RE:COS losing $6 for every barrel it is now producingNow it is:
Even so, Canadian Oil Sands Ltd (COS.TO 1.65%), the largest-interest owner in the 326,000 barrel per day Syncrude mining and upgrading venture, said shutting in production is not something the company would consider.
"From COS' perspective we believe the costs to shut in and later restart production are very significant. This is the case for most if not all oil sands projects," said Scott Arnold, director of investor and corporate relations at COS.
"Shutting in production is not something COS would contemplate, even at current spot prices."
Break-even costs include operating expenses, regular maintenance, capital expenditures, crown royalties and development expenses and reclamation, according to the COS presentation.
Upgrading bitumen into synthetic crude adds extra expense, but the unusually detailed breakdown of costs underlines the difficulties facing all producers in northern Alberta.
Syncrude is a joint venture of seven partners: COS, Suncor Energy (SU.TO -0.48%), Imperial Oil (IMO.TO -0.56%), Mocal Energy, Murphy Oil (MUR.N -0.72%), CNOOC subsidiary Nexen 0883.HK and China's Sinopec 600028.SS.
Arnold added any decision to shut in production would be made by all the Syncrude owners, who may each have different opinions on the matter.