Imperial Oil, the Canadian subsidiary of US oil giant ExxonMobil, said Monday it is going ahead with a 7.1-billion-US-dollar first phase of its Alberta oil sands mining project.

The company's Kearl oil sands project -- a surface mining operation northeast of Fort McMurray, Alberta -- is to be developed in three phases and could ultimately produce more than 300,000 barrels of bitumen per day.

The first phase of the project would produce an average of 110,000 barrels per day starting in late 2012, Imperial Oil said in a statement.

It was initially due to come online in 2010 or 2011, but the company delayed its launch, citing a sudden drop in crude oil prices.

Canadian authorities had also revoked and then reinstated permits to Imperial Oil to develop the project, criticized by environmentalists a massive potential source of greenhouse gas emissions linked to global warming.

The Kearl mine is estimated to hold 4.6 billion barrels of bitumen.

At an estimated 175 billion barrels, Alberta's oil sands are the second largest oil reserve in the world behind Saudi Arabia, but they were neglected for years, except by local companies, because of high extraction costs.

Since 2000, skyrocketing crude oil prices and improved extraction methods have made exploitation more economical, and have lured several multinational oil companies to mine the sands.