Oil and natural gas production firm Canadian Natural Resources has completed 90% of its Horizon oil sands project in Canada. The project reportedly remains on track for first oil in the third quarter of 2008.
The remaining 10%, which according to Canadian Natural is the most labor-intensive portion of the Horizon project, is witnessing a slowdown. There was a significant deterioration in labor productivity on the construction site due to adverse weather in January and early February 2008, the company said.
The weather also affected the commissioning schedule of certain plants in the project, though it is not expected to have any impact on the firm’s targeted completion of Phase-1 of the project.
As of December 31, 2007, the firm’s forecasted total costs of the Horizon project were at 13.4% over the C$6.8 billion board of directors’ authorization.
The firm said that if it could regain targeted labor efficiencies and productivity, cost overruns could be reduced to approximately 25% above the original C$6.8 billion board authorization.