Total Suspends Work On Alberta Joslyn Oil Sands Mine, Cites Cost
CALGARY, Alberta, May 29 (Reuters) - Total SA is suspending design and engineering work on its C$11 billion ($10.15 billion) Joslyn oil sands mine in northern Alberta and laying off up to 150 Canadian staff by the end of the year as it looks to reduce costs at the project.
Andre Goffart, chief executive of the French oil major's Canadian unit, said on a conference call Thursday that the company has been working to reduce costs but not enough progress had been made to reach a final investment decision on the 100,000 barrel per day project.
Joslyn has been a troubled project since Total acquired it as part of its C$1.7 billion purchase of Deer Creek Energy Ltd in 2005, going through protracted regulatory hearings and then being put on the back burner when the company entered a joint venture with Suncor Energy Inc to develop the Fort Hills oil sands mine.
"We have worked since 2011 ... with a view to reduce the costs of the project to prepare for sanction," Goffart said. "Unfortunately (there are) not yet sufficient economics to support a final investment decision."
Goffart said all the project's partners supported Total's decision. Total will continue work on project engineering to lower the cost of the mine, which had been expected to begin operating in 2017.
The company retains significant oil sands investment, including its Suncor mining joint venture and the Surmont thermal project it shares with ConocoPhillips.
Total has a 38.25 percent stake in the Joslyn project while Suncor owns 36.75 percent. Occidental Petroleum Corp holds 15 percent and Japan's Inpex Corp has a 10 percent interest.
($1 = 1.0839 Canadian Dollars)
(Reporting by Scott Haggett; Editing by Grant McCool)
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