StatoilHydro delays oil sands project
29/05/08 OSLO (Reuters) – Norway’s StatoilHydro has postponed building a planned full-scale refinery for its Canadian oil sands venture by two years to 2016, citing a tight supplier market, cost pressure and new rules in Alberta.
Last year StatoilHydro bought 257,000 acres of oil sands leases in the Athabasca region for about $2 billion as part of long-term efforts to diversify away from ageing North Sea oilfields.The project envisaged a pilot project, due to produce about 10,000 barrels of bitumen — a synthetic crude produced from oil sands — per day by 2010, as well as plans for an upgrader facility to boost capacity to 200,000 barrels by 2020.
“We need a bit more time to evaluate the upgrader facility,” StatoilHydro’s chief spokesman Ola Morten Aanestad told Reuters on Thursday.
“The reason we have not proceeded fully with the upgrader is because of a tight supply market and cost pressure in the supply industry. Also, there have been new laws and conditions which made us want to evaluate this a bit more,” he said.
Aanestad said StatoilHydro’s oil sands pilot project was “proceeding as planned” and that the delay would not affect the company’s guidance on oil production.
Some Norwegian politicians have criticized StatoilHydro, 62.5 percent owned by the government, for the environmental impact of its oil sand project, which is more energy-intensive than its conventional offshore oil and gas wells.
When StatoilHydro bought the oil sands ventures last year, it said that the full-scale upgrader unit would cost some $12-15 billion — a figure which analysts said may be on the low side given soaring labor and equipment costs in Alberta.
The industry has been plagued by delays in recent years due to the oil services industry struggling to keep up with growing demand for new rigs, oilfield equipment and facilities. “We hope that by spending more time on this, we will be able to find a more robust solution,” Aanestad said when asked about costs related to the postponement.
Shares in StatoilHydro rose 2 percent to 197.90 crowns by 3:29 a.m. EDT, outpacing a 1 percent rise in the DJ Stoxx oil and gas index <.SXEP>.
(Reporting by Aasa Christine Stoltz and Wojciech Moskwa; Editing by Louise Ireland)
