CALGARY — Royal Dutch Shell PLC (NYSE:RDS) will develop its oilsands holdings at a slower pace in the future, the energy giant’s chief executive told a U.K. newspaper.
Peter Voser, who took the helm of the Anglo-Dutch firm in July, is quoted in the Financial Times as saying growth in the oilsands will be done at a “very much slower” pacet.
Shell intends to focus on exploration for new resources around the world rather than exploit costly “unconventional” ones like the oilsands, Voser told the Times.
Shell is a 60 per cent owner of the Athabasca Oil Sands Project, which includes a massive mining operation north of Fort McMurray and an upgrader near Edmonton to process the heavy oilsands crude.
Chevron Corp. and Marathon Oil Corp. evenly split the remaining stake in Athabasca.
The companies are in the midst of increasing production from Athabasca to 255,000 barrels of oil a day.
But Shell has “clearly scaled down” earlier plans to eventually ramp up to 700,000 barrels a day, Voser said.
“Over the past two years and certainly over the past six to eight months, I’ve taken the pace out of that because we have enough other growth opportunities,” he said.
Voser’s predecessor at Shell, Jeroen Van der Veer, said in the fall of 2008 that the company would delay making a decision on future expansion phases.
“We had in mind to decide on the second expansion in 2009,” he said at the time. “But at this moment, if you look at the combination of inflated labour costs and raw material prices in the form of equipment, we felt that we had better delay that.”
As energy companies around the globe look to bulk up their reserves, the oilsands have presented an attractive investment opportunity because of their sheer size.
However, Voser said costs in the oilsands are making investment there less attractive than other parts of the world.