastructure. Imperial is planning to fly operators to the site, likely from Edmonton.
For this reason Imperial is currently working with other operators on a joint industry airstrip just south of
the Kearl leases.
Fresh Water Source
The current design basis for the project has the Athabasca River as the water source for this development
and includes 30 days of on-site contingency water storage which would allow Imperial to reduce
withdrawals during low-flow periods that occur in the winter.
Streams, small water bodies and the upper reaches of the Muskeg River will be diverted from time to time
during the mine operations. These diversions will affect fish and fish habitat in the area. The lost fish
habitat will be more than offset with created fish habitat by extending the northern part of Kearl Lake. The
extension will have a water depth greater than Kearl Lake providing better over-wintering habitat and
improving the fish resource in the lake.
Energy Efficiency
Energy efficiency is a key component of Imperial's design basis and, as such, our application includes the
low energy extraction process and electrical cogeneration. Advanced energy management processes will
also be applied to continuously improve the energy efficiency of the operation.



5
ENVIRONMENTAL MANAGEMENT                                                                                                       R8                                      R7                        R6 W4

                                                                                                                                                                                                 Potential
                                                                                                                    2041
Company Commitment                                                                                                                                                                               Water
                                                                                                                                                                                                 Storage

Imperial and ExxonMobil are committed to




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                                                                                                              R
                                                                                                                                           Lease




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environmental management as an integral part of




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                                                                                                                                            88A




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                                                                                                                                                       Lease 6
their business. This includes integrating
environmental considerations in business planning,




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facilities and product design, operating processes




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and training programs.                                                                              Lease
                                                                                                                          Proposed
                                                                                                                        Compensation
                                                                                                     88B                    Lake                                                                          T96

The companies' current operations incorporate
extensive environmental design and protection
                                                                                                                       Kearl
measures to mitigate effects on water, land and air                                                                    Lake
                                                                                                                               Lease
                                                                                                                                            Lease 36        Lease 87


quality. In addition, a variety of ongoing                                                                                      31A                                         2           0         2
                                                                                                                                                                                                          T95
                                                                                                                                                                                    Kilometres
consultation forums provide the public with                                                                                                                      IOR Map No.: 074-0050-365-121

opportunities to review and provide input to the                                                                               R8                                      R7                        R6 W4
companies' environmental performance and future
                                                                                                                    2051                                                                         Potential
developments.                                                                                                                                                                                    Water
                                                                                                                                                                                                 Storage




                                                                                                                  er
                                                                                                               iv
                                                                                                                                                                                                          T97
Reclamation



                                                                                                              R
                                                                                                          g
                                                                                                                                        Lease




                                                                                                         ke
                                                                                                     us
                                                                                                                                         88A




                                                                                                     M
Mining operations will change the landscape and                                                                                                        Lease 6


traditional land use will be affected. The mining



                                                                                                                                    W
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operations only use a portion of the project lands at



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any time and much of the lands will not be affected                                                                       Proposed
for 20-25 years. When project lands are used later                                                  Lease
                                                                                                     88B
                                                                                                                        Compensation
                                                                                                                            Lake                                                                          T96

in the life of the project, the lands used earlier will
be reclaimed. The intent is to engage stakeholders                                                                  Kearl

in reclamation planning so that, to the extent                                                                      Lake

                                                                                                                               Lease
                                                                                                                                            Lease 36        Lease 87

                                                                                                                                                                                2           0         2
practical, lands reclaimed will have traditional land                                                                           31A
                                                                                                                                                                                     Kilometres           T95

use capability and available access. Progressive                                                                                                                  IOR Map No.: 074-0050-365-122

reclamation will continue throughout the life of the                                                                           R8                                      R7                        R6 W4

project. The graphics show the planned status of                                                                   Closure
the site at four different time periods throughout
the operational life of the mine.
                                                                                                                   er
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                                                                                                                                           Lease
                                                                                                          ke
                                                                                                         us




