Teck Resources is considering a full shutdown of the Fort Hills project to cut costs.
Teck Resources Ltd is reportedly considering a full shutdown of the Fort Hills mine in the Alberta Oilsands to cut costs after local prices hit record lows stemming from the Coronavirus & a continued price war between Russia and Saudi Arabia.
Teck Chief Executive Officer Don Lindsay said during an investor presentation that "The partners continue to further analyze capital- and operating-cost reduction opportunities, and, as you might imagine, we’re certainly looking at the potential shutdown of the operation.”
He continued "However, more work needs to be done and we will update you as work progresses" and that "The primary focus is safety related to COVID-19 and from preventing the virus from getting into the work camp".
Suncor Energy Inc., another partner in the venture, announced last week one of the mine’s two production lines would be closed to preserve cash.
However, a reprsentative for Suncor also said that "At this time, we have made no decision to move to a full shutdown" and that the partners had not discussed a full shutdown which would "require unanimous consent of the shareholders".
Only employees with essential positions are allowed on site as the two companies try and limit the spread of the virus.
Oilsands shutdowns could reach 500,000 barrels per day, with the bulk of operational shut-ins starting in May, Matt Murphy, a director of research at Tudor Pickering Holt & Co., said by phone to Bloomerberg.