Imperial Oil president and CEO Rich Kruger prepares to address the company’s annual meeting in Calgary, Friday, April 28, 2017.THE CANADIAN PRESS/Jeff McIntosh

Imperial Oil slows development of Aspen project, cites Alberta production cuts

Project was previously projected to add 75,000 barrels per day of bitumen production

Imperial Oil Ltd. has slowed the development of a $2.6-billion oilsands project because of uncertainty due to the Alberta government’s oil production curtailment program and other challenges.

First production from the Aspen in-situ project had been expected in 2022 but will now likely be delayed by at least one year, Imperial said Friday.

The project was previously projected to add 75,000 barrels per day of bitumen production to Imperial’s output of about 300,000 bpd.

The Calgary-based company — an integrated producer and refiner — sanctioned the project in November, after receiving provincial approval but before the Alberta government announced a production curtailment program effective Jan. 1.

The province mandated the production cuts in an effort to reduce a price discount on oil produced in Western Canada.

READ MORE: Alberta rail plan results from oil curtailment plan mistakes, Husky execs say

Rich Kruger, Imperial’s chairman, president and chief executive, said in a statement that the decision to delay the Aspen project was a difficult choice, given that it had received a green light to proceed only in November.

“However, we cannot invest billions of dollars on behalf of our shareholders given the uncertainty in the current business environment,” he said.

“That said, our goal is to ensure the work we do this year will enable us to effectively and efficiently resume planned activity levels when the time is right.”

He added that the decision to return to planned project activity levels will depend on factors such as “any subsequent government actions related to curtailment and our confidence in general market conditions.”

The Alberta government initially ordered production of raw crude oil and bitumen to be cut by 325,000 barrels per day to deal with low prices.

Since then, the province has eased the mandatory production cuts as the discount for Western Canadian Select bitumen-blend oil compared with New York-traded West Texas Intermediate has fallen.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

City of Wetaskiwin presents 2019 budget at open house

Mayor Tyler Gandam said ‘zero based budgeting’ was council’s goal

New Democrats would bring in $25 daycare if re-elected: Notley

Notley said the plan would include adding 13,000 daycare spaces

Central Alberta livestock spring farm forecast

Alberta spring beef market looks steady, producers faring well

Supporters rally for Jason Kenney as UCP leader stops in Red Deer

Kenney promises equalization reform, stopping ‘Trudeau-Notley’ payroll hike, trade, economic mobility

The Millet Curling Club dates back to 1925

By 1936 Millet needed a bigger curling rink

The good, bad and the unknown of Apple’s new services

The announcements lacked some key details, such as pricing of the TV service

Morneau unveils principles for Indigenous ownership in Trans Mountain pipeline

The controversial pipeline was bought by Ottawa last year

Refugee who sheltered Edward Snowden in Hong Kong arrives in Canada

Vanessa Rodel and her seven-year-old daughter Keana arrived in Toronto this week

New UMSCA trade deal getting a boost from Trump, business groups

The trade deal is designed to supplant the North American Free Trade Agreement

Trudeau says he, Wilson-Raybould had cordial conversation last week

Trudeau denies anything improper occurred regarding SNC-Lavalin and the PMO

SNC-Lavalin backtracks on CEO’s comments surrounding potential job losses

Top boss had said protecting 9,000 jobs should grant leniency

Sources say Trudeau rejected Wilson-Raybould’s conservative pick for high court

Wilson-Raybould said Monday “there was no conflict between the PM and myself”

Social media comments continue to dog ranks of United Conservative candidates

Eva Kiryakos was running in Calgary-South East in the April 16 vote

Apple announces its long-awaited streaming TV service

The iPhone has long been Apple’s marquee product and main money maker, but sales are starting to decline

Most Read