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Shell to cut costs at Canadian operations to remain competitive

Oil is refined at Royal Dutch Shell PLC’s Albian Sands mine near Fort McMurray, Alberta, Canada, on Tuesday, Aug. 13, 2013.

Brent Lewin/Bloomberg

Royal Dutch Shell PLC plans to lower costs at its Canadian operations to ensure the business remains competitive with other regions.

Shell, whose Canadian operations include service stations and oil-sands mines, plans to boost efficiencies at warehouses, using modular components for projects and keeping machines operating more of the time, Lorraine Mitchelmore, who heads operations in the country, said in a briefing Wednesday in Calgary. She declined to provide a target for the cuts.

"Canada is a multi-decade opportunity, but we have to focus on competitiveness, costs and productivity," she said.

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Shell is looking to ensure that its drilling operations can remain profitable at "low" oil prices, she said. The company expects oil to stay within a range of between $70 (U.S.) and $110 a barrel, she added.

Shell operates service stations in Canada along with its oil sands business and drilling operations in western and eastern Canada. The company is also developing the first carbon capture and storage project from bitumen extraction, helped by an investment from the province of Alberta.

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