Canadian Natural Says It May Cancel $7 Billion ($7.08 US) In Oil Sands Work If Royalties Rise

[hatrack]

Oct. 9 (Bloomberg) -- Canadian Natural Resources Ltd., the largest heavy-oil producer in Alberta, said it may cancel oil- sands projects worth as much as C$7 billion ($7.08 billion) if the government boosts royalties.

The company said it may halt the Gregoire Lake, Kirby and Birch Mountain tar-sands projects if the government adopts recommendations released last month that include a new tax on such developments. The four projects combined would boost the company's production by as much as 235,000 barrels of oil a day in the next 15 years, Calgary-based Canadian Natural said.

The developments, which extract an extra-heavy crude from the tar sands called bitumen, need oil prices of about $85 a barrel to be economically attractive if the panel's suggestions are adopted, Chris Feltin, an analyst with Calgary brokerage Tristone Capital Inc., said today in a telephone interview.

``You'd be hard pressed to make the economics go around at $70 a barrel for a bitumen project,'' said Feltin, who rates the company's stock as ``market perform'' and owns none. ``I wouldn't view this as a threat at all. I think this is a realistic challenge that they're going to have to overcome.''

EDIT

http://www.bloomberg.com/apps/news?pid=20601082&sid=aZ3zuel41qoc&refer=canada

[hogwyld]

1. Unfortunately,

we humans are so addicted to black tar heroin, er, I mean petroleum, we'll pay any price to get our fixes.