Company expects to lose $2 billion on fully-owned project in northwest Alta.
Initially sanctioned in October of 2013, Shell announced it would put off the project earlier this year due to the downturn in oil prices. Now, however, the company is pulling out altogether.
“After careful review of the potential design options, updated costs, and the company’s capital priorities, Shell’s view is that the project does not rank in its portfolio at this time. This decision reflects current uncertainties, including the lack of infrastructure to move Canadian crude oil to global commodity markets,” the company said.
“We are making changes to Shell’s portfolio mix by reviewing our longer-term upstream options world-wide, and managing affordability and exposure in the current world of lower oil prices. This is forcing tough choices at Shell,” the company’s CEO, Ben van Beurden, added.
Shell plans to retain its Carmon Creek leases as well as preserve some of the equipment in order to study its options for the asset.
The company expects to take net impairment, contract provision and redundancy as well as restructuring charges of approximately $2 billion as a result of the decision.