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<p class=MsoNormal><b><font size=3 face=Arial><span style='font-size:12.0pt;
font-family:Arial;font-weight:bold'>Shell backs out of oil sands project<br>
</span></font></b><span class=smtext1><b><font size=1 face=Arial><span
style='font-size:7.5pt;font-weight:bold'>(<a
href="http://www.post-trib.com/business/1048690,shell.article">http://www.post-trib.com/business/1048690,shell.article</a>)</span></font></b></span><b><font
face=Arial><span style='font-family:Arial;font-weight:bold'><o:p></o:p></span></font></b></p>
<p class=MsoNormal><font size=1 face=Arial><span style='font-size:9.0pt;
font-family:Arial'>July 10, 2008<o:p></o:p></span></font></p>
<p class=MsoNormal><b><font size=1 face=Arial><span style='font-size:9.0pt;
font-family:Arial;font-weight:bold'>By Gitte Laasby and Christin Nance Lazerus <o:p></o:p></span></font></b></p>
<p><b><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial;
font-weight:bold'>Post-Tribune staff writers <o:p></o:p></span></font></b></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>An
oil giant that planned to refine the same Canadian tar sands as <u>BP Whiting</u>
has canceled plans for an expansion in <st1:place w:st="on"><st1:State w:st="on">Ontario</st1:State></st1:place>.
<o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Shell
<st1:country-region w:st="on">Canada</st1:country-region> is scrapping a
proposed refinery project in <st1:City w:st="on">Sarnia</st1:City>, which would
have turned tar-like crude from oil sands in <st1:State w:st="on">Alberta</st1:State>,
<st1:place w:st="on"><st1:country-region w:st="on">Canada</st1:country-region></st1:place>,
into refinery-ready light oil, the company announced Tuesday. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>But
BP Whiting's modernization will continue to move forward, BP spokeswoman Sarah
Howell said. The company is proceeding with the project, which would allow the
refinery to process more Canadian tar sands. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>"We've
obviously put a lot of work into the plan and background and we remain
confident in it," Howell said. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>"We
are two different companies. We work differently. We have different criteria. Our
company is continuing to move forward. We're well-aligned with what the current
thought is around bringing increased diversity and security and supply of
energy sources." <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>But
Shell's decision could affect BP Whiting's ultimate fate, said <st1:PersonName
w:st="on">Denny Larson</st1:PersonName>, executive director of California-based
Global Community Monitor, who has helped the Hammond-based Bucket Brigade
protest BP Whiting's modernization. Larson said a firestorm of environmental
protests was part of the reason Shell canceled its plans. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>"They're
never going to acknowledge that because that would encourage people to do it. I
think it's a watershed event that a project has been canceled. If you noticed
what they said, they did say market forces, labor issues, but they're things
that do have an impact on BP and every oil company," Larson said. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Shell
spokeswoman Denita Davis disagreed that there were environmental protests of
the project, saying Shell received "the utmost support" from
provincial government and stakeholders. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>"Whenever
we analyze, we look at both short- and long- term. That includes availability
of resources, contractors, material and the oil market. This project was in the
very early stages. We were doing the predevelopment work," she said. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Shell
said in a news release it assessed all aspects of the proposed project,
including the current project execution environment, market conditions and the
current inflationary pressures across the oil and gas industry. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Canadian
officials are considering a moratorium on new tar sands projects because of
concerns about greenhouse gas emissions. Larson said that could cut off
availability of raw material for BP. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Shell
officials are considering upgrading facilities in <st1:City w:st="on">Martinez</st1:City>,
<st1:State w:st="on">Calif.</st1:State>, and <st1:place w:st="on"><st1:City
w:st="on">Deer Park</st1:City>, <st1:State w:st="on">Texas</st1:State></st1:place>,
to deal with the oil sands. <o:p></o:p></span></font></p>
<p><st1:place w:st="on"><st1:City w:st="on"><font size=1 face=Arial><span
style='font-size:9.0pt;font-family:Arial'>Davis</span></font></st1:City></st1:place><font
size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'> said a
decision would be made at a later time. In the meantime, Shell will continue to
operate the <st1:place w:st="on"><st1:City w:st="on">Sarnia</st1:City></st1:place>
refinery at its current capacity. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>In
November 2006, Shell Canada announced its plan to study the viability of
constructing and operating a new heavy oil refinery near <st1:place w:st="on"><st1:City
w:st="on">Sarnia</st1:City></st1:place> as an expansion of Shell's existing
Sarnia Manufacturing Centre. <o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Contact
Gitte Laasby at 648-2183 or <a href="mailto:glaasby@post-trib.com">glaasby@post-trib.com</a>.
<o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Contact
Christin Nance Lazerus at 648-3086 or <a href="mailto:cnance@post-trib.com">cnance@post-trib.com</a>.
<o:p></o:p></span></font></p>
<p><font size=1 face=Arial><span style='font-size:9.0pt;font-family:Arial'>Comment
on this story at www.post-trib.com. <o:p></o:p></span></font></p>
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