RE:RE:RE:higher dividends are coming GS,
thanks for your post. Clearly, drive the oil price low enough and cash flow for COS and others becomes problematic. My sense is the analysts are likely reviewing and updating there oil price assumptions.
As far as operational reliability I was reviewing the 2013 annual report president's message and found the following instructive:
"Syncrude produced 97.5 million barrels in 2013, which was about 11% below budgeted volumes for the year and lower than the 105 million barrels Syncrude has averaged over the last seven years. The shortfall was largely due to unplanned maintenance in extraction, and extended turnarounds of upgrading units.
The extraction reliability issues were mainly in the crushing and conveyor systems in our mine trains; these will be renewed or replaced by the end of 2014 as part of Syncrude’s mine train projects. At the Aurora North Mine, the crushers and material handling components have already been rebuilt as part of the train relocation project, and the trains have been performing very well. At the Mildred Lake Mine, new mine trains should be in operation before the end of the year. These trains feature greater capacity and wet crushing technology, which should improve reliability (see Mining Technology section).
Production in 2013 was also impacted by extended turnarounds of the Coker 8-1, LC-Finer and secondary upgrading units. Syncrude has identified inefficiencies in turnaround planning and scheduling, and will incorporate that knowledge into future turnarounds.
Syncrude is focused on improving reliability to unlock higher production levels from the current facility and, as always, managing costs. They remain committed to implementing comprehensive systems and processes to grow production volumes over the longterm. Significant progress was achieved in 2013.
ExxonMobil’s proprietary Operations Integrity Management System (OIMS) was fully implemented last year. OIMS establishes expectations and requirements for addressing safety, health, environmental and social risk. This system is proven in ExxonMobil’s world-leading refinery operations and made available to Syncrude as part of the Management Services Agreement (MSA). Work under the MSA has also identified several initiatives to help remove production constraints.
Upgrades are currently being made on the bitumen centrifuges to reduce solids in the bitumen froth entering the upgrader, which was leading to leaks and unexpected downtime. Analysis also indicated enhancements on heat exchangers would improve the functioning of Syncrude’s hydrogen plants. Modifications on the bitumen centrifuges and hydrogen plants are scheduled to be complete in 2014, and should help reduce outages that resulted in the loss of millions of barrels of production in recent years."
Sorry for the long excerpt but two things caught my attention.
1) we are getting more visibility into what went wrong with production,and the learnings and plans to improve
2) as a result it inspires more confidence that production will improve. I would prefer even more with time lines etc, but it is an improvement.
Lastly I am looking for info about higher capex in 2015-2017. What I have read so far is that syncrude is ahead of plan under budget and expects to be completed in early
2015. Can you provide the capex detail?