Canadian Oil Sands 2008 Budget Includes 115 Million Barrels
Canadian Oil Sands Trust's annual 2008 Syncrude production is estimated to total 115 million barrels with a range of 110 to 120 million barrels (net to the Trust, equivalent to 42 million barrels with a range of 40 to 44 million barrels.
The single point production estimate incorporates Syncrude's 2008 maintenance program, an allowance for unplanned outages, and recognition that Syncrude is still working to establish reliable operations from the Stage 3 facilities.
During 2008, Syncrude plans to perform turnarounds of Coker 8-1 (second quarter) and Coker 8-2 (third quarter) as well as associated maintenance work on other units.
The production range reflects the upside and downside in volumes Syncrude could experience, depending on operational reliability.
"Our production outlook for 2008 is substantially less than the Syncrude facility's design capacity of 128 million barrels annually due to a higher than average maintenance program, which includes work on two of our three cokers," said Marcel Coutu, Canadian Oil Sands' President and Chief Executive Officer. "Syncrude and the Imperial/ExxonMobil team are making progress in identifying and implementing reliability improvements to enable Syncrude to achieve Stage 3 design capacity. We are beginning to see some early benefits in operating efficiencies and with the transition in 2007 to the higher SSP product quality; however, we continue to expect that it will take another year or two before realizing the greater payoffs of design production levels and improved costs."
Changes in certain factors and market conditions could potentially impact this Budget. In particular, cash from operating activities is highly sensitive to crude oil prices; every US$1.00 per barrel change in the WTI crude oil price impacts cash from operating activities by $0.06 per Trust unit. At the current time, the estimates do not anticipate material increases in 2008 capital or operating costs as a result of the operational incident in December 2007. Repairs in regards to this incident are in progress and further information may be issued when known. A sensitivity analysis of the key factors affecting the Trust's Budget is provided in its December 14, 2007 Guidance Document.
The Syncrude joint venture owners have established a Growth Development Planning and Major Projects Committee to pursue Syncrude's growth plans. The committee is chaired by Canadian Oil Sands and primarily staffed by Imperial/ExxonMobil. The growth plans include a Stage 3 debottleneck and Stage 4 expansion, which are ultimately expected to increase production to about 500,000 barrels per day, gross to Syncrude, late in the next decade.
Preliminary design work on these expansions will commence in 2008 and the associated costs are included in our budget as non-production costs. Syncrude has not yet identified a capital budget for the future costs associated with its expansion plans, and the plans will require approval by the Syncrude owners.
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