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“A lot of people were wondering what they thought of their asset,” Birn said.

While not a wholly new project, the decision suggests some companies are starting to proceed with their mothballed projects as U.S. crude oil prices stay well above US$60 per barrel.

“Over the last 12 months, we have seen some investment trickling back in,” said Birn.

The project will add new well pads and pipelines to an existing facility by 2020 and is similar to debottlenecking and capital efficiency projects announced this year by Imperial Oil Ltd. and Osum Oil Sands Corp.

The per-barrel costs of the new project were 50 per cent lower than what Nexen was paying for expansion projects before the oil price collapse of 2014, Birn said. He also said the costs were slightly lower now because the new expansion isn’t a “full project,” complete with new steam facilities.

Oil companies have been on an aggressive cost-cutting drive since the collapse in an attempt to boost returns from their operations and make their projects more competitive in the low oil price era.

“That is definitely one of the lowest (per barrel costs) that we’ve seen sanctioned recently,” said Nathan Nemeth, research analyst at Wood Mackenzie. “The caveat is that, once they start construction can they stick to that?”

Nemeth said there have been a few other expansion projects announced recently, including by MEG Energy Corp. at its Christina Lake facility. Analysts are also watching whether Imperial Oil will announce a brand new oilsands project, Aspen phase 1, later this year.