CORRECTED-Total says oil sands rethink doesn't signal long-term doubt

Thu Mar 28, 2013 7:03pm EDT
 
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(Corrects size of Surmont oil sands project in 17th paragraph to 136,000 bpd from 100,000 bpd and in paragraph 18 corrects capacity of Port Arthur refinery to 174,000 bpd from 225,500 bpd)

* Total and Suncor re-evaluating Fort Hills, Joslyn projects

* Total Canada CEO says decisions to be made in second half

* Joint venture still active after Voyageur cancellation

By Jeffrey Jones

CALGARY, Alberta, March 28 (Reuters) - This week's decision by Total SA's and Suncor Energy Inc to abandon a multibillion-dollar project to upgrade bitumen produced in the Canadian oil sands before shipping it abroad won't be the last rethinking of a capital-hungry oil sands project in a harsher economic climate.

But the chief executive of Total's Canadian unit said on Thursday he expects the problem of transport bottlenecks now plaguing the northern Alberta oil sands to be ironed out by the time his company starts up vast new mines in the region later this decade.

France's Total and Suncor, Canada's biggest oil producer, pulled the plug on the Voyageur upgrader on Wednesday because returns would not be high enough to justify the project, which would have transformed tar sands bitumen into lighter oil that can be more easily used by traditional refineries.

The companies have not said how much the upgrader would have cost, but analysts pegged the project at more than C$14 billion ($13.8 billion).   Continued...