ALBERTA – The cost of the first phase of the proposed Athabasca Oil Sands Project expansion is skyrocketing, SHELL CANADA of Calgary warned last week. The AOSP is owned 60% by Shell, 20% by WESTERN OIL SANDS and 20% by CHEVRONTEXACO. According to Western, costs will be up 50% from the $7.3 billion estimated as recently as August 2005, and that number was up from the original $4.0 billion figure.
One of the key factors facing the AOSP expansion, and many other large construction projects around the world, is the intense demand for construction labour, materials and supplies which have resulted in unprecedented increases in capital costs. This demand is further intensified in Alberta by the development of multiple oil sands projects, Western said in a press release.