Change of guard at Syncrude Canada signals cost cutting, says new CEO

Gary Park

Petroleum News Calgary correspondent

Syncrude Canada, operator of the world’s largest synthetic crude plant, faces a more rigorous financial future under a new chief executive officer.

Charles Ruigrok, who takes over the reins Dec. 15 when Eric Newell retires, said the consortium needs to be “relentless in our pursuit of opportunities to try to keep a lid on the kind of cost pressures that we see in this very busy environment ...”

Currently vice president of oil sands development and research at Imperial Oil, Syncrude’s second largest stakeholder at 25 percent, Ruigrok has indicated his unhappiness in the past about Syncrude’s spending patterns. “We’ve always had concerns over the cost pressures that the major oil sands projects have seen ... and it also translated into pressure on base operating costs,” he told a conference call.

Those challenges have been heightened this year with unscheduled maintenance expected to drop 2003 production to 78-80 million barrels from a forecast 81-83 million, while bumping operating costs to between C$19.25-$19.75 per barrel from the expected C$18.50-$19. A year ago, Ruigrok said he hoped costs could be trimmed to the C$11-$12 range. However, the full maintenance run this year should translate into higher output in 2004 and lower per-barrel costs.