Global energy giant Royal Dutch Shell announced Wednesday that it will halt constructing its thermal in-situ project in western Canada's Alberta province.
The Anglo-Dutch international oil company said the 80,000 barrels per day production Carmon Creek project will not continue construction due to "capital priorities" and "uncertainties."
"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," Shell explained in the statement.
The project was sanctioned in Oct. 2013, and was announced in March 2015 to be rephrased due to the falling oil prices.
"We are making changes to Shell’s portfolio mix by reviewing our longer-term upstream options worldwide, and managing affordability and exposure in the current world of lower oil prices. This is forcing tough choices at Shell," Chief Executive Officer Ben van Beurden said in the statement.
While Shell owns 100 percent of the project, it will retain leases and consider potential options for it in future.
Shell announced July 30 that it will cut 6,500 jobs in 2015, scale down its investments by $7 billion from last year, and expects a $4 billion operation cost decrease for this year in order to "reshape" the company because of the negative impact of low oil prices.
By Ovunc Kutlu
Anadolu Agency
ovunc.kutlu@aa.com.tr