UPDATE 1-Canadian Natural Resources defers oil sands thermal project

Mon Jan 12, 2015 12:26pm EST
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(Adds executive comment, Kirby North details)

By Nia Williams

Jan 12 (Reuters) - Canadian Natural Resources Ltd, the country's largest independent oil producer, said on Monday it would defer the first phase of its 40,000-barrel-per-day Kirby North thermal project in northern Alberta until crude prices stabilize.

The company, whose shares fell more than 4 percent, also cut its 2015 capital expenditure and production forecast as global oil prices continued to nosedive.

Phase one of the Kirby North thermal project, pumping steam underground to liquefy bitumen so it can flow to the surface, was originally targeted for the fourth quarter of 2016.

Chief Financial Officer Corey Bieber said he did not know the project's new start date, but it would depend on such factors as oil prices, currency rates and capital costs.

"We target our 15 percent returns," Bieber said, "and until we can justify that we are going to get that through its life on a full cycle basis, it will be deferred."

CNRL, which has operations in Western Canada, Britain's North Sea and offshore West Africa, now plans to spend C$6.2 billion ($5.22 billion) in 2015, 28 percent lower than its earlier forecast of C$8.6 billion.

The decrease stems primarily from reduced drilling activity, the company said, echoing other North American energy producers that have scaled back spending plans due to weak oil prices.   Continued...