Fort Hills Energy defers oil sands project decision
Officials of Fort Hills Energy said they will defer until 2009 a final investment decision on a bitumen upgrader at an integrated oil sands project near Fort McMurray, Alta.
By OGJ editors
HOUSTON, Nov. 18 -- Officials of Fort Hills Energy LP said they will defer until 2009 a final investment decision on a bitumen upgrader and will focus instead on developing the mine and bitumen production facilities of that integrated oil sands project near Fort McMurray, Alta.
A decision will be made later whether to proceed with an upgrader to be located 300 miles south in Sturgeon County east of Edmonton.
"We're giving ourselves some breathing room on the project schedule, so we can take advantage of a softening market to reduce costs," said Ron A. Brenneman, president and chief executive officer of Petro-Canada. "Given cost pressures, lower crude oil prices, and uncertainty in the financial markets, it's important to scale our efforts to focus on the mine first."
The partnership will use the extra time to evaluate cost reductions, efficiencies, and the overall project schedule. It remains committed to retaining the oil sands leases and is in discussions with the Alberta government on lease terms.
The partnership consists of Petro-Canada with 60% working interest, UTS Energy Corp. 20%, and Teck Cominco Ltd. 20%. Petro-Canada Oil Sands Inc., a unit of Petro-Canada, is operator.