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Exxon Mobil Corp
Exxon Mobil Corp. (XOM), the world’s largest company by market value, expects to begin bitumen production at its Kearl oil sands project in Alberta before the end of March after weather delays, a company executive said.
Exxon, based in Irving, Texas, is stockpiling ore and preparing to introduce solvent to the processing plant, David Rosenthal, vice president of investor relations, said during a conference call today. Initial production will be about 37,000 barrels a day, increasing to 110,000 by the end of 2013.
“The weather situation was a major factor in the startup moving from what we had originally said by the end of the year to the first quarter,” he said. “Weather came earlier than normal, and then it has just been brutally cold up there. And so we’ve had to adjust accordingly.”
Lagging infrastructure has created a glut of oil in Alberta that pushed prices to a record discount to U.S. crude in December. Western Canada Select oil in Alberta was priced at a $42.50-a-barrel discount to West Texas Intermediate in Cushing, Oklahoma, on Dec. 14, according to data compiled by Bloomberg. It was at $31.50 below the U.S. benchmark at 12:13 p.m. New York time today.
Exxon can run all 110,000 barrels of Kearl production in its own refineries, Rosenthal said.
“We may elect to put some into third-party refineries, but we do not have an issue in terms of logistics moving those barrels outside of the Kearl project and into the market,” he said.
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