No plans to shelve Sunrise oil sands project: BP

CALGARY, Alberta (Reuters) - BP Plc (BP.L: Quote) and Husky Energy Inc (HSE.TO: Quote) still aim to go ahead with the C$10 billion ($8.1 billion) Sunrise oil sand project, with BP's chief executive saying on Tuesday a final decision on the plan is expected next year.

Tony Hayward, BP's chief executive, said the partners should proceed with the oil sands production and refining joint-venture, even as most other new projects in the high-cost region are deferred, delayed or canceled because of low oil prices.

"We're fully expecting that we will proceed with the Sunrise project," Hayward said, according to a transcript of his remarks on the company's quarterly conference call.

British oil major BP and Husky, Canada's No. 2 oil exploration and refining firm, are still hammering out design details for Sunrise.

"The project's currently in the pre-engineering stage. That will continue to be worked hard in 2009 to come up with the best project both in terms of its design and in terms of its contracting strategy," Hayward said. "I think hopefully we could look at a decision in 2010."

BP and Husky each have a 50 percent stake in the 9 billion barrel Sunrise project.

The first 60,000 barrel a day phase has been targeted for start-up in 2012. The companies have also agreed to spend about $2.5 billion converting a Toledo, Ohio, refinery so it can run the oil-sands derived crude.

The fate of the Sunrise project was thrown into question this month when Husky's vice-president of oil sands resigned with a sanction decision looming.

Industry-wide, more than C$90 billion worth of oil sands projects have been put on hold or canceled in the past five months as oil prices tumbled and credit markets tightened.