Royal Dutch Shell PLC said it will not continue construction of the 80,000-b/d Carmon Creek thermal in situ project in Alberta.
Shell expects to take $2 billion in charges in the third quarter as a result of the decision. Estimated proved reserves of 418 million bbl of bitumen at yearend 2014 will be debooked.
“After careful review of the potential design options, updated costs, and the company’s capital priorities, Shell’s view is that the project does not rank in its portfolio at this time,” the company said.
The decision “reflects current uncertainties, including the lack of infrastructure to move Canadian crude oil to global commodity markets.”
Shell will retain the Carmon Creek leases and preserve some equipment while continuing to study options for the 100% Shell-owned project. The company sanctioned the project in 2013 (OGJ Online, Oct. 31, 2013).