Oil Production In Canada's Tar Sands To Cost More

Toronto, Canada (AHN) - Oil players like Royal Dutch Shell and Exxon Mobil may have to spend more- between $2 and $13 a barrel- to exploit Canada's tar sands.

The increase in costs follows a requirement by the government for oil producers to store carbon dioxide underground, Bloomberg reported yesterday.

The report said the anti-climate change initiative the additional cost would have to be passed on to consumers through higher energy bills.

Bloomberg reported that global warming has been blamed to the accumulation of carbon in the atmosphere because of burning fossil fuels.

In a related development, The Times reported on Friday that 11 fund managers managing the $10-billion assets of BP and who collectively own $40 million of its stock, lashed out at the oil company's move start extracting oil from Canadian tar sands last year as "deeply disappointing" and represented a "disturbing step backwards" for the company.

The report said the fund managers issued a joint declaration at BP's annual meeting in London last week noting the environmental damage caused by extracting oil from the bitumen-rich sands.

Canada's tar sands are reputed to be the biggest deposit outside of Saudi Arabia.