Ivanhoe Energy stops oil sands work as it awaits new rules

CALGARY, Alberta, March 17 Mon Mar 17, 2014 5:42pm EDT

CALGARY, Alberta, March 17 (Reuters) - Ivanhoe Energy Inc said on Monday it is suspending work on its 20,000 barrel-per-day Tamarack oil sands project while it awaits updated regulations from the province of Alberta on thermal oil sands applications.

Ivanhoe said it will limit spending on the project to essential items while it awaits the rules from the Alberta Energy Regulator on shallow steam-assisted gravity drainage (SAGD) oil sands projects.

Such projects use twin wells, with one pumping steam to liquefy the tar-like bitumen trapped in sand while the other is used to pump it to the surface.

Ivanhoe first applied for regulatory approval in November 2010 for the project, which has been delayed as it resolves concerns from local stakeholders. But the company said it needs the regulator to wrap up a review of its rules for SAGD projects before it can proceed with Tamarack.

"We support (the regulator's) need to engage with more stakeholders and come up with a long-term policy," said Hilary McMeekin, a spokeswoman for the company. "Until then we're just not in a position to invest any more in Tamarack."

Ivanhoe shares closed unchanged at 70 Canadian cents on the Toronto Stock Exchange on Monday.

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