Canada oil sands developers not put off by Mobil delay

BNA Staff

Companies with large oil sands projects in Alberta said in early April that they will not follow Mobil Corp.’s lead and delay their multibillion-dollar investments. Shell Canada Ltd., which is planning a C$3.4-billion oil sands development near Fort McMurray, Alberta, and Syncrude Canada Ltd., with its C$6-billion “Syncrude 21” expansion plan, cite higher oil prices as the reason for their optimism.

Koch Oil Co. Ltd. said it and partner UTS Energy Corp. were still in the early stages of planning their 90,000-barrel-a-day Fort Hills oil sands project, but the future of the development was looking positive. The companies will decide whether to go ahead with the C$1 billion development in 2002.

Suncor Energy Inc.’s has also been undeterred by Mobil’s’ decision and in early April began construction on a C$2-billion expansion of its oil sands operation.

In late March Mobil announced it was delaying its scheduled C$2.5 billion development for the Kearl oil sands mining, bitumen extraction and upgrading operation by at least two years because of low oil prices. Production was originally expected to start in 2003.

Mobil decided to defer the project’s regulatory filing, scheduled for this spring, despite the recent resurgence in oil prices. The company said that it is taking a longer-term view of oil prices.