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Shell starts mining second oil sands project


Wednesday, September 15, 2010 6:02 PM

Tim Kiladze

For the past five years, Royal Dutch Shell PLC (RDS.B-N56.810.611.09%) has been digging its Jackpike Mine and building infrastructure around it, such as cooling towers and crushers, all as part of its Athabasca Oil Sands Project that has a current productoin capacity of 155,000 barrels of oil a day.

The new mine is now ready to start digging up oil sands bitumen and will eventually add another 100,000 barrels of oil a day to Shell’s capacity. By bringing the new project on stream, Shell predicts its global oil and gas production will rise by 11 per cent from 2009 to 2012.

But the Jackpike Mine isn’t fully operational yet. To maximize its potential, Shell must finish expanding its Scotford Upgrader, which refines the heavy oil. That project should be completed later in 2010 or early 2011.

In total, the Athabasca Oil Sands Project is comprised of both the Jackpike Mine and the Muskeg River Mine. Shell owns 60 per cent of the project, but operates the entire thing. Chevron Canada Ltd. and Marathon Oil Corp. evenly split the remaining 40 per cent ownership.


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