Financial Post (Canada): Shell oilsands operation hits new snags: “Shell Canada, which is 78% owned by oil major Royal Dutch/Shell Group, has a 60% stake in the Athabasca project.” (ShellNews.net) 22 Dec 04

Dec 22, 2004

CALGARY - Shell Canada Ltd.'s oilsands operation will run at reduced rates for another month after more operational problems hit a key processing unit that has been shut down since October, the company said yesterday.

Shell Canada, the country's second-largest oil producer and refiner, said its Athabasca Oil Sands project will pump at about 65% of its 155,000 barrel a day capacity until the end of January as a result. Last week, the company said one of two production trains at its Scotford upgrader near Edmonton would be shut down until the end of December after other equipment failed.

But Shell said yesterday it was ramping the unit back up when crews detected a tubing leak in a cooler. After further inspections the company determined five cooling units needed extensive repairs, it said.

The upgrading unit at the US$5.7-billion Athabasca development turns tar-like bitumen produced at the Muskeg River mine near Fort McMurray, Alta., into refinery-ready light oil. The production train has been shut down for repairs since Oct. 19.

Shell Canada, which is 78% owned by oil major Royal Dutch/Shell Group, has a 60% stake in the Athabasca project. Its partners are ChevronTexaco Corp. and Western Oil Sands. It is not the only Canadian oil sands operation to be running at reduced rates this month. Last week, the biggest such venture, Syncrude Canada Ltd., said its production will be cut by 25,000 barrels a day, or 10% of capacity, for three weeks as workers slowly bring a processing unit back up following a power outage.