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

Bantam Broncs fall hard in Stettler

Team shutout by league’s top team

Red Deer-Lacombe candidate “thrilled” voters loved People’s Party of Canada platform

Laura-Lynn Thompson attended a results party at Sylvan Lake Golf and Country Club on Oct. 21

Blaine Calkins takes the seat for Red-Deer Lacombe

With 50 per cent of the riding counted, Calkins has over 21,000 votes

Trudeau has won the most seats — but not a majority. What happens next?

Trudeau will have to deal with some of the implications of Monday’s result

LIVE MAP: Results in Canada’s 2019 federal election

Polls are now closed across the country

Scheer says Canada more divided than ever, as NDP and Bloc hold cards close

While Liberals were shut out of two key prairie provinces, they took two-thirds of the seats in Ontario

Rebels extend losing streak to 5 against ‘Canes

4-3 loss comes after a disappointing 6-5 S/O loss on Saturday

People’s Party of Canada’s anti-immigration views ‘didn’t resonate’ with voters: prof

Party was formed on anti-immigration, climate denying views in 2018

PODCAST: Political Scientist Marc Froese discusses the results of the Federal Election

Western alienation, results, minority governments and more highlight this week’s The Expert podcast

Husky Energy lays off staff to align with lower spending plans and strategy

Company had 5,157 permanent employees at end of 2018, according to regulatory filing

‘Issue-by-issue parliament’: Expert says Liberals need to placate NDP to be effective

Scandals, social issues, racism defined 2019 federal election, SFU prof says

‘Wexit’ talk percolates day after Liberals returned to power with minority

An online petition is calling for a western alliance and Alberta to separate

Opposition to Trans Mountain won’t change, B.C. minister says

Pipeline projects proceed under minority Trudeau government

Alleged RCMP secret leaker must stay with B.C. parents while on bail

Cameron Ortis, 47, is charged with violating the Security of Information Act

Most Read