Shell Canada Announces Plans for Oil Sands Growth

Shell Canada on Wednesday updated its long-term oil sands growth plans to increase minable bitumen production to approximately 770,000 barrels a day, while increasing upgrading capacity to approximately 700,000 barrels a day.

In April 2005 Shell Canada announced its "building block" strategy designed to increase minable bitumen production and upgrading capacity through a series of expansion projects. Shell Canada's first 100,000-barrel-a-day expansion, AOSP Expansion 1, was approved in November 2006 with full start-up expected in 2010.

Beyond AOSP Expansion 1, Shell Canada plans additional oil sands expansions that could potentially increase mineable bitumen production to approximately 770,000 barrels a day. In addition to existing regulatory approvals and expansion plans, Shell Canada's growth strategy includes Jackpine Mine Expansion and an additional mine, called Pierre River Mine, on the west side of the Athabasca River.

Bitumen upgrading capacity could also potentially be increased to about 700,000 barrels a day through a series of Shell Canada-owned upgrader projects in the Fort Saskatchewan area, east of Edmonton. New upgrading facilities would process Shell Canada's share of future Athabasca minable bitumen production as well as bitumen from the company's in situ oil sands developments. As previously announced, heavy oil upgrading and refining options in Ontario are also being considered.

"Seeking early stakeholder input and regulator support is fundamental to our growth strategy," said Clive Mather, Shell Canada President and CEO. "We are issuing these Public Disclosures so that we can start the process of our next phase of oil sands development. Shell Canada has major land holdings in the Athabasca region and we estimate that our minable bitumen resource base could ultimately support 770,000 barrels a day of production. This will provide a secure source of energy and economic benefit for Canadians for decades to come."

Actual timing for Shell Canada's projects will depend on market conditions, key economic indicators, the ability to meet our sustainable development criteria and the outcome of the regulatory process.

Public disclosure documents for the Shell Canada Oil Sands Expansion and Shell Canada Upgrader are available at or by calling toll-free 1-800-250-4355. Regulatory submissions for these projects will be filed with regulatory authorities later in 2007. It is anticipated that regulatory decisions will be received by the end of 2009.

Regulators will make draft terms of reference for related Environmental Impact Assessments for these projects available for public inspection and comment.

Shell Canada holds a 60-percent interest in the Athabasca Oil Sands Project (AOSP), a joint venture with Chevron Canada Limited (20 percent) and Western Oil Sands L.P. (20 percent). The AOSP consists of the Muskeg River Mine located north of Fort McMurray in northern Alberta, and the Scotford Upgrader near Edmonton, Alberta. Shell Canada also has in situ bitumen operations near Peace River and Cold Lake in Alberta.

Chevron Canada Limited and Western Oil Sands L.P. have the option to participate with Shell Canada in the development of the Jackpine Mine Expansion and the Pierre River Mine.