Canadian Natural’s goal has always been to run our business and run it well, executing on our projects and creating value for our shareholders. That is what we have focused on for the past twenty years, and it is what we continue to focus on. Our asset base is strong and balanced. We have crude oil and natural gas conventional operations in domestic and international basins, along with a world class oil sands mining operation.
Shallow gas basin of Alberta was the modern iteration of the Company’s birthplace and is still a major contributor to our success. Even in today’s world, conventional and shallow natural gas drilling can generate significant returns as we leverage our strong land position with new technology.
Northeast British Columbia natural gas basin was entered, providing early knowledge and a leading position into this prolific basin. Canadian Natural became a major natural gas producer in British Columbia through acquisition and drilling. Advances in technologies and new resource plays such as Montney Shale gas means that this area will continue to be a major growth driver for the foreseeable future.
Heavy crude oil operations were new to Canadian Natural following the acquisition of primary heavy crude oil lands in 1993. We took our time and developed an expertise in these operations. This allowed us to intelligently acquire and expand our holdings. Today, we are a recognized leader leveraging technology to further grow and recover crude oil. Fields such as Pelican Lake will continue to add significant value to shareholders for years to come.
Thermal in situ heavy crude oil properties were purchased by Canadian Natural. As one of the initial entrants in the field we were better able to understand and economically bid on asset packages including the landmark acquisition in 1999 where the majority of our thermal and Horizon Project mining properties were acquired. Today we are a leader in thermal in situ crude oil developments and have a clearly defined plan for future growth.
International offshore properties were first acquired as part of a larger transaction. The acquired package included numerous, fractional interests around the world. We carefully rationalized the assets in accordance with our strategy and expertise. The North Sea represents a mature basin where we look to acquire assets and economically extend field lives – the same approach used in Western Canada. Offshore Africa provides the opportunity for exploration and exploitation growth while leveraging our offshore expertise.
Deep gas basin of Northwest Alberta was initially acquired as part of a larger acquisition and further augmented by other acquisitions. We leveraged our knowledge and expertise between British Columbia and Northwest Alberta to make both areas stronger. These areas are home to numerous resource plays and shale gas opportunities and are a part of our future growth story.
Oil sands mining construction of the Horizon Project began in 2005 with the first phase completed in early 2009. We plan to expand production of this world-class asset base with a target synthetic crude oil rate of 500,000 bbl/d.
In late October 2008, our Primrose East expansion added 40,000 bbl/d of capacity after achieving first production. We target future development of our thermal crude oil assets to add an additional 30,000 – 60,000 bbl/d every 2-3 years in the next decade. The Kirby In Situ Oil Sands, currently awaiting regulatory approval, is the next project to expand the crude oil portfolio.
Canadian Natural realized first synthetic crude oil (SCO) at the Horizon Oil Sands on February 28, 2009. Shortly afterwards on March 18, 2009, Canadian Natural had its first shipment of SCO into the sales pipeline. Today we are marketing our current production of SCO in all traditional SCO markets and refineries. In Q4/09, we are targeting for reliable and consistent production at design capacity of 110,000 bbl/d at Horizon.
Finally, Baobab production in Offshore Côte d’Ivoire has been restored to approximately 11,000 bbl/d net to Canadian Natural after completing a drilling program in Q1/09.
During the last half of 2010, the Company received regulatory approval for its Kirby In situ Oil Sands Project and the Board of Directors sanctioned Kirby Phase 1 with construction commencing in the fourth quarter 2010. First steam-in is targeted for 2013 and peak production for Phase 1 is targeted to be 40,000 bbl/d with an overall cost targeted of $1.25 Billion.
The Company completed a number of transactions in the normal course to acquire and dispose of interests in crude oil and natural gas properties for an aggregate net expenditure of $1.9 billion. The properties acquired are located in the Company’s principal operating regions and are comprised of producing and non-producing leases together with related facilities.