Shell Canada reviewing costs for Carmon Creek oilsands project

Shell Canada has withdrawn a regulatory application for an expansion to its Carmon Creek oilsands project as it looks at ways to cut costs, a spokeswoman said Thursday.

The company submitted a regulatory application in December 2006, but has since decided to make some technical changes to the steam-assisted gravity drainage development in Alberta's Peace River region.

"We had planned to submit an update to the regulatory application by the end of this year," said Shell Canada spokeswoman Adrienne Lamb.

But since the company was already looking at ways to cut costs at the site, it opted to withdraw the application until the review wraps up.

"We're doing a review of the project to look at opportunities to decrease costs and improve profitability of the project," Lamb said."Rather than try to continue with an update, what we've decided to do is to withdraw the regulatory application and when we have the recommendations from this current review, look to submit a new application."

Shell will have a better idea in early 2009 of precisely when a new application will be filed.

The company still intends to go ahead with the 100,000-barrel-per-day expansion, which will be split into two 50,000-barrel-per-day phases.

Last month, Shell said it would delay future phases of its Athabasca oilsands mine north of Fort McMurray as a means of dealing with rising costs and low commodity prices.