Royal Dutch Shell announced its third-quarter earnings of $1.8 billion. The figure includes $2 billion in losses because of the company's decision, announced at the same time, to stop construction of its Carmon Creek tar sands plant, near the town of Peace River, Alberta. It cited inadequate pipeline capacity as the reason for the stoppage. The facility was designed to extract 80,000 barrels of oil per day. The company is retaining its lease and hence the ability to resume construction. The company also announced a $2.6 billion write-off resulting from its activities, now ended, off the Alaskan coast (earlier story).
Coverage:
The announcement comes shortly after the release of a white paper, "Lockdown: the End of Growth in the Tar Sands", by Oil Change International, a group critical of the oil industry. However, the Conference Board of Canada recently predicted (summary) that "Canadian crude oil production is expected to expand significantly over the medium term."
(Score: 0) by Anonymous Coward on Saturday October 31 2015, @11:11PM
I had meant to revise "as the reason" to "among the reasons"; I apologise for forgetting to correct that. The CEO did mention "managing affordability and exposure in the current world of lower oil prices" in his statement. When there isn't enough pipeline capacity, oil can be moved by train, but at greater cost. In other words, lack of capacity results in higher cost.
After submitting this, I found an interesting thing in their quarterly results:
They seem to be predicting that fossil fuels overall, and especially shale gas, will be less profitable than previously expected. I wonder what scenarios they have in mind.