Chevron: Athabasca Oil Sands Expansion to Start Up in 2011

Athabasca Oil Sands
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HOUSTON (Dow Jones Newswires), May 8, 2009

A 100,000-barrel-a-day expansion at Royal Dutch Shell PLC's (RDSA) Athabasca Oil Sands Project is expected to be completed and start up in 2011, slightly behind schedule, a top executive of partner Chevron Corp. (CVX) said Thursday.

"It's going to start more likely next year, which is little behind the original schedule," Gary Luquette, Chevron's president North America Exploration and Production, told Dow Jones Newswires in an interview.

Luquette said there isn't yet a specific timeline for the second-phase expansion of the project, which Shell delayed last October on rising costs. Luquette also said that most of the costs associated with the phase-one expansion, which climbed to $13.7 billion, are fixed and that the company is seeing very little cost reductions.

"The high costs we reported are likely to stay because we haven't seen much relief," Luquette said. "We are hopeful that subsequent stages will enjoy a much improved cost structure."

The Athabasca development currently produces 155,000 barrels a day of thick, tarry bitumen from the oil sands mine, which is subsequently processed into a higher-grade synthetic fuel at the project's upgrader. Shell is the project leader with a 60% stake, while Chevron and Marathon Oil Corp. (MRO) own 20% apiece.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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