By EDWARD WELSCH
CALGARY -- Royal Dutch Shell will expand its Athabasca oil
sands project by a third by the end of the decade, and Canada
will make up a larger share of Shell's energy production over
that period, CEO Peter Voser said Tuesday.
Voser told reporters in an interview in Calgary that the
Netherlands-based energy giant will expand the Athabasca Oil
Sands Project by 80,000 to 90,000 bpd by debottlenecking its
operations in three stages.
That would bring the project, in which Shell owns 60%, to at
least 335,000 bpd of production. Shell just finished a 100,000
bpd expansion of the project last year.
The Athabasca expansion, combined with a planned
80,000 bpd expansion of Shell's Peace River oil
sands project will push Canadian
production to a larger share of Shell's portfolio, Voser
Canada produced 12% of Shell's 1.2 million bpd of oil, bitumen
and natural gas liquids last year, and 10% of its 5.9 billion
cubic feet a day of natural gas, according to its annual
Shell is targeting a 25% increase in its global production
"We expect Canada to play a very important role in our
growth prospects," Voser said. "It will consume a sizeable
portion of the total group budget."
Between 10% and 15% of Shell's capital expenditures will go
to Canada over the next several years, Voser said.
That compares with 13.8% of Shell's capital expenditures
that went to exploration and production in Canada and Greenland
last year. Shell has earmarked $32 billion for capital
expenditures this year.
Voser said Shell would split spending on Canada oil and
natural gas production roughly equally over the long term, but
would shift slightly toward natural gas over the next five
years as it pushes its British Columbia liquefied natural gas,
or LNG, export terminal forward and develops the Groundbirch
shale gas project in the province.
He said that Canadian regulators are facing a deadline to
get Canadian LNG exports approved, as competing projects in
Australia and the Middle East come onstream over the next
"If Canada wants to compete with those projects when they
come into the Asia Pacific [region], there is a certain time
window," Voser said.
Shell is developing 43 million tons of LNG export capacity,
with 12 million tons in Canada through a proposed terminal in
Kitimat, B.C., in partnership with Japan's Mitsubishi, China
National Petroleum and Korea Gas.
Media outlets in Asia reported the cost of Shell's Kitimat
project as $12 billion, but Shell didn't release a cost
estimate. The project is expected to begin
shipping Canadian gas to Asia by the end of the decade.
Dow Jones Newswires