(Updates with closing share price in final paragraph.)
Dec. 8 (Bloomberg) -- Canada’s Natural Resources Minister Joe Oliver said Total SA and Suncor Energy Inc. can build the C$9 billion ($8.8 billion) Joslyn oil-sands project after it passed an environmental review.
Total last year bought stakes in Alberta oil-sands developments from Suncor, forming a “strategic alliance” for the Fort Hills, Joslyn and Voyageur projects. Oliver announced the approval in Ottawa today.
“The environmental assessment has been completed,” Oliver said. “Construction can proceed.”
Total, which is based in Paris, said last year it would pay C$1.75 billion for 19.2 percent of Calgary-based Suncor’s stake in the Fort Hills project. It has a 38.3 percent interest in Joslyn as well as 49 percent in Suncor’s Voyageur upgrader development near Fort McMurray. The plant will be able to process 200,000 barrels a day of products including bitumen from Total’s Fort Hills and Joslyn output.
“I’m very happy to get the necessary approvals to move forward,” Jean-Michel Gires, chief executive officer of Total’s Canadian operations, said in a conference call today. Production should start in 2018, he said.
Oliver said he wants faster approvals of major projects, saying the process should take about two years instead of the six years needed for the Joslyn development.
“We need to put an end to unreasonable delays,” Oliver told reporters. “Definitive timelines from beginning to end of the regulatory process are needed to improve the timeliness and predictability of the regulatory environment and to support investment and planning decisions.”
The approval comes in the same week Canada said it won’t enter into new commitments under the Kyoto climate-change treaty. Canada may save as much as $6.7 billion by exiting the global agreement and not paying for offset credits.
“Before boasting about the capital investments of oil- sands expansion, Canada should be fulfilling its duties to ensure a new monitoring system is implemented, greenhouse gas emissions are regulated and species at risk, such as the woodland caribou, are protected,” said Jennifer Grant, oil- sands program director at the Pembina Institute in Calgary, a research group focused on environmental and energy issues.
Alberta’s oil sands contain the biggest crude reserves outside of Saudi Arabia, according to government estimates.
Suncor fell 3.2 percent to C$29.54 at the close in Toronto. Total declined 2.3 percent to 37.91 euros at the close in Paris.
--With assistance from Jeremy van Loon in Calgary. Editors: Paul Badertscher, Charles Siler
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