Formosa Plastics Group (台塑集團), in response to soaring crude prices, is considering reviving its plan to mine oil sand in Canada, a newspaper said yesterday.
The Chinese-language Apple Daily reported that the Formosa Petrochemical Corp (FPCC,台塑), part of the Formosa Plastics Group, plans to send an inspection delegation to Alberta.
FPCC said the cost of extracting oil from oil sand is 3.5 times more than the cost of refining crude oil. But as the international oil price remains above US$100 per barrel, it is still profitable.
The per barrel oil price on the international market hit US$130 this week.
Alberta Province has 175 billion barrels of proved oil sand, next only to the 260 billion barrels’ reserves in Saudi Arabia.
Although Alberta is rich in oil it must be processed before it can be used. The oil sand must be heated to a certain temperature to separate the sand from the oil.
However, FPCC is cautious in its investment plan because of the unpredictability of oil prices, the Apple Daily quoted an unnamed FPCC official as saying.
“This time last year the world crude price was US$50 to US$60 per barrel, but now it is US$130. So it is risky to pour too much money into our investment. The key to whether we will revive our mining plan or not is if we can extract 60 percent of oil from the oil sand,” the official said.