Report: Canada Oil Sands Expansion Plans Need High Oil Prices. By Jeffrey Jones, Reuters, October 30, 2008. "New Canadian oil sands projects require crude prices of as much as 36 percent above today's levels to earn an acceptable return on investment because development costs are still high, an energy think tank said on Thursday. In a new report, the Canadian Energy Research Institute said new projects in the Alberta oil sands require benchmark oil prices of C$83 to C$110 ($68-$90) a barrel to earn a 10 percent rate of return, depending on the production method employed. U.S. oil closed down 2 percent on Thursday at $65.96 a barrel, well below its July record above $147. The study shows why developers in recent weeks have announced a series of project deferrals as oil prices wither due to the world economic crisis. Royal Dutch Shell on Thursday became the latest company to delay a project, saying it was holding off on deciding whether to go ahead with an expansion at its Athabasca oil sands project until industry costs ease. Others delaying parts of projects, or considering it, include Petro-Canada, Suncor Energy, and Nexen."
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