Statoil Becomes Latest Oil-Sand Producer to Delay ProjectJeremy van Loon
Norway’s Statoil ASA has postponed work on its Corner field project in the Canadian oil sands as mounting costs reduce the potential for profit.
Statoil plans to delay the project in northern Alberta by at least three years and expects to cut 70 jobs, the company said today on its website. The decision doesn’t affect the company’s Leismer operations with capacity of 20,000 barrels a day.
“The decision is in line with Statoil’s strategy to prioritize capital to the most competitive projects in its comprehensive global portfolio and is consistent with our stepwise approach to the oil sands,” Statoil Canada President Staale Tungesvik said in the statement.
The Stavanger, Norway-based company is the most recent to postpone an oil-sands project amid rising costs. Total SA in May said it would cut 150 jobs at its Joslyn project and delay a final investment decision as costs escalate.
Oil-sands producers have struggled with rising costs in the remote projects in northern Alberta because of labor shortages and difficulties in getting equipment. Imperial Oil Ltd., the Calgary-based producer majority owned by Exxon Mobil Corp., last year boosted the cost of its Kearl project by 18 percent.
Pembina Pipeline Corp., a Calgary-based oil conduits operator supplying lines for the Statoil project, said its contract with the Norwegian company concerning the delayed operation expires at the end of the month. The engineering may be used for “other commercial discussions,” Pembina said in a statement today.