Shell Canada backs out of Pierre River oilsands project

Shell has decided not to proceed with its Pierre River oilsands mine north of Fort McMurray, Alta., it announced Monday.

Shell Canada president Lorraine Mitchelmore announced it had withdrawn its application for a new 200,000 barrel-per-day heavy oil mine, first filed with regulators in 2007.

With the collapse of oil prices, the project is not currently a priority, she said.

"Our current focus is on making our heavy oil business as economically and environmentally competitive as possible. We will continue to hold the leases and can reapply in the future when the time is right,"Mitchelmore said in a press statement.

The project is in preliminary stages and its cancellation should not have a big impact on jobs, the statement said.

Companies throughout the oilpatch are trimming spending plans and reducing workforces in response to the falling price of oil, which has declined by half since last summer. TheWTIcontract was priced at less than $50 today as the amount of production available exceeds demand for oil worldwide.

Last month, oilsands giant Cenovus Energy Inc.took $700 million out of its 2015 budget, released at the end of last year.

Canadian Natural Resources Ltd. reduced its 2015 budget by $2.4 billion, while Suncor Energy Inc. cut its workforce by 1,000 and its budget by $1 billion.