CALGARY, Nov. 23 /CNW/ - Shell Canada announced today a 2007 investment
plan totalling $4 billion, nearly 50 per cent higher than the 2006 plan. The
2007 plan will include more than $3.6 billion of capital expenditures and
almost $400 million of related exploration and pre-development expenses that
will deliver profitability and growth now and into the future.
"This investment plan supports Shell Canada's growth in unconventional
oil and gas while maintaining the leadership position of our Oil Products
business," said Clive Mather, President and CEO, Shell Canada Limited. "North
American and global economies are generating long-term energy demand which
encourages the development of Canadian oil sands and unconventional gas.
Growth will be funded from our robust operational earnings and strong balance
sheet. Key points of leverage are our high quality leases, access to
technology, depth of professional skills and our overarching commitment to
sustainable development."
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Shell Canada is focussing resources on the development of growth assets,
including:
- the 100,000 barrel per day (bpd) expansion of the Athabasca Oil Sands
Project (AOSP Expansion 1),
- a 100-well, cold production program in the Peace River area, and the
start-up of the 10,000 bpd Orion SAGD project (phase 1) near Cold
Lake, Alberta, which together will help bring the in situ bitumen
production to more than 50,000 bpd by 2008, and
- the continued ramp-up of the company's basin centred gas program,
targeted to deliver 100 million cubic feet per day by the end of
2007.
The investment program also provides for future growth through
exploration and the positioning of strategic business opportunities
including:
- advancing the company's position in other unconventional gas basins
(coal bed methane and shale gas) and in the frontier basins of
Canada, including the Orphan Basin offshore Newfoundland,
- pre-development work on subsequent oil sands mining and in situ
expansions that will take the company towards its goal of more than
500,000 bpd of bitumen production, and
- pre-development and front-end engineering, costing some $50 million
in 2007, to determine the viability of a new 150,000 - 250,000 bpd
heavy oil refinery near Sarnia, Ontario. As previously announced,
Shell Canada has been examining the potential to maximize value from
its growing oil sands production in Alberta, through the expansion of
its manufacturing infrastructure in eastern Canada to meet the
increasing demand for light oil. The company has a 40-person team
working to progress design, assess environmental impact and undertake
a public consultation program. Subject to a satisfactory outcome of
this work and regulatory approvals, a decision to proceed would be
made in the next two to three years. If Shell Canada does proceed,
this pacesetter facility would utilize some of the existing Sarnia
refinery assets and employ state-of-the-art technology to deliver
improved operational and environmental performance over existing
refineries in the region.
"In 2007, Shell Canada will continue its focus on operational excellence
to make the most of our existing assets. We will benchmark our operations and
adopt global best practices to generate top performance," said Clive Mather.
"Strong earnings and operating cash flow will provide the basis for continued
investment levels of about $4 billion per year over the planning period."
Plan Details:
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Business Unit $(Millions)
E&P (Exploration 40 % and Development 60%) 1,070
Foothills 430
Unconventional Gas 470
Frontier 130
Pre-development for growth 40
Oil Sands 2,450
AOSP Expansion 1570
In situ growth 490
Pre-development for growth 170
AOSP base business 220
Oil Products 470
Manufacturing & Distribution 250
Marketing 160
Pre-development for Growth 60
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Cautionary Note
This document contains "forward-looking statements" based upon
management's assessment of the Company's future plans and operations. The
forward-looking statements contained in this document include references to
anticipated growth, growth strategy and long-term profitability, future
capital and other expenditures, organizational and financial capability,
development, drilling, construction and expansion, the viability and benefits
of planned and future expansion projects, the timing of investment decisions,
upgrading capacity, construction of manufacturing infrastructure, resources
and reserves estimates, future production of resources and reserves, receipt
of regulatory approvals, the effects and benefits of technology used by the
Company, operational reliability, project schedules and execution, refining
margins, market share and market conditions.
Readers are cautioned not to place undue reliance on forward-looking
statements. Although the Company believes that the expectations represented by
such forward-looking statements are reasonable based on the information
available to it on the date of this document, there can be no assurance that
such expectations will prove to be correct.
Forward-looking statements involve numerous assumptions, known and
unknown risks, and uncertainties that may cause the Company's actual
performance or results to differ materially from any estimates or projections
of future performance or results expressed or implied by such forward-looking
statements. These assumptions, risks and uncertainties include, but are not
limited to, demand for oil, gas and related products, disruptions in supply,
fluctuations in oil and gas prices, industry operating conditions, operating
costs, stakeholder engagement, project startup, schedules and execution,
market competition, operational reliability, labour availability, shortages of
materials and equipment, the uncertainties involving the geology of oil and
gas deposits and reserves estimates, including the assumption that the
quantities estimated can be found and profitably produced in the future, the
continued viability of technology used by the Company, general economic
conditions, changes in law or government policy, and other factors, many of
which are beyond the control of the Company.
The forward-looking statements contained in this document are made as of
the date of this document and the Company does not undertake any obligation to
update publicly or revise any of the forward-looking statements contained in
this document, whether as a result of new information, future events or
otherwise, except as required by law. The forward-looking statements contained
in this document are expressly qualified by this cautionary note.
