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Global energy investment hit by financial crisis

The Calgary Herald

Reuters

Published: Saturday, December 27, 2008

The growing financial crisis and plunging energy prices have forced companies to scale back spending and delay projects, with expensive ventures in the oilsands hardest hit.

Below is a list of projects that have been delayed or scaled back in recent months, as well as other related news.

-Dec. 15: connacher oil and gas ltd. slows bitumen production at its Great Divide thermal oilsands project to 5,000 barrels per day from 9,000 bpd because of low prices, and it suspends construction of its second thermal oilsand development, the $345-million Alger project.

-Dec. 8: Santos ltd., one of the partners in the $574-million US Reindeer gas project off Australia’s west coast, says the project has been deferred indefinitely after a proposed key customer failed to commit to a sales contract.

-Dec. 4: Norway’s StatoilHydro scraps plans for a $16-billion upgrader for its oilsands holdings, citing high costs, weak oil prices, economic turmoil and a lack of “legislative clarity.” Company will go ahead with plans to produce as much as 200,000 barrels per day of bitumen, but sell it on the open market instead of turning it into more valuable synthetic oil.

-Nov. 27: irving oil ltd. says it will slow construction on its planned $7 billion refinery at Saint John, N. B., breaking work into two $4 billion phases of 150,000 bpd each and stretching construction over as much as eight years from 2011 instead of four.

-Nov. 27: Royal Dutch Shell announces a second project delay in its oilsands holdings. The company says it has withdrawn a request for regulatory approval for its 100,000 bpd Carmon Creek thermal oilsands projects as it tweaks its design to lower costs.

-Nov. 24: Russia’s lukoil may delay investment at its Bulgarian refinery, but the plant will keep its crude processing targets for this year and next.

-Nov. 17: Petro-canada defers construction of an upgrader for its $21-billion Fort Hills oilsands project. It will not make decision on the mine until 2009 as it expects costs to fall as oilsands projects fall by the wayside. It had planned a go-ahead decision in December.

-Nov. 13: Harvest energy trust defers $2-billion expansion of Come By Chance refinery in Newfoundland. Instead of 75,000 bpd expansion, which would have boosted output to 190,000 bpd, it will work on $300 million of debottlenecking projects.

-Nov. 6: canadian natural Resources ltd. slows spending on second phase of Horizon oilsands project for 2009 after first phase costs rise to $9.7 billion, up 42 per cent from 2004 estimate. It also scraps timelines for Phase 2, which would lift output to 250,000 bpd from 110,000.

-Nov. 5: Sunoco inc. to save $375 million by scrapping upgrade of Tulsa, Oklahoma, refinery; still looking to sell plant, which accounts for nearly 10 per cent of 910,000-bpd capacity.

-Oct 30: Royal Dutch Shell to delay investment decision on second expansion of Athabasca oilsands project.

-Oct 23: Suncor energy inc. delays oilsands upgrader for $20.6-billion Voyageur expansion by one year to 2013. Expansion boosts production from Suncor’s oilsands operations near Fort McMurray to 550,000 bpd from 350,000.

-Oct 23: nexen inc. and opti canada inc. delay second phase of Long Lake oilsands project to 2009. Expansion would double production of synthetic crude to 120,000 bpd. First phase cost $6.1 billion and is now just starting up.

-Oct 23: Value creation group’s $4-billion Heartland upgrader near Edmonton reported halted. First phase would have processed 77,500 bpd of bitumen into synthetic crude. Privately held company has regulatory approval for plant with 260,000 bpd capacity.

© The Calgary Herald 2008

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