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TrueNorth defers Fort Hills oil sands project development

By OGJ editors

HOUSTON, Jan. 14 -- TrueNorth Energy Corp., Calgary, has deferred development of its Fort Hills oil sands project 90 km north of Fort McMurray, Alta., citing escalating costs in general and market uncertainty.

"When conditions improve, we will re-evaluate today's decision," said Dave Robertson, TrueNorth chairman. The company intends to preserve the assets' value and its options to proceed.

"However, the escalating costs experienced by established developers, challenging capital markets, and general uncertainty about the potential impacts of Kyoto's implementation have all contributed to our board's decision," Robertson said, referring to the Kyoto Treaty on Climate Change.

Last year, TrueNorth received all necessary permits and approvals for the development. Previously, production was expected to reach 95,000 b/d of bitumen in 2005 and 190,000 b/d in 2008 (OGJ Online, June 25, 2001).

UTS Energy Corp. holds 22% interest in Fort Hills. TrueNorth Energy LP, an affiliate of Koch Petroleum Canada LP, was operator of the proposed project with 78% interest.

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