Tuesday, April 26, 2005

Two On Canadian Oilsands

Here's a longish post on Power And Control about Chinese interests in Canadian oilsands. One possible benefit that it might have is by encouraging production, the Chinese are actually improving the world oil situation. This should be tempered with the understanding that the U.S. needs to build additional refineries capable of processing the heavy crude Canadian oilsands generate. (Thanks to John of Chiasm, who dropped word on my other blog, yo.)

Secondly, thanks to Reuters for a peek into oilsands extractor/processor Syncrude, whose profits dropped 43% on plant outages.

Sky-high crude prices are now set to translate into big benefits for Canadian Oil Sands, however, with Syncrude about a year away from completion of a C$7.9 billion ($6.4 billion) expansion, Marcel Coutu, the trust's chief executive, said.

If crude prices stay at today's levels, that expansion will be paid off in the same calendar year as the startup of the new equipment, which will boost output by 50 percent, he said.

That also means royalties paid to the Alberta government will jump to 25 percent of revenue after operating costs from the 1 percent oil sands developers enjoy while they make major capital investments on new projects and expansions.