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

Lacombe County hosting farm vehicle inspections

Lacombe County will be hosting a two-day voluntary farm vehicle safety check

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

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

‘Living Free’ talk supports Lacombe’s Mary C. Moore Public Library

Marco Ste. Marie will give a motivational talk on April 4th at the LMC

Blackfalds closing road for safety concerns

Motorists are required to use HWY 2A instead of Broadway Avenue

Merry Guanas poised to be Lacombe’s first cannabis dispensary

Cannabis retail owner expects a six-month wait before industry comes to city

WATCH: ‘Napalm Girl’ discusses journey from hatred to forgiveness in Lacombe

Burman University’s Herr Lecture Series welcomed Kim Phuc Phan Thi to Lacombe

Social media comments continue to dog ranks of United Conservative candidates

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

Norway opens probe into why cruise ship ventured into storm

The Viking Sky was headed for southern Norway when it had engine problems on Saturday afternoon

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

Trudeau delivers campaign-style speech while introducing candidate Taggart

The Order of British Columbia recipient said she wants to be the people’s voice in Ottawa

15 Canadians on cruise ship that was stranded off Norway; one injured

The cruise ship was carrying 1,373 passengers and crew when it issued a mayday call on Saturday afternoon

Terror at sea: Helicopter rescues frightened cruise passengers in Norway

The Viking Sky cruise ship was carrying 1,300 passengers and crew when it experienced engine trouble

DOJ: Trump campaign did not co-ordinate with Russia in 2016

Attorney General William Barr said special counsel “does not exonerate” Trump of obstructing justice

Most Read