Company may delay McKay River project
2008-11-25
By KRISTINE OWRAM, THE CANADIAN PRESS
TORONTO -- Petro-Canada CEO Ron Brenneman says the company is considering a delay of its McKay River oilsands expansion and a $1-billion equipment improvement at its Montreal refinery to reduce costs.
Brenneman, speaking to media ahead of the company's investor day, said the McKay River expansion in northern Alberta, as well as its Montreal coker, haven't yet received regulatory and corporate approvals.
"As a result, we do have the opportunity to move all of those projects from being schedule-driven to what I would call being cost-driven," Brenneman said.
"It's more important for us today to get the costs right than to meet some pre-determined schedule."
The company and its two partners in the Fort Hills oilsands development announced last week they won't decide until next year whether to build the mining portion of the project and are shelving a proposed upgrader indefinitely.
Petro-Canada, UTS Energy Corp. and Teck Cominco Ltd. also said they will review every supply and construction contract to find ways to bring down the Fort Hills development's estimated cost of $24 billion.
Calgary-based Petro-Canada has a 60% stake in Fort Hills, with Teck and UTS each holding 20%.
They recently announced the project's cost had swelled from its original estimate of about $14 billion.
Petro-Canada has been planning to build a coking unit at its Montreal refinery to help it process heavier grades of crude -- including the excess bitumen that could result from Fort Hills if it goes ahead as a mine only -- but a decision on that $1-billion project has been delayed until a labour dispute at the site is resolved.
