ALBERTA

Shell Says Scrapped Project Not Timed To Coincide With Alberta Budget

10/29/2015 09:36 EDT | Updated 10/29/2015 09:59 EDT

EDMONTON — Royal Dutch Shell says its announcement scrapping the Carmon Creek oilsands project in northwestern Alberta was not deliberately timed to coincide with this week's Alberta budget.

In a letter to Cheryl Oates, Premier Rachel Notley's press secretary, Shell spokeswoman Tara Lemay says the timing of the announcement was "due to the market disclosure of an impairment" in advance of the company's quarterly results.

Lemay says the company was given a brief window after the market closed to release the results and inform staff.

The company has released a formal statement saying it values its relationship with Notley and her government and looks forward "to continuing cooperation in the best interests of Albertans."

Shell made the Carmon Creek announcement on Tuesday, the same day Notley was handing down her budget.

The company cited a lack of pipelines to coastal waters as one reason for the decision.

The European energy giant first announced it would build the 80,000-barrel-a-day, steam-driven operation near Peace River, Alta., in October 2013.

But last March, the company said it would slow down the project while attempting to lower costs and improve its design.

However, this week the company decided the project doesn't rank in its portfolio.

On Thursday, Royal Dutch Shell reported a third quarter loss of $7.4 billion. That compares with a profit of $4.5 billion in the same period last year.

Shell reported $7.9 billion in charges, including $2 billion for the decision to cancel Carmon Creek and $2.6 billion for cancelling drilling in Alaska.

Excluding one-time items and fluctuations in the value of inventories, the company said profit dropped to $1.8 billion, from $5.8 billion a year earlier, reflecting the plunge in oil prices.

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