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Reuters: UPDATE 1-Shell resumes some oil sands mining

Fri Dec 21, 2007 11:24am EST 

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CALGARY, Alberta, Dec 21 (Reuters) – Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) has resumed some oil sands mining at its Athabasca project in northern Alberta, but volumes will be tied to the gradual start-up of its Scotford upgrader near Edmonton, a spokesman said on Friday.

One of two production trains at the 155,000 barrel a day upgrader, which was shut down after being damaged in a Nov. 19 fire, is still expected to resume operations before the end of this month, Shell’s Randy Provencal said.

There is no target date yet for start-up of the other production train, which turns diluted extra-heavy crude from the oil sands into refinery-ready light oil, Provencal said. That was the one damaged in the blaze.

The company halted production at the Muskeg River mine, near the oil sands hub of Fort McMurray, Alberta, in conjunction with the upgrader outage.

“Its progress will be timed with the progress that we’re making here at the upgrader,” he said.

The two sites are connected by pipeline.

Meanwhile, Shell’s 98,000 barrel a day Scotford refinery is running at full volume using feedstock purchased from third parties, Provencal said. The refinery is part of the same complex as the upgrader.

Shell owns 60 percent of the mine and upgrader and its partners are Chevron Corp (CVX.N: Quote, Profile, Research) and Marathon Oil Corp (MRO.N: Quote, Profile, Research), which have 20 percent each. Shell is the sole owner of the refinery. (Reporting by Jeffrey Jones; Editing by Scott Anderson)

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