Shell Begins Production from Athabasca Oil Sands Project

Shell Canada

The Athabasca Oil Sands Project achieved a major milestone on earlier this week with start-up and first bitumen production at the Muskeg River Mine, located about 75 kilometers north of Fort McMurray, Alberta. Shipment of diluted bitumen into the Corridor Pipeline is expected to commence over the next few days for delivery to the Scotford Upgrader, located near Fort Saskatchewan, Alberta.

At the Scotford Upgrader, commissioning and testing of the primary distillation units has been successfully completed. Commissioning and testing of the synthetic crude units is underway and progressing on schedule, with first production of synthetic crude oil expected early next year.

The Athabasca Oil Sands Project, a joint venture of Shell Canada Limited (60 percent), Chevron Canada Limited (20 percent) and Western Oil Sands L.P. (20 percent), has been one of the world's largest construction projects in recent years. When the project ramps up to its full production of 155,000 barrels of bitumen per day in 2003, it will supply the equivalent of 10 percent of Canada's oil needs. Shell's share of AOSP production will increase the Company's total production by more than 50 percent.

Tim Faithfull, Shell Canada's President and CEO, said, "Thousands of people have worked extremely hard to bring the Athabasca Oil Sands Project to this significant milestone. We can now see the finish line and look forward to startup of the entire project early in 2003."