press release

Chevron Press Release - Athabasca Oil Sands Project A "Go"

[This press release was issued by Shell Canada Limited.]

CALGARY, Dec. 7, 1999 -- Shell Canada Limited, together with Chevron Canada Resources Limited and Western Oil Sands Inc., today announced approval of the $3.5 billion Athabasca Oil Sands Project. Construction will begin immediately with production planned for late 2002. Under a joint venture agreement, Shell Canada retains a 60 per cent interest in the Project while Chevron and Western each hold 20 per cent interest.

The Athabasca Oil Sands Project joint venture includes:

  • The $1.8 billion Muskeg River Mine, to be constructed on Lease 13, 70 kilometres north of Fort McMurray, Alberta. The Muskeg River Mine will use trucks and shovels to excavate the oil sands, as well as advanced extraction technologies to separate the bitumen from the sands, to produce 155,000 barrels per calendar day of bitumen starting in late 2002. The joint venture has formed a new company to operate the Muskeg River Mine - Albian Sands Energy Inc.
  • The $1.7 billion Scotford Upgrader to be constructed next to Shell's existing Scotford Refinery north of Fort Saskatchewan, Alberta. The Scotford Upgrader will use hydrogen-addition technology to process the bitumen from the Muskeg River Mine into a range of premium, synthetic crude oils. These crude oils will be used to produce clean, high quality fuels to help meet the transportation needs of Canadians. The Upgrader will be operated by Shell.

The Project will follow the principles of sustainable development. It will create meaningful economic and social benefits while managing environmental impact. It will produce synthetic crude oil to help replace declining domestic supplies and reduce dependence on imports. The Project will also create over 4,000 construction jobs and add over $2 billion to Alberta's gross domestic product during construction. Over its 30-year life, approximately 1,000 permanent operating positions will be created and over $5 billion (1997 dollars) contributed in the form of taxes and royalties, to all levels of government.

Project development has involved extensive consultation with local communities, including aboriginal neighbours. The Project will continue to enhance benefits in these communities in the key areas of employment, business, education and training. Consultation will also continue in the areas of environmental planning, monitoring and land reclamation.

Throughout the design, construction and operation of the Project, there will be a best practice approach to safety and environmental management. This includes building on the experience of existing oil sands operators and implementing new technologies to increase environmental performance. Energy efficiency will be a priority and includes the use of gas-fired cogeneration facilities at both the Muskeg River Mine and Scotford Upgrader.

Tim Faithfull, Shell Canada's President and CEO said: "This is an exciting opportunity for Shell Canada. It will be the largest capital investment Shell Canada has ever made - in a growth business that will more than double our liquids production."

Mr. Faithfull added, "We are committed to balance profitability with social and environmental responsibility in this Project. For example, we will proactively manage greenhouse gas emissions from the Project and will set goals for reductions and offsets. We are establishing an independent advisory panel of environmental groups and local representatives to assist us."

Jim Simpson, President of Chevron Canada Resources said, "The Athabasca Oil Sands project is a great new opportunity for Chevron. It provides access to a secure long-term supply of high quality, synthetic oil and positions Chevron to take advantage of future expansion in the area. It also adds substantially to our growth activities offshore Newfoundland and Nova Scotia. We are very pleased to be working with Shell and Western in this exciting new venture."

Guy Turcotte, Chairman and CEO of Western, said, "We are pleased to be a partner in this ambitious venture in a growth business. Many of us have been involved in this project from the beginning and we're excited to see it go ahead."

In addition to its joint venture investment of $2.1 billion, Shell Canada will invest approximately $400 million to modify its existing Scotford Refinery to utilize the new synthetic crude oils produced by the Scotford Upgrader.

As well, a number of companies will construct new facilities to serve the needs of the Athabasca Oil Sands Project under long-term commercial agreements. They include:

  • The Corridor Pipeline, which will transport diluted bitumen from the Muskeg River Mine to the Scotford Upgrader, and connect the Upgrader with refinery and pipeline terminals in the Edmonton area. Corridor will also provide oil storage facilities for the Project. This investment of approximately $600 million will be made by Corridor Pipeline Limited, a wholly owned subsidiary of BC Gas Inc. The pipeline will be operated by another BC Gas subsidiary, Trans Mountain Pipe Line Company Ltd.
  • The ATCO Power Canada Limited Muskeg River Mine gas-fired cogeneration plant, which will provide steam and electricity to meet the needs of the Muskeg River Mine, as well as additional electricity for Alberta consumers. This 170-megawatt cogeneration facility and associated heat recovery equipment will cost approximately $200 million.
  • The ATCO Pipelines Muskeg River Mine natural gas pipeline, which will transport the natural gas needs of the Muskeg River Mine cogeneration plant. Approximately $37 million will be invested to construct this pipeline.

Construction on the Muskeg River Mine and Scotford Upgrader will begin immediately. First oil production is scheduled for late 2002.

Notes to Editors/Investors:

  • Except where noted, all dollars quoted in Canadian funds, and money of the day or as spent' dollars.
  • Bitumen refers to thick, tar-like crude oil.
  • Additional information on Shell Canada and its approach to sustainable development is available on
  • Additional information on Albian Sands, including its approach to sustainable development, employment and contracting opportunities, is available on a new web site
  • High-resolution photos from the Project and a project map are available at

Updated: December 1999