CALGARY - Imperial Oil Ltd.'s (TSX:IMO) board is set to make a decision early next year on whether to go ahead with its controversial $8-billion Kearl oilsands mine, which is expected to start up in 2012 rather than its original target date of 2010, a company spokesman said.
The board was expected to give its final go-ahead as early the fourth quarter this year, but it is more likely that decision will be made in early 2009, Gordon Wong said.
The last official estimated startup date of 2010 was set in 2005, when Imperial first filed its regulatory approvals for Kearl, Wong said. But now 2012 seems to be more realistic.
"That number is based on work that was probably done about four years ago now. The cost environment has changed since then," he said.
Kearl was the subject of much legal wrangling between the company, the federal government and environmental groups earlier this year.
As part of an affidavit filed in a court case this spring, in which Imperial appealed a decision by the Department of Fisheries and Oceans to revoke a key permit it needed to work on the site, the company produced a more up-to-date cost and schedule estimate.
"Based on information we had at that time, which is a little more up to date than the stuff we filed three years ago, the project folks estimated that it was likely that the project startup was not going to happen in 2010, given that we're now in 2008 and we haven't made an appropriations decision yet."
The 2012 figure is a "best guess" estimate for now, with an official figure expected early next year.
The permit was re-instated in June, meaning the project was not thrown off track, as was feared.
The Kearl site, north of Fort McMurray, Alta., is estimated to contain 4.6 billion barrels of recoverable oil. Its initial phase will be 100,000 barrels a day, eventually ramping up to 300,000.
Environmental groups had argued in court that the project would destroy huge tracts of boreal forest and muskeg in Northern Alberta.
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