Wednesday 28 October 2015

Shell halts oil sands project in Canada

Royal Dutch Shell has announced it will not continue with the construction of an oil sands project in Canada.

The company stated the decision comes due to “uncertainties”,  including the lack of infrastructure to move Canadian crude oil to global commodity markets.

The firm will retain the Carmon Creek leases and preserve some equipment while continuing to study the options for the asset, it added.

The Carmon Creek project was expected to produce 80,000 barrels of oil per day.

Shell, which owns 100% of the project, expects the decision to cost $2 billion (£1.3bn) due to impairment, contract provision, redundancy and restructuring charges.

Chief Executive Officer Ben van Beurden said: “We are making changes to Shell’s portfolio mix by reviewing our longer term upstream options worldwide and managing affordability and exposure in the current world of lower oil prices. This is forcing tough choices at Shell."