                                                                                                                                            88A
                                                                                                     M




                                                                                                                                                       Lease 6
                          R8                                    R7                    R6 W4


                  2021
                                                                                                                                    W




                                                                                      Potential
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                                  Lease
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                                                                                                    Lease                  Proposed
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                                   88A           Lease
    M




                                                                                                     88B                 Compensation
                                                   6                                                                         Lake                                                                         T96
                                  W
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                                                                                                                       Kearl
                                           ee




                                                                                                                       Lake                 Lease 36        Lease 87
                                            k




                                                                                                                               Lease
                        Proposed                                                                                                31A                                             2           0         2
Lease                 Compensation
 88B                                                                                                                                                                                                      T95
                          Lake                                                                T96                                                                                     Kilometres
                                                                                                                                                                  IOR Map No.: 074-0050-365-110


                                                                                                    Legend
                  Kearl
                  Lake                Lease 36       Lease 87                                                 Reclaimed Areas
                          Lease                                                                               Proposed Water Management Areas
                           31A                                       2       0        2
                                                                                              T95             Surface Water Diversions
                                                                         Kilometres
                                                                                                              Active or Non-Reclaimed Mine Areas
                                                           IOR Map No.: 074-0050-365-120
                                                                                                              Kearl Leases

6
SOCIOECONOMIC BENEFITS
Imperial will continue to utilize and build upon
socio-economic information gathered from other
operators and industry associations, such as the
Athabasca Regional Issues Working Group (RIWG),
along with input from our own public consultation
process to assess the socio-economic impacts and
benefits of this project. We expect benefits to
include:
• Investment of an estimated $5 to 8 billion
  (2005 $CDN) to develop the Kearl Oil Sands
  Project, which will be largely spent in the
  province of Alberta and across Canada.
• The peak construction work-force is expected to
  be 1,700 people.
• The Project is committed to supporting local and
  regional business development by preferring to
  use, on a competitive basis, qualified local and
  regional materials and services suppliers with
  high safety and environmental performance
  standards. We intend to use the Regional
  Economic Development Link (RED Link) to
  facilitate communication with the local business
  community for local contracting opportunities.
• Approximately 1,100 to1,300 permanent jobs,
  when all three mine trains are in operation.
  Imperial will adopt a camp-based operation with
  a workforce on a rotating schedule.
• Provincial and federal revenues from corporate
  taxes and royalties are expected to be $24 billion
  (2005 $CDN) over the life of the project.
• A preliminary estimate of property taxes to the
  Regional Municipality of Wood Buffalo is $14.5
  million per year during peak operations.
• Personal income taxes and induced revenue
  benefits will provide additional benefits to the
  provincial and federal government.




7
WE’VE MOVED
All proposed development activities have now been
moved to Imperial's offices in downtown
Calgary, Alberta. The company address is:
Imperial Oil Resources
237 Fourth Avenue S.W.
P.O. Box 2480, Station ‘M’
Calgary, Alberta, Canada T2P 3M9

Inquiries related to the proposed project are
welcome, and should be directed to:

Mark Little                                         Roy Steinhauer
Kearl Oil-Sands Development Manager                 Aboriginal Affairs Manager
Tel. 403-237-3202                                   Tel. 403-237-3710
mark.s.little@esso.ca                               roy.g.steinhauer@esso.ca

Stuart Nadeau                                       Kim Fox
Environmental and Regulatory Manager                Public Affairs Advisor
Tel. 403-237-3966                                   Tel. 403-237-3889
stuart.nadeau@esso.ca                               kim.j.fox@esso.ca

Peter Clarke                                        Inquiries related to procurement, contracting and
Procurement Manager                                 services should be directed to:
Tel. 403-237-2644                                   Kearl Project Information Line
peter.clarke@esso.ca                                Tel. 1-888-666-7617




8
Kearl
9

				
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