AMSTERDAM, Netherlands — Royal Dutch Shell PLC said Wednesday a major oilsands project in Canada is now producing 100,000 barrels per day, nearly doubling the company’s production from the unconventional source.
The Jackpine mine project, about 70 kilometres north of Fort McMurray, has been five years in the building and cost an estimated US$2 billion.
With the 100,000 barrels of oil per day equivalent from Jackpine now online, total production by the Shell-operated Athabasca oilsands project has increased to a quarter of a million barrels per day.
Shell’s total production was 3.11 million barrels of oil and equivalents per day in the second quarter.
Bitumen from both the Jackpine mine and Shell’s existing Muskeg River mine, 75 kilometres north of Fort McMurray, are processed at the Scotford upgrader, which is now approaching capacity, Shell said.
Shell has invested heavily in new production capacity throughout the downturn after an accounting scandal in 2004 forced it to slash proven reserves.
The company’s production has been declining for nearly a decade but Shell expects it to rise more than 10 per cent by 2012 from 2009 levels.
“The Jackpine mine is a tremendous addition to our oilsands portfolio,” Marvin Odum, Shell upstream Americas director and president of Shell Oil Co., said in a news release.
“Canada’s oilsands are an important source of energy in a world with increasing energy needs,” Odum added. “Shell is committed to developing this resource responsibly and to pursuing opportunities to reduce the impacts of our oilsands operations.
“With some 255,000 barrels per day of capacity now in hand next steps will include the efficiency improvements that can come from integrating and operating these assets together, with incremental growth potential from de-bottlenecking investments,” the company said in a statement.
Meanwhile, in order to reduce the CO2 footprint of its oilsands operations, Shell is continuing to advance its proposed carbon capture and storage project, Quest, which could capture and store underground some one million tonnes of CO2 per year from the Scotford upgrader, the company said.
Shell Canada Energy is 60 per cent owner and operator of the Athabasca oilsands project, with Chevron Canada Ltd., a subsidiary of Cheveron Crop. (NYSE:CVX) and Marathon Oil Corp. (NYSE:MRO) each holding 20 per cent.
— With files from The Canadian Press