Canadian Natural Resources Says Horizon Oil Sands Project on Track

Canadian Natural Resources Limited says the Horizon Oil Sands Project remains on track. Real Doucet, Senior Vice-President, Oil Sands says: "To date we have achieved our critical milestones and advanced other key activities, positioning the project to take advantage of identified market opportunities in 2006 to move the project forward. Unseasonably warmer and dryer weather during the fourth quarter allowed us to overcome the excessive rainfall experienced in the summer months allowing our overall construction progress to move ahead of schedule. Skilled tradespeople on site peaked at approximately 1,700 in late 2005, as we continue to meet our labour demands. Our critical equipment, separation cells, coke drums and reactors are being fabricated on site or are in transit as per plan. Our engineering deliverables are supporting the construction schedules and we are seeing the benefits of the emphasis on front end engineering. We awarded just over $3.8 billion in contracts by the end of 2005, slightly below our $4 billion target as we decided not to award some non-critical path contracts and repackage the work to capture new opportunities in the contractor workplace. This flexibility is one of the many benefits of our well thought out execution plan as our team continually works contingency plans to capitalize on opportunities and mitigate the challenges associated with a project of this size."
                                   December 31, 2005  March 31, 2006
                                   -----------------  --------------
                                      Actual    Plan            Plan
                                      ------    ----            ----
Phase 1 - Work progress
 (cumulative)                             19%     16%             22%
Phase 1 - Construction capital
 spending (cumulative)                    19%     20%             29%

Accomplished During the Fourth Quarter

Detailed Engineering

- All project areas met their staffing requirements and overall progress for detailed engineering is on schedule.

- 3-D engineering design models are well advanced in most areas with some plant areas at the 90% model review stage.

- Hazard and Operability reviews were completed and findings have been incorporated into the plant designs.


- Total procurement progress is at C$3.8 billion in awarded contracts and purchase orders, with a further C$600 million in various stages of the tender process.

- Key purchase orders were awarded for various mechanical equipment (pumps and valves), fabricated pipe and steel.

- Several contracts were awarded for piling, foundations and miscellaneous earthworks.


- Module fabrication and assembly maintained schedule.

- Module transportation remains on schedule, in an environment of key transportation restrictions. A total of 88 oversized loads were transported to site by year end.


- As a direct result of Management's strong endorsement of safety awareness, on-site safety statistics and performance improved for the eleventh month in a row and are well below the Company's targets, benchmarked against other projects in the area.

- Mine overburden removal is 10% ahead of plan, with a total of 6.7 million bank cubic meters of material removed.

- Critical path underground piping was completed, prior to winter weather conditions.

- Completed expansion of Camp 1 to 2,000 people from 1,500.

- Progress on the second of three (2,000 person) camps is 72% complete.

- Coker foundations are complete and ready for Coke Drum installation by mid 2006.

- Earthwork for the raw water and recycle water pond systems commenced as scheduled.

- Naphtha Reactor, fabricated in India, arrived in the Ft McMurray staging area as scheduled.

- Extraction Separation Cell foundations were completed.

- Erection of the Separation Cells was started with over 80% of required materials on site.

- The Shop maintenance building was completed and ready for occupancy and the turnover of the Emergency Medical Services buildings to construction unit was completed. Turnover of the Fire Hall was deferred until February 1.

First Quarter 2006 Milestones

- Detailed engineering targeted to have completed at least 60% model reviews in all areas.

- Target the total awarded contracts and purchase orders to achieve C$4 billion.

- Complete transport of all four Coke Drums to plant site.

- Complete transport of Naphtha Reactor to site from staging area.

- Delivery of oversized loads to site targeted to reach 250.


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