Imperial Oil sees no Syncrude expansion before 2020

Wed Nov 23, 2011 5:32pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Imperial Oil Ltd does not expect to expand production capacity at the Syncrude Canada oil sands project in northern Alberta at least until 2020, breaking from the expectations of the other partners in one of the oil sands' biggest operations.

Imperial is concentrating on improving reliability at the sprawling oil sands mining and synthetic crude processing development before moving forward with multibillion-dollar plans to boost output beyond the current capacity of 350,000 barrels a day, spokesman Pius Rolheiser said.

Imperial has a 25 percent stake in Syncrude, making it the second-largest interest holder. Imperial's parent company, Exxon Mobil Corp, has managed the project since 2007.

"It would be premature of me to talk about specific project plans or timing or sequencing. However, Imperial is of the view that expansion will likely not happen before the end of this decade," Rolheiser said.

The view differs from that of Canadian Oil Sands Ltd, the largest Syncrude owner with a 37 percent stake. In its current investor presentation, being shown to investors in Asia this week, it says it expects to increase capacity by 71 percent to 600,000 barrels a day by 2020.

Canadian Oil Sands says the expansion would start with a 50,000 barrel a day increase through "debottlenecking" equipment currently in use.

Imperial's position also goes against the flow of most oil sands developers, which have captured and held investor interest in the face of rising costs, volatile oil prices and environmental opposition with the promise of production gains at regular intervals.

Syncrude partners brought in Exxon Mobil four years ago to improve operations following a string of unplanned equipment outages that drove up per-barrel operating costs and chewed into production forecasts.   Continued...