Total's Oil Sands Targets Slip Back 1-2 Years
NEW YORK (Dow Jones Newswires), Feb. 23, 2009
Total SA envisions delays on its Canadian oil sands projects, pushing back the company's expectations for ramping up production, the company's CEO said Monday.
Total has estimated in the past that production will reach 250,000 barrels a day within a decade from its Surmont and Joslyn projects. While the French oil giant had hoped to reach that target by 2015 or 2016, that goal is no longer realistic, said Christophe de Margerie, Total's chief executive, in a media briefing in New York.
"If it is the next decade, it will be at the real end of the decade," he said. "I would not be surprised if the industry as a whole was delayed by one or two years.
De Margerie cited high production costs as an early source of delays, though those expenses are now dropping as work in the region has slackened with falling oil prices. But more-stringent environmental policies will likely force delays at new projects, he said.
"It's not just technical, it's technical and let's say, political," de Margerie said.
Total has amassed substantial holdings in Alberta's oil sands, though only one of its developments -- the joint Surmont project with ConocoPhillips -- has actually started production.
The French oil major also holds majority stakes in the oft-delayed Joslyn mine and the Northern Lights development, which Total acquired last summer with the takeover of Synenco Energy Ltd.
Last month, Total made a hostile bid for UTS Energy Corp., whose main asset is a 20% stake in the delayed Fort Hills oil sands project. Total is understood to be interested in buying out Teck Cominco Ltd.'s 20% stake as well.
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