CALGARY - Canadian Oil Sands Ltd. says it plans to spend $1.3 billion next year at the Syncrude oilsands mine, about 63 per cent of which will go toward replacing and moving mining infrastructure and cleaning up tailings ponds.
The Calgary-based company (TSX:COS), which owns a 37 per cent stake in the massive mine north of Fort McMurray, Alta., has also earmarked capital for regular maintenance work.
"Syncrude's major projects are advancing on-schedule and on-budget, and our finance plan for these projects is in excellent shape. Our balance sheet is stronger than we had anticipated exiting 2012," said CEO Marcel Coutu in a release.
Coutu added that the company plans to maintain its current dividend at 35 cents per share through 2013.
Next year, Canadian Oil Sands plans to complete its Aurora North Tailings Management project to clean up waste from the oilsands extraction process that consists of sand, clay, residual bitumen and water. A plant will be built to separate the solids from the liquids, so that vegetation can be planted where the tailings pond used to be.
The company aims to have a project to relocate mining equipment at its Aurora mine 90 per cent complete next year and a project to replace equipment at Mildred Lake 75 per cent complete.
Canadian Oil Sands estimates Syncrude will produce 105 million to 115 million barrels per day, taking into account planned maintenance work that will take place in the second half of 2013.
In releasing its third-quarter results last month, Syncrude said it was expecting annual Syncrude production in 2012 of between 105 million and 108 million barrels.
The company is expecting West Texas Intermediate oil prices, a key north American benchmark that fetches higher prices than the type of crude oilsands companies produce, to average US$85 per barrel next year
The other owners of Syncrude include Imperial Oil Ltd. (TSX:IMO), Suncor Energy Inc. (TSX:SU), Mocal Energy, Murphy Oil, China's Sinopec and Nexen Inc. (TSX:NXY), which has agreed to be taken over by another Chinese state-owned firm.