* 2013 oil output at 482,000 to 513,000 bpd
* Natural gas production to fall 9 pct
* Capital budget rises 7.7 pct
* Sees improving Canadian oil prices
* Shares down 2.2 pct
By Scott Haggett
CALGARY, Alberta, Dec 4 Canadian Natural
Resources Ltd, the country's biggest independent
petroleum producer, said on Tuesday it will boost oil production
by about 9 percent next year as it looks to higher prices and
strong demand for Canadian crude in the U.S. market.
The company, which operates in Canada, the North Sea and
offshore West Africa, expects to spend C$6.95 billion ($7
billion) next year, 7.7 percent more than its 2012 capital
budget. It's targeting oil production of between 482,000 and
513,000 barrels per day in 2013, up from a current forecast
range of 452,000 to 460,000 bpd.
The increase comes despite a deep discount for Canada's
heavy crude from the oil sands, which now sells for nearly $30
per barrel less than West Texas Intermediate oil, the benchmark
U.S. price, because of pipeline constraints and surging supply.
But Canadian Natural is looking for higher prices for its
heavy oil next year, citing expanded refining capacity in the
Midwest and additional pipeline links to the refining cluster on
the gulf coast.
"We are bullish on heavy oil pricing in 2013, as well as the
mid and long term," Steve Laut, the company's president, said on
a conference call.
Laut expects that new heavy-oil refining capacity coming on
stream at BP Plc's, Whiting, Indiana, refinery and
Marathon Oil Corp's Detroit refinery will add more than
300,000 bpd of additional demand for oil sands crude.
As well, an expansion of Enbridge Inc's pipeline
network and the potential completion of TransCanada Corp's
controversial Keystone XL pipeline will expand access
to gulf refineries and drain the bloated Cushing, Oklahoma,
storage hub, where high inventories have pushed the benchmark
North American price to a differential of more than $20 under
the Brent European standard.
"Going forward we expect that as incremental refining
capacity comes on stream, Cushing becomes debottlenecked, and
the (new pipelines) come on stream we'll see the volatility in
heavy oil differentials significantly reduced and heavy oil
differentials will tighten," Laut said.
Despite the company's bullish price forecast its shares
dropped, analysts said, because investors had expected more
substantial production growth.
Canadian Natural shares were down 60 Canadian cents to
C$27.59 by midafternoon on the Toronto Stock Exchange.
HORIZON OUTPUT RISES
Canadian Natural expects to produce between 100,000 and
108,000 bpd of synthetic crude oil in 2013 at its Horizon oil
sands project in Northern Alberta, up from an expected range of
between 90,000 and 98,000 bpd this year.
The company has earmarked nearly C$2.6 billion for Horizon
in its 2013 capital budget, up from about C$1.7 billion this
year, as it continues a slow expansion of the project to boost
production to 250,000 bpd.
Canadian Natural forecast 2013 gas output at between 1,085
billion and 1,145 billion cubic feet per day. The midpoint of
the range is 9 percent below the company's 2012 guidance.
It has slowed natural gas exploration, focusing more on
higher-return crude oil drilling.