Statoil Suspends Work on Tar Sands/Oil Sands Project in Northern Alberta
Falling oil prices and rising costs have prompted Stavanger, Norway-based Statoil ASA to suspend work on its 40,000-barrel/day tar sands/oil sands project in northern Alberta. “Costs for labour and materials have continued to rise in recent years and are working against the economics of new projects,” said the company’s country manager for Canada, Staale Tungesvik. “Market access issues also play a role, including limited pipeline access which weighs on prices for Alberta oil, squeezing margins and making it difficult for sustainable financial returns.” The project relied on a thermal injection process that is less expensive than standard bitumen mining. But with the benchmark West Texas Intermediate oil price “sliding to just above $90 per barrel earlier this month,” Reuters reports, “the outright price of Canadian crude is nearing the breakeven cost for some oil sands projects.” According to Politico Morning Energy, “Sierra Club Executive Director Michael Brune tweeted, ‘#winning Oil giant shelves #tarsands project due 2 rising costs, limited pipeline space. This is why #KXL is so impt.’ Bill McKibben, founder of 350.org, piling on, tweeted: ‘Heh heh heh,’ estimating that the now-shelved Corner project represents the equivalent of 164 million cars on the road over its lifespan.” Earlier this year, Total E&P Canada shelved its Joslyn tar sands/oil sands project northwest of Fort McMurray.