ExxonMobil says Sable gas production down by 35%

There are morediscouraging signs fromNova Scotia'sdepletingSableoffshore natural gas project as areport from majority ownerExxonMobil concluded natural gas productionat Sableis downby 35 per centsince planned maintenance two months ago.

Thecompany said it does not know when full productionwill resume.

"Sable is producingat about 65 per centof normal levels," Merle MacIsaac, an ExxonMobil spokesperson,saidin an emailed statement to CBC News.

"During our planned maintenance in September we identified some additional work to be done before returning to full production. The timetable for returning to full production has not yet been determined."

The production slowdownwasrevealed this week indocuments filed byNova Scotia Power.

The electrical utility told regulators on Tuesday that it was having difficultysecuring a supply of natural gas because of productioncuts at Sable and the failureof EnCana'sDeep Panuke projectto come on stream this year, as expected.

"This has caused significant cuts to Nova ScotiaPowerscontracted gas. Both the delay at Deep Panuke and reducedproduction at Sable have resulted in increased costs as Nova ScotiaPower hassourced other fuel to replace the contracted gas," the utility stated.

Thelifespan of the Sable natural gas fields has been the subjectof speculationasoutput from its five offshore wellheads has gradually lessened in recent years. When it went into productionin late 1999, a 25-year lifespan was projected.

In 2010, Exxon announcedit would wind down Sable.

The Nova Scotia government has also seen its royalties plummet. Projected royalties for 2012 are estimated to be about$27 million,down from $110 millionin 2011,according to the provincial budget released in April.