Canadian Natural says Horizon costs up 5-12 pct
CALGARY, Alberta, May 2 (Reuters) - Canadian Natural Resources Ltd. (CNQ.TO) expects the first phase of its Horizon oil sands project will cost 5 percent to 12 percent more than its C$6.8 billion ($6.1 billion) budget, it said on Wednesday.
With the northern Alberta project two-thirds complete, the increase of up to C$816 million still leaves it near its original estimate, a rarity given the inflation that has plagued oil sands development, Canadian Natural said.
"Our actual spending is near plan and our overall project cost is currently forecast in a range that is not materially in excess from that approved by the board of directors in February 2005," Canada's No. 2 independent oil producer said in a statement.
The company is developing the Horizon oil sands mining and synthetic crude processing project in three phases at a total estimated cost of C$10.8 billion.
The first 110,000-barrel-a-day phase is slated to start up in the third quarter of 2008.
With the rush to develop the oil sands, Alberta's skilled labor market has been stretched thin and materials prices have surged, causing overruns throughout the industry.
Canadian Natural shares closed up 97 Canadian cents at C$67.35 on the Toronto Stock Exchange. It released its project update after the market closed.
($1=$1.11 Canadian)
