Imperial CEO doesn't think Arctic project is dead

Wed Mar 21, 2012 4:40pm EDT
 
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Imperial Oil (IMO.TO: Quote) does not believe depressed natural gas prices have closed the door on the C$16.2 billion ($16.3 billion) Mackenzie pipeline project in Canada's Far North, and the company still hopes for a financial deal with Ottawa to make it viable, its chief executive said on Wednesday.

Even so, a surge in costs and a major shift in North American gas markets during the seven years it took Imperial and its partners to win approval for the pipeline show the need for the federal government to reform its regulatory process, CEO Bruce March said.

Joe Oliver, Canada's natural resources minister, has made streamlining approvals a priority, aiming to support the industry's goal to boost energy exports. Legislative and regulatory changes could form part of the federal Conservative government's March 29 budget.

Environmentalists fear the moves, expected to include binding time limits for assessments, might limit the ability of project opponents to participate in public hearings.

Imperial, which is the Canadian affiliate of Exxon Mobil Corp (XOM.N: Quote), and the government resumed talks last year over a multibillion-dollar support package for Mackenzie. It would provide funding for roads, airstrips and other infrastructure in the sparsely populated and largely undeveloped Northwest Territories.

"We haven't been able to achieve that yet. We continue to be hopeful and work that, but (there is) nothing more specific to talk to you about than that right now," March told reporters following a company-sponsored investor meeting.

WEAK MARKETS BREED UNCERTAINTY

The pipeline, which would carry up to 1.2 billion cubic feet of gas to southern markets from the Mackenzie Delta on the Beaufort Sea coast, is several years behind schedule.   Continued...

 
Bruce March president and CEO of Imperial Oil waits for the company's annual general meeting to start in Calgary, Alberta, April 28, 2011. REUTERS/Todd Korol