Oil takes spotlight at Canadian Natural

Gary Park

Petroleum News Calgary correspondent

Canadian Natural Resources, Canada’s second largest natural gas producer after EnCana, is likely to make its biggest waves this year in the oil sector.

The Calgary-based independent plans to spend C$2.55 billion on the conventional side this year, up from its original C$2.29 billion following its recent C$467 million acquisition of heavy oil producer Petrovera Resources.

That has boosted its forecast oil output for the year to 283,000 barrels per day from 263,000 bpd, with gas unchanged at 1.32-1.395 billion cubic feet per day.

Major oil developments in the works for 2004 are:

• A decision early in the fourth quarter to proceed with the C$8.5 billion Horizon oil sands project, assuming final regulatory approval. Company spending on Horizon this year could reach C$400 million.

• Spending of C$16 million to increase shipments of Synbit, a blend of synthetic crude and bitumen that is being offered to U.S. Midwest refineries, to as much as 60,000 bpd from 34,000 bpd.

• An enhanced recovery project at the Pelican Lake heavy oil area of northeastern Alberta that should add 280 million barrels of recoverable reserves.

• At Primrose in northeastern Alberta, Canadian Natural has completed facilities at two pads drilled in 2003 and expects production of 12,000 bpd by mid-2004. Two more pads are currently being drilled and plans are under way for a 25,000 bpd expansion at a cost of C$250 million.

The company is targeting a 5 percent increase in gas production, boosted by better-than-expected results from a shallow-gas program in the Helmut area of British Columbia.

Chief Operating Officer Steve Laut said wells are averaging 700,000 cubic feet a day, compared with expectations of 400,000 cubic feet and 70 wells are scheduled for the first quarter.