Canadian Natural Continues Progress of the Horizon Oil Sands Project
"Canadian Natural achieved 9% progress on the Horizon Project during the third quarter of 2007 and is still positioned to meet an overall 90% plus completion by year end," commented Real Doucet, Sr. Vice President of Oil Sands. "With overall engineering and procurement substantially complete and construction at 76% complete, we remain on track for first oil in the third quarter of 2008."
"Progress in the third quarter of 2007 did slip against our baseline as a result of distractions resulting from Alberta-wide labor negotiations that occurred throughout the summer. These challenges appear to be behind the Horizon Project, and our contractors current workforce of 8,700 people are focused on completing as much work as possible before winter."
During the quarter, the raw water pond was completed using our the company's mining operations workforce. In addition, pre-commissioning work has been initiated in the areas of utilities and offsites and bitumen production with significant hydro testing targeted for completion before winter conditions set in.
Commissioning and start-up plans have been reviewed and confirmed by external industry experts and have assisted in optimizing our processes. During the fourth quarter of 2007 Canadian Natural will carry out a formalized detailed risk assessment of its commissioning and start-up schedule to identify areas of exposure and ensure adequate contingency plans are developed. Also, in the fourth quarter of 2007, several plants are targeted to reach mechanical completion and we will begin the transition to commissioning and start-up. Training programs are in place, and in anticipation of turnover, operations have commenced the review of systems in certain plants.
Previous decisions to defer several contracts and delay certain projects to capture cost reduction opportunities has caused overlap between some construction projects on the site and has resulted in an increase in the company's peak project manpower requirements. Canadian Natural's supporting camp and transportation infrastructure has been successfully expanded to accommodate the higher peak in manpower to ensure workers are adequately accommodated.
As a result some work has been pushed into the more challenging winter months, resulting in a modest increase in the forecast completion cost for the Horizon Project. The company's current Horizon Project completion cost forecast has been increased from the 5% to 12% range provided in its first quarter 2007 Horizon Project Update to an 8% to 14% range over the original $6.8 billion estimate.
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