Total Abandons $11 Billion Alberta Tar Sands Play
The Joslyn oil sands mine has been shelved indefinitely, a result of rising industry costs that made the $11-billion project financially untenable. French energy powerhouse Total SA, along with its partners in the Joslyn north oil sands project, unanimously decided to put the project on hold because of rising cost pressures across the entire energy industry, said André Goffart, the head of Total’s Canadian division.
“Joslyn is facing the same challenge most of the industry world-wide [is], in the sense that costs are continuing to inflate when the oil price and specifically the netbacks for the oil sands are remaining stable at best – squeezing the margins,” he told reporters in a conference call.
“We are still in the cycle within this industry where cost inflation in general is going much faster than price adjustments. We know that there is a rebalancing that needs to be done.”
Major energy players have addressed a variety of industry challenges in recent years by becoming more selective with spending, developing projects in smaller chunks or postponing work in a bid to improve financial returns. Rising costs for labour and materials have long worked against the economics of new projects, and limited pipeline access to ship oil has weighed on prices for Alberta oil. Total is signed up to ship oil on three major undeveloped pipeline projects facing uncertainty: Keystone XL, Northern Gateway and the Trans Mountain expansion.
EDIT
http://www.theglobeandmail.com/report-on-business/joslyn/article18914681/#dashboard/follows/
= new reply since forum marked as read
