Finance and Operations

Performance Overview

  • Shipments of 104.9 million barrels
  • Operating expenditures of $42.24 per barrel
  • $7.9 billion in capital projects underway to improve operations and environmental performance
  • Mildred Lake Extension (MLX) Project announced; stakeholder consultation begins
  • Ranked among top R&D spenders in Canada

Research and Development Expenditures

Major Projects Progress

There are four major projects* now underway at our sites:

  • Construction of the two new mine trains at Mildred Lake is estimated at $4.2 billion, with start-up scheduled for late 2014. These trains will incorporate new wet crushing technology which will increase production capacity and bitumen recovery, and reduce maintenance requirements.
  • Relocation and start-up of two mine trains at the Aurora North mine were complete ahead of schedule and under budget, as of the third quarter of 2013.
  • Construction of a $1.9 billion centrifuge plant began in 2012. It will dewater fluid fine tails (FFT) and produce a clay-rich soil material that can be used in the reclamation of former mine areas. Start-up is scheduled for the first half of 2015.
  • Construction of a $800 million composite tails (CT) plant at our Aurora North mine has been completed on-schedule and under budget. This plant will dewater and process FFT into reclamation-ready material.

* Status of projects as of Q4 2013.

Sulphur Management

Sulphur, a natural constituent of the oil sands resource, is removed in Syncrude’s bitumen upgrading process. It is by law considered a natural resource that must be managed according to provincial guidelines. Syncrude’s Joint Venture owners take their proportional share of all of Syncrude’s daily liquid sulphur production and market it independently. Sulphur is only stored in blocks during emergency or maintenance situations.

To reduce the liability associated with current sulphur inventories, Syncrude owners are exploring options to make the stockpile available to the market.

Future Development Plans

Syncrude is focused on improving capacity utilization for the next number of years. Our owners believe this approach is the best opportunity to add value in the near term.

In 2012, we announced our intention to develop the Mildred Lake Extension (MLX)Project to sustain bitumen production levels at our Mildred Lake operation upon depletion of the currently approved mining areas. Initial project scoping is underway and we anticipate filing a formal regulatory application in late 2014. Pending stakeholder, regulatory and final Joint Venture owner approvals, construction is expected to commence towards the end of this decade for start-up by 2023.

While previous preliminary plans had been to expand production capability by developing the Aurora South Mine leases, these will likely remain undeveloped until the early 2020s or later depending on progression of the MLX Project.

Near-term capital spending through 2014 will focus on mine train relocations and replacements at both the Mildred Lake and Aurora North sites, as well as construction of the tailings management facilities.

Expansion projects require unanimous approval by the Syncrude Joint Venture participants. The most recent information about Syncrude’s forward-looking plans is available from Canadian Oil Sands Limited.

Financial and Operating Summary

 
2008 2009 2010 2011 2012
Total crude oil production1
Millons of barrels per year
         
105.8 102.2 107.0 105.2 104.9
Thousands of barrels per day
         
289 280 293 288 286
Millions of cubic metres per year
         
16.821 16.249 17.012 16.694 16.678
Realized SCO selling price ($ per barrel)4
         
107.47 69.47 80.53 101.20 91.90
Total operating costs2
Millions of dollars
         
3,749.6 3,645.8 4,040.2 4,344.4 4,428.7
$ per barrel of production
         
35.44 35.69 37.74 41.28 42.24
Capital expenditures3 (millions of dollars)
         
765.9 1198.1 1376.7 1477.4 2501.7
Research and development expenditures (millions of dollars)
         
50.3 56.2 74.0 92.0 158.2
Revenues4 (millions of dollars)
         
11,347 7,118 8,655 10,708 9,706
Retained earnings5
         
0 0 0 0 0
Bitumen produced (million barrels)
         
121.3 120.0 126.3 125.2 121.2
Bitumen recovery (%)
         
90.3 90.8 90.7 91.7 91.6
Upgrading yield (%)
         
85.9 86.9 85.8 85.7 86.3
Environmental fines ($ millions)
         
0 0 3.2 0 0
Environmental protection orders (#)
         
0 0 0 0 0
  1. Production is Syncrude crude oil shipped
  2. Operating costs are costs related to the mining of oil sands, the extraction of bitumen into Syncrude crude oil, and maintenance of facilities; they also include administration costs, start-up costs, research, and purchased energy. There is no generally accepting accounting definition as to what constitutes "Operating Costs".
  3. Capital expenditures includes development expense related to sustaining capital and growth capital projects. The accounting treatment of certain costs may vary significantly between different producers; some producers may elect to capitalize or defer and amortize certain expenditures that are recorded as an expense by other producers, and may segment “Corporate” costs.
  4. Production of Syncrude Crude Oil becomes the property of Syncrude’s Joint Venture owners at point of departure from the Syncrude plant. As the operator, Syncrude does not collect revenue from the sale of crude oil or other products. Selling price and revenue reported here reflects only that of Canadian Oil Sands Limited, a 36.74% owner, grossed up for 100% Syncrude, and is solely meant to provide an indication of performance.
  5. Syncrude’s annual operating and capital expenditures are funded pro-rata by Syncrude’s Joint Venture owners. 
  6. Syncrude paid a $5,000 administrative penalty to the Government of Alberta for failure to sufficiently report the release of emissions due to an isolated, on-site sour water leak in July 2010. 

Note: These figures may differ from those reported by any of the Joint Venture participants due to differences in reporting conventions and methodology