Commodity Blog

Royal Dutch Shell PLC, Europe’s largest oil company, said the cost of producing Canadian oil sands rose to about $38 (U.S.) a barrel last year, including fuel expenses.
Shell’s oil-sands production in Canada last year was 80,000 barrels a day, chief financial officer Peter Voser said yesterday on an analyst call. Costs averaged $29 a barrel in 2007, when Shell produced 87,000 barrels a day, he said.
“We expect that to make a profit” in Canada, CEO Jeroen Van Der Veer said yesterday in The Hague.
Shell withdrew an application in November for government approval of its Carmon Creek oil-sands development in Alberta because of rising industry costs.
In October, the company postponed the second-phase expansion of its Athabasca oil-sands project. Energy costs account for about 20 per cent to 25 per cent of the oil sands production expenditure.
Van Der Veer said “very soon our big projects will kick in.”

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