Partial Production Restored at the Muskeg River Mine

Shell Canada says that bitumen production at the Muskeg River Mine oil sands facility has been partially restored and repairs needed to re-establish full production have been initiated.

Early on February 24, 2006, a major tear was discovered in the conveyor belt that transports ore from the crushers in the mine to the bitumen extraction plant. Since that time, the mine has been able to use the undamaged portion of the belt to partially restore production. Both the mine and Scotford Upgrader are currently in single-train operation and are producing at approximately one third of design rate.

There is a spare conveyor belt on-site at the mine and pre-installation work to replace the belt has begun. A full shutdown of the mine in late March to install the new belt is expected to take up to two weeks. Options to maintain upgrader production at minimum rates during this period are being evaluated. A review is underway to determine the root cause of the belt failure and identify key learnings.

While Shell's Scotford Refinery is also currently running at reduced rates, the Company does not anticipate any problems in keeping customers supplied.

The Muskeg River Mine is located about 75 kilometers north of Fort McMurray, Alberta. The Scotford Upgrader is located near Fort Saskatchewan, northeast of Edmonton. Together, these facilities make up the Athabasca Oil Sands Project, a joint venture among Shell Canada Limited (60 percent), Chevron Canada Limited (20 percent) and Western Oil Sands L.P. (20 percent). The Scotford Refinery, located adjacent to the Scotford Upgrader, is owned 100 percent by Shell.