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John Abbott, TD Newcrest – Canadian Unconventional Oil Forum, 8 July 2009
Mr. Abbott started with a short summary of Shell’s strategy and upstream portfolio, and the global energy landscape, where other sources of hydrocarbons, such as oil sands, will have a role.
Shell is rejuvenating its upstream portfolio with 1 million barrels of upstream production and about 4 million tonnes per annum of LNG capacity under construction.
He then moved to present Shell’s Oil Sands business, where Shell is an industry leader and has been active in Alberta for many years going back to the 1950’s when the prime acreage in the Athabasca and Peace River Oil Sands Regions were acquired.
Mr. Abbott highlighted the Athabasca Oil Sands Project (AOSP), where Shell has a production capacity of 90 thousand barrels per day (boe/d) and the AOSP Expansion I, where an additional capacity of 60 thousand boe/d is under construction. He also pointed to the fact that Shell is also pursuing options to grow its In Situ production through the use of advanced technology.
He commented that Shell has decided to delay an investment decision on the next AOSP expansion due to cost pressures in the over-heated oil sands market. In the meantime Shell is pursuing less capital intensive debottleneck opportunities at AOSP.
Mr. Abbott provided an overview of Shell’s sustainable operations in its Oil Sands businesses and CO2 options, where he highlighted that the province of Alberta announced that it has selected Shell’s Quest project for a Letter of Intent and possible funding agreement from their $2 billion CCS funding for emission reduction.
On his conclusion he commented on the difficult current financial environment, especially within the Oil Sands sector, but that Shell is managing that with good operating performance and flexibility on its balance sheet. And for the future, Shell has made good progress with new investment options in gas, heavy oil and cleaner fuels.