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International Oil Daily: Shell Canada Unveils Plan

Shell Canada has even more ambitious oil sands expansion plans than it previously disclosed.

Thursday, January 25, 2007

The company said Wednesday that it intends to increase output from its oil sands mining and in-situ recovery projects in northern Alberta to 770,000 b/d and upgrading capacity to 700,000 b/d. This compares with earlier projections in the 500,000 b/d range by 2010. Shell Canada did not give a date for accomplishing the new goal, but it likely would be no sooner than 2015 (IOD Jan.24,p1).

Shell Canada also disclosed its 2006 financial and operating results Wednesday, which came in below analysts’ expectations. For the full year, earnings dropped to C$1.74 billion (US$1.48 billion) on revenues of C$14.8 billion (US$12.6 billion), from 2005’s net income of C$2 billion on revenues of C$14.4 billion.

Much of the drop came in the fourth quarter, due to lower commodity and product prices and higher exploration expenses. For the year as a whole, oil sands production was below expectations as mechanical problems at the Athabasca project halted operations for several months early in the year.

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