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ENERGY: Rising labour, material costs holding back oil sands investments
        (AlbertaIndex, August 20, Wednesday) --- Labour shortages, regulatory hurdles, a lack of clarity over government climate change policies as well as soaring materials and engineering costs are slowing down investment into developing oil sands deposits in Canada’s Alberta province.
        The industry is complaining that the growing list of negatives is preventing them from increasing their investments to take full advantage of record-high oil prices.

As a result, the Canadian Association of Petroleum Producers (CAPP) has reduced its projection for Alberta’s oilsands output projections to 4.8 million b/d by 2020, instead of 5.3 million b/d.

Meanwhile, spending on oil sands projects at Fort McMurray in northern Alberta has risen steadily over the past four years, from C$10.4 billion in 2005 to C$14.3 billion in 2006 and $17 billion last year. (US$1 = C$1.06).

CAPP predicts the industry will invest a record C$20 billion this year, but this could stay flat next year.

Three major new projects are expected to start up in the second half of 2008 in Alberta including Canadian Natural Resources' Horizon mine, OPTI/Nexen’s Long Lake thermal project and Suncor’s Fort McMurray upgrader expansion.


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