Showing posts with label invest. Show all posts
Showing posts with label invest. Show all posts

Monday, December 3, 2012

GAS Canadian Oil Sands to invest C$1.3bn in Syncrude operations next year

Canadian Oil Sands, which has the largest stake in the Syncrude Canada oil sands project in northern Alberta, expects booming US light crude production to keep on pressuring prices for the synthetic oil that Syncrude pumps out in large volumes, its CEO Marcel Coutu said on Friday.

Canadian Oil Sands, which announced a C$1.3-billion 2013 capital spending budget late Thursday, expects its product to fetch $5 a barrel less on average than the US oil benchmark, West Texas Intermediate (WTI), next year. The differential varies widely. In 2011, synthetic fetched a premium to WTI of $8.27 a barrel on average, and in 2012, it has sold for an average discount of $1.38 a barrel, according to Shorcan Energy Brokers.

Syncrude, a joint venture of international oil companies, produces light crude processed from the oil sands, which has similar characteristics to the oil produced in fast-growing volumes in the Bakken region of North Dakota using horizontal drilling and hydraulic fracturing techniques.

The International Energy Agency last week singled out the Bakken as one of the main drivers of its forecast for the US to overtake Saudi Arabia and Russia as the world's top oil producer by 2017.

"Refineries are looking to accept this oil. It's easier to process. I think that's clear," Coutu told analysts. "So I think that we will continue to have a discount for light product, which ours is one of, and we will find refineries that will take our product."

The crudes compete for pipeline capacity to US Midwest refineries and surging output has spawned a major expansion of rail capacity as new pipelines to move the surging volumes are slow to get built.

In early November, Suncor Energy said rising light oil production threatened the profitability of a planned 200 000 bl/d oil sands upgrading facility called Voyageur.

Suncor is also a partner in Syncrude, which has a capacity of 350 000 bl/d. Last year, the Syncrude partners pushed back some of their large expansion plans, partly to iron out reliability issues that had led to unplanned outages.

Canadian Oil Sands has a 37% stake in the project, located north of Fort McMurray, Alberta.

About 63%, or C$836-million, of its 2013 budget will be invested in projects to replace or relocate mining infrastructure and to develop facilities to reclaim tailings, a by-product of the mining process. The rest will be spent on regular maintenance, the company said in a statement.

It will spend C$393-million on maintenance, including a planned outage of one of its upgrading units in the second half of 2013.

Canadian Oil Sands said it expects Syncrude to produce 105-million to 115-million barrels in 2013, or about 301 000 bl/d at the midpoint. That represented an increase of about 3% from estimated 2012 volumes.

Costs per barrel were expected to be C$36.67, about 3% lower than this year.

The company intends to maintain its quarterly dividend of 35 Canadian cents a share through 2013, the CEO said.

Cash flow, which gives a glimpse into the company's ability to fund development and pay out dividends, is estimated at C$1.04-billion, or C$2.16 a share, for 2013, the company said.

"Given Canadian Oil Sands' strong balance sheet, we believe the company is capable of managing the dividend while funding its major project spending over the next couple of years," National Bank Financial analyst Kyle Preston said in research note. "Following the completion of these projects, we expect the company will have a much more balanced payout profile going forward."

Shares of Canadian Oil Sands, which has a market value of C$9.91-billion, were off 13 Canadian cents at C$20.30 on the TSX on Friday. They have fallen 15% so far this year.

Syncrude's other partners are Imperial Oil, Nexen, Sinopec, JX Holdings' Mocal Energy, and Murphy Oil.

Edited by: Creamer Media Reporter

Monday, May 21, 2012

AngloGold to invest $400m in Colombia 2013-15

AngloGold Ashanti, the world's No. 3 gold producer, plans to invest $400-million in Colombia in the 2013-2015 period at its La Colosa deposit and other gold exploration projects, a company executive said on Friday.

Some $300-million is earmarked for exploration work at La Colosa, Colombia's largest gold deposit, located in the southern Tolima province.

The remaining $100-million would be invested in exploration projects in the regions of Antioquia, Cauca, Bolivar and Caldas, AngloGold's CEO in Colombia, Rafael Herz, said during a mining conference in the port city of Cartagena.

Hertz said that geological work allowed the company to more than double inferred gold resources at La Colosa to 24-million ounces from initial estimates of 12.3-million ounces.

"Mining resources in the area have been confirmed and are higher than (initially) established," he said.

AngloGold last year unveiled a plan to invest $310-million in Colombia between 2011 and 2013.

A local environmental agency refused to grant a water permit for La Colosa last year, arguing that there is not enough water for the project in the area.

Herz said the lack of environmental and water permits have prevented AngloGold from finishing exploration work at La Colosa in 2012, as it had planned.

The delay with the permits means Colosa may not start production until 2019, two years after initially planned.

The company estimates that la Colosa will produce between 600 000 oz and 800 000 oz of gold per year and that it will have a 20-year lifespan, Hertz said.

Colombia has seen a boom in foreign direct investment, mainly in oil and mining, over the last few years thanks to a US-backed military crackdown on illegal armed groups opening up many areas of the country to exploration.

However, mining and energy investors have run into issues over the past few years from licensing delays to environmental concerns and deadly accidents, forcing the government to overhaul the sectors including creating a new agency to oversee the mining industry.