Royal Dutch Shell (LON:RDSB, LON:RDSA) has downed tools at its Alberta oil sands development project.
The Carmon Creek project, which would bring online 80,000 barrels of oil production per day, was sanctioned back in October 2013 but amid lower oil prices and uncertainties over market access the work has now halted.
Camron Creek “does not rank” in the Shell portfolio at this time, the oil major said.
Ben van Beurden, Shell chief executive, told investors that the current oil market is forcing “tough choices” upon the company.
“We are making changes to Shell’s portfolio mix by reviewing our longer-term upstream options world-wide, and managing affordability and exposure in the current world of lower oil prices,” he said in a statement.
The Financial Times reports that the decision to halt Camron Creek will see Shell take a US$2bn write down and will see 418mln barrels of oil reserves – or 4% of its worldwide inventory – wiped off.
Shell highlighted a lack of infrastructure to move Canadian crude oil to global markets.
It comes amid a series of delays to the Keystone XL pipeline project which had promised to connect Canadian fields to America’s key oil hubs, ultimately those on the Gulf Coast. The controversial project is currently stuck in the permitting process.