CALGARY - Royal Dutch Shell PLC (NYSE:RDS) will develop its oilsands holdings at a slower pace in the future, the energy giant's chief executive told a U.K. newspaper.
Peter Voser, who took the helm of the Anglo-Dutch firm in July, is quoted in the Financial Times as saying growth in the oilsands will be done at a "very much slower" pace than in the past.
Shell intends to focus on exploration for new resources round the world rather than exploit costly "unconventional" ones like the oilsands, Voser told the Times.
Shell is a 60 per cent owner of the Athabasca Oil Sands Project, which includes a massive mining operation north of Fort McMurray, Alta. as well as an upgrader near Edmonton to process the heavy oilsands crude into higher quality synthetic crude oil.
The other partners in Athabasca include Chevron Corp. and Marathon Oil Corp.
The companies are in the midst of increasing production from Athabasca to 255,000 barrels of oil a day.
But Shell has "clearly scaled down" earlier plans to eventually ramp up to 700,000 barrels a day, Voser said in the Times interview.
"Over the past two years and certainly over the past six to eight months, I've taken the pace out of that because we have enough other growth opportunities," he said.
As energy companies around the globe look to bulk up their reserves, the oilsands have presented an attractive investment opportunity because of their sheer size.
However, Voser said costs in the oilsands are making investment there less attractive than other parts of the world.
A spate of announcements last week in the oilsands seemed to signal just the opposite - the time is right to invest in the oilsands again after the recession forced a lull in activity.
Canadian Natural Resources Ltd. (TSX:CNQ) said it was aiming to sanction two of its oilsands projects - Kirby and Horizon Phase 2 - by late this year.
A day earlier Husky Energy Inc. (TSX:HSE) said it and its British partner BP PLC would spend $2.5 billion on their joint Sunrise oilsands project - a more than $1-billion reduction from the development's previous price tag. Construction is expected to begin later this year.
France's Total SA and its U.S. partner ConocoPhillips also said they were quadrupling output from their Surmont project from 27,000 barrels of oil per day to 110,000 barrels per day. Production is set to start up in 2015.