Canadian Natural oil sands output cut, oil price up

Fri Jan 7, 2011 5:41pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jeffrey Jones and Scott Haggett

CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd's shares tumbled and oil prices jumped on Friday after a fire halted production at the company's main oil sands project in northern Alberta.

Canadian Natural, the country's largest independent oil producer, could not say when its 110,000-barrel-a-day Horizon facility would resume normal operations, but it said it expects to have a repair schedule readied next week.

"We've essentially just initiated the investigation process ... and our first priority is to actually get into the unit for the assessment and inspection," Peter Janson, senior vice-president of Horizon operations, told Reuters.

"It will take us a little time to make sure we don't have any hazards that could affect personnel going back into that area."

The blaze, which broke out on Thursday evening, initially engulfed an upgrading unit that converts the tarlike bitumen extracted from the sands into synthetic crude, injuring five workers.

Though the company has not been able to gain access to the site since the fire, Janson said the upgrader's key coker unit was damaged but not destroyed in the blaze.

The plant, the newest major project in Alberta's oil sands, cost C$9.7 billion ($9.8 billion) to build. The company said it has a $2 billion insurance package to cover the cost of repairs as well as the operating costs for the facility after 90 days.

Canadian Natural is working with Alberta's health and safety agency to determine the cause of the fire. The agency has put stop-work order on the site and is allowing only its own investigators to access the damaged area.   Continued...