Calgary-based Petro-Canada has raised its cost estimates for its massive Fort Hills oilsands project in northern Alberta, Canada, by a stunning 50%. The company reports that preliminary results from its Front-End Engineering and Design (FEED) work have caused a drastic reworking of numbers announced in June 2007. At that time, costs were pegged at C$14 billion. Now, development could be in excess of C$21 billion. Fort Hills is in integrated oilsands mine and bitumen extraction plant, located about 90 kilometers north of Fort McMurray. The project includes an upgrader in Sturgeon County, northeast of Edmonton. The Fort Hills block of oilsands leases contains more than 4 billion barrels of recoverable bitumen resource, according to the company. Ultimate peak production is forecast at some 280,000 barrels of synthetic crude a day. Petro-Canada owns 60% of Fort Hills Energy LP. Other owners are UTS Energy Corp., with 20%, and Teck Cominco Ltd., with 20%. Rising costs have been a perennial concern in the oilsands projects, due to soaring expenses for labor and materials. Stocks of the partners fell after the revised figures were announced, but they confirmed they remain committed to the project. --by Peggy Williams, Senior Exploration Editor, Oil and Gas Investor pwilliams@hartenergy.com