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“Joslyn is facing the same challenge that most of the industry worldwide is in the sense that the costs are continuing to inflate when the oil price and specifically the netbacks from the oil sands are remaining stable at best,” he said. That is squeezing margins and “cannot be sustainable in the long-term.”

Joslyn, located about 65 kilometres north of Fort McMurray, was approved in December 2011 after years of review. Total purchased the leases in 2005, but the company and its partners have struggled to make the project economic.

Total also owns a 39.2% slice of the Suncor-led Fort Hills project, a $13.5-billion oil sands mine under development. Suncor chief executive Steve Williams said last year Joslyn’s economics were “moving backwards,” while Total mulled upsizing the project by as much as 50% in a bid to improve the cost structure.

Mr. Goffart said the decision to suspend Joslyn was made unanimously among the partners.

The company also operates a steam-driven oil sands project called Surmont as part of a joint venture with ConocoPhillips Co. with production capacity of 27,000 barrels per day. A plan to raise output to 136,000-barrels by 2015 remains intact, Mr. Goffart said.

He would not say how much the company has spent on Joslyn to date or under what conditions the project might be revived. However, he said new mining ventures in the oil sands are challenged on a number of fronts, not least capital intensity.