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Reuters: Royal Dutch Shell snaps up more oil sands acreage

Wed Sep 6, 2006 7:08 PM EDT

CALGARY, Alberta (Reuters) – Royal Dutch Shell has added to its new acreage position in Canada’s oil sands with a C$101 million ($92 million) acquisition of leases in Northern Alberta, the oil major said on Wednesday.

Shell unit SURE Northern Energy said it was the successful bidder for five parcels of land in the latest Alberta government sale. The acreage is adjacent to 10 parcels the company picked up in February for a record C$465 million.

It acquired another parcel in July for C$5.1 million through a land agent, the company said.

The Shell unit has already started drilling on its lands to gauge how an oil sands project may be structured, it said.

SURE Northern anonymously made its first acquisition at the highest price that bare land in the oil-rich province had ever attracted, creating grist for the rumor mill in the Canadian oil patch.

It came as a surprise when Royal Dutch Shell announced it was the buyer in March because Shell’s 78-percent-owned subsidiary, Shell Canada Ltd. , is already among the largest oil sands developers.

Wholly owned unit Shell EP Americas has said the new business will not compete with Shell Canada, which is planning an expansion of its oil sands mining venture that may cost as much as C$12.8 billion.

“We believe there is potential in these parcels that complements and strengthens the position we established earlier this year,” SURE Northern President Steve Crane said in a statement.

($1=$1.11 Canadian)
 
© Reuters 2006. All rights reserved.

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