Two large Canadian companies increase spending

Two large Canadian companies have decided to increase spending commitments for 2001 by more than $1 billion (Can.) each. Shell Canada Ltd. and Petro-Canada will increase spending by $1.8 billion and $1.4 billion respectively.


Two large Canadian companies have decided to increase spending commitments for 2001 by more than $1 billion (Can.) each. Shell Canada Ltd. and Petro-Canada will increase spending by $1.8 billion and $1.4 billion respectively.

Shell Canada projects spending $4.2 billion over the next 5 years to increase oil and gas production, with strong emphasis on oilsands development in northern Alberta. It did not detail spending beyond 2001.

Shell will spend $1.13 billion in 2001 on its $4.1 billion Athabasca Oil Sands Project at Muskeg River in northeast Alberta, scheduled to come on stream in 2002. Shell has a 60% interest in the project, in which Chevron Corp. and Western Oil Sands LP also hold interests.

The company will also spend $180 million in 2001 on upgrades at its Scotford refinery, near Edmonton, which will be used to process bitumen from the oilsands project.

Shell will also earmark $350 million for exploration and related projects, including natural gas exploration off Canada�s East Coast. In addition, it plans to spend $180 million on its marketing, refining and distribution operations.

Petro-Canada expects to spend $990 million on upstream expenditures next year, up $5 million from this year's figure. About $380 million will be spent on exploration and production activities aimed at Western Canadian gas reserves. About $55 million will be spent on gas exploration in the Mackenzie Delta.

The company also intends to spend $330 million on Canadian oil sands development. It will commit $110 million to the ongoing Syncrude expansion and $220 million on construction of production facilities at MacKay River.

In addition, Petro-Canada intends to spend $200 million on offshore activities, including $110 million on Terra Nova project off Canada on the Grand Banks. Terra Nova should begin production midyear.

About $40 million is earmarked for Hibernia field, and $50 million will be spent on other projects off Canada's East Coast.

Also next year, Petro-Canada intends to spend $400 million in the downstream segment, up from 2000's $280 million figure, in part because of investment to comply with Canada's gasoline regulations. A retail site program will also be a big-ticket item.

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