SPP/CPM AND SUNCOR TAKE PRELIMINARY STEPS ON STUART STAGE 2

At an on-site ceremony in Gladstone, Australia, in October, the joint-venture partners in the Stuart Oil Shale Project, Southern Pacific Petroleum N.L. and Central Pacific Minerals N.L. (SPP/CPM) and Suncor Energy Inc., announced they were to proceed with the first steps involved in assessing Stage 2 of the project.

SPP/CPM chairman I. McFarlane said the companies would prepare an Initial Advice Statement and undertake an Impact Assessment Study which would include a comprehensive review of the social, environmental and economic impacts of the project.

McFarlane, who was joined by Suncor Energy chief executive officer, R. George, said while proceeding with the Impact Assessment Study Process showed their confidence in the Stuart Project, they had not yet reached the point where a decision to proceed could be made.

SPP/CPM and Suncor Energy are currently constructing Stage 1 ($250 million) which is on budget, on schedule at 85 percent complete, and due for mechanical completion in the second quarter of 1999 followed by commissioning and testing with operational oil production expected at the end of 1999 as planned.

Stuart Stage 2 is a scaled up version of the technology piloted in Stage 1. It is expected to produce 15,000 barrels of oil per day bringing the combined production to about 20,000 barrels per day by 2003. Should Stage 2 proceed, it would cost more than $350 million.

SPP/CPM and Suncor Energy are co-owners of the Stuart Oil Shale Project; Suncor Energy (Management) Pty. Ltd. is responsible for operating Stuart Stage 1, and SPP/CPM are responsible for developing future stages of the Stuart deposit.

The joint venture is going ahead with Stage 2 studies even before Stage 1 comes on stream because the regulatory process can take 12 to 18 months.



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