Shell shelves 200,000-bpd Pierre River oil sands mining project

Mon Feb 23, 2015 1:10pm EST
 
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CALGARY, Alberta Feb 23 (Reuters) - Royal Dutch Shell Plc said it was shelving plans to build a new oil sands mine in northern Alberta, the largest such project to be deferred as producers struggle with low energy prices.

The company said on Monday that it was withdrawing its regulatory application for the 200,000-barrel-per-day Pierre River project. Instead, it will concentrate on boosting the profitability of its existing 255,000-bpd Athabasca oil sands project.

"The Pierre River Mine remains a very long-term opportunity for us, but it's not currently a priority," Lorraine Mitchelmore, president of Shell's Canadian unit, said in a statement. "Our current focus is on making our heavy oil business as economically and environmentally competitive as possible."

Mitchelmore said Shell would hold the leases on the mine and could reapply in the future.

Shell has regulatory approval to expand its Jackpine oil sands mine in northern Alberta by 100,000 bpd. Spokesman Cameron Yost said he could not speculate on when a final investment decision on that project would take place.

The company said that because planning for the Pierre River mine was still in early stages, few jobs will be cut because of the deferral.

Shell has a 60 percent stake in the Athabasca Oil Sands Project, while Chevron Corp and Marathon Oil Corp each hold a 20 percent interest.

Total SA and Statoil ASA have also recently postponed oil sands projects [ID: nL2N0RQ2CE] (Reporting by Scott Haggett and Nia Williams in Calgary; Editing by Lisa Von Ahn)