Shell to stand pat on oil sands as­sets

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - — Bloomberg News

Royal Dutch Shell PLC is un­likely to take on new oil sands projects as it main­tains a grip on costs af­ter crude’s crash forced com­peti­tors to write down Cana­dian re­serves.

While Shell’s ex­ist­ing oil sands oper­a­tions gen­er­ate strong cash flows, the ex­pense of de­vel­op­ing new projects dis­cour­ages more in­vest­ment, Chief Ex­ec­u­tive Of­fi­cer Ben Van Beur­den said in an in­ter­view.

Oil sands, the re­serves of heavy crude found pri­mar­ily in north­ern Al­berta, lured in­vestors in the past decade as oil’s surge above $100 a bar­rel made the dif­fi­cult ex­trac­tion process eco­nomic. But they’ve fallen out of fa­vor af­ter the sub­se­quent mar­ket col­lapse as com­pa­nies dump ex­pen­sive projects amid fears that com­pe­ti­tion from low-cost crude could strand costlier as­sets.

“All of those are rea­sons we are un­likely to de­velop new oil sands projects,” Van Beur­den said in London. “There are no plans for growth cap­i­tal to be in­vested in oil sands.”

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