Canadian Natural Issues Horizon Update

Canadian Natural Resources Limited on Thursday provided its regular quarterly update on the Horizon Oil Sands Project.

"We had a very productive fourth quarter on the Horizon Project and a very successful year" commented Real Doucet, Sr. Vice-President, Oil Sands. "Our project team continues to safely deliver as we remain ahead of our project schedule at 57% complete versus our plan of 55% with capital spending levels as expected."

He continued, "Canadian Natural's ability to track ahead of schedule and control costs is a reflection of our well defined and well thought-out execution strategy. This strategy continues to pay dividends as we build the Horizon Project in a very heated and highly inflationary environment.

"Our labor strategy of 'managed open site' combined with fly-in / fly-out, continues to demonstrate success as we have expanded our available labor force to across Canada, bringing workers in from coast to coast. We currently have up to 55 flights per week into our site from all across Canada and continue to assess new locations and available labor forces. Workforce numbers at site have met the Project labor demand with 4,000 trades persons working on site in December.

"In 2007 we anticipate mechanical completion in several plants within the project and will continue to recruit and build the operating and maintenance teams for the new facilities. Planning for an effective start-up and commissioning is well advanced enabling us to identify 'pinch points' early and take action to minimize potential impacts that we foresee.

"In all, total costs for Phase 1 construction are still anticipated to be not materially different than the original target cost of $6.8 billion. Further, we remain on track for final commissioning during the third quarter of 2008. With respect to future expansions, we have started consolidating results from the Phase 2 Engineering Design Specification and have identified a number of potential options for Phases 2/3 execution in the current high cost environment. We will fully evaluate these options and provide further updates as we move through that process."

A summary of the project status is as follows:



                                     September 30,  December 31,  March 31,
                                     -------------  ------------  ---------
                                         2006          2006         2007
                                         ----          ----         ----
                                        Actual     Actual  Plan     Plan
                                        ------     ------  ----     ----
Phase 1 - Work progress (cumulative)      47%        57%    55%      65%
Phase 1 - Construction capital
 spending (cumulative)                    48%        59%    58%      68%

Accomplished During the Fourth Quarter of 2006

Detailed Engineering

  • Overall detailed engineering 94% complete and is substantially completed in most areas.


  • Overall progress of 84% complete. Most major equipment is purchased and on site.
  • Awarded over $5.1 billion in purchase orders and contracts to date.
  • Awarded General Mechanical Contracts for Hydrotreater and Cogeneration areas.


  • Delivered an additional 327 oversized loads to site for a total of 973 loads, representing approximately 59% of the Phase 1 total to be shipped.


  • Overall progress 42% complete.
  • Set 333 main piperack modules.
  • Exceeded the 2006 High Voltage (35kV) cable pull plan by 15% (30,500 meters), ensuring that all critical pulls have been completed.
  • 5 of 6 Modular Substations have been installed and re-instated at site, with High Voltage cable terminations ongoing.
  • Mine overburden removal has moved 25 million bank cubic meters, which is approx 35% complete and 4% ahead of target.
  • Ore Preparation Area completed construction of the Mechanically Stabilized Earth Shear Wall and transported the 800 tonne module assemblies onto their foundations.
  • Bitumen Production Administration Building was completed and occupied.
  • Camp 3 was completed and ready for occupancy.
  • Commenced Flotation Cell and Pump Box installation in Extraction.
  • Began work on R1 & R2 pump house for piping corridors.
  • Commenced installation of large bore piping in Coker/DRU
  • Milestones for the First Quarter of 2007

    • Complete Primary Separation Cell Piping in Extraction.
    • Ready High Pressure Natural gas piping for Commissioning.
    • Initiate module setting in Hydrotreater area.
    • Complete Cooling Tower erection.
    • Complete installation of the last remaining 35kV substation.

    Canadian Natural is a senior oil and natural gas production company, with continuing operations in its core areas located in Western Canada, the U.K. portion of the North Sea and Offshore West Africa.


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