London : Royal Dutch Shell Plc, which plans to produce oil from Canada's tar sands for 40 years, earned 67 per cent more from operations in Alberta than from projects elsewhere between 2005 and 2009.
The company earned $20 (Dh73) a barrel from oil-sand mining on average, more than the $12 a barrel it gained from extraction projects excluding tar sands, The Hague-based Shell said in a report posted last week on its website. Oil sands contributed $3.1 billion to Shell's earnings in the period.
Shell and BP Plc shareholders demanded a review of the risks of their Canadian oil sands projects at the companies' annual meetings in April. Shell published its report on oil sands to address environmental and carbon dioxide emissions issues ahead of its shareholder meeting on April 28.
Upstream averages
"Oil sands earnings per barrel are typically higher than Shell upstream averages," the company said. "The initial capital investment in our mining operation on stream was recovered in less than 5 years after start-up."
Shell, with partners Chevron Corp and Marathon Oil Corp, is mining oil sands in the Canadian province of Alberta. The Athabasca Oil Sand Project plans to expand production capacity by about 65 per cent to about 255,000 barrels a day this year or next year, where Shell's share will account for about 4 per cent of its total output.
Since December 2002, the company's Muskeg River Mine in Alberta has supplied bitumen to the Scotford refinery and upgrader, which converts it into refinery-ready crude. The project supplies the equivalent of about 10 per cent of Canada's oil needs.
The unit operating cash costs were around $32 a barrel in 2009, while oil prices averaged around $62 a barrel, Shell said.
In 2008, Shell delayed an application for regulatory approval for its Carmon Creek oil-sands development in Canada and postponed the second-phase expansion of the Athabasca project because of rising construction costs.
