Citing Lack of Pipeline Infrastructure, Shell Pulling Out of Northern Alberta Oil Sands Project
Royal Dutch Shell Plc said this week that it is retreating from its development of the Carmon Creek thermal oil sands project in northern Alberta and will take an expected $2 billion restructuring charge as a result.
The company cited falling oil prices and a lack of pipeline capacity in Canada as the reason for its decision.
“We are making changes to Shell’s portfolio mix by reviewing our longer-term upstream options world-wide, and managing affordability and exposure in the current world of lower oil prices. This is forcing tough choices at Shell,” the company’s CEO Ben van Beurden said in a release.
The announcement reverses a Shell decision from March, when the company said it would alter the pace at which it was developing Carmon Creek, an 80,000 barrel-per-day project.
At the time, Shell said it was re-phasing the oilsands project in response to low oil prices, to take advantage of a decline in costs and to schedule its start up date with a potential oil price recovery.