2004 Results

Syncrude delivered strong business results in 2004. Crude oil shipments set a new record of 87.2 million barrels (238,000 barrels per day) up 12.8 per cent from 2003, as the plant experienced steady, reliable operations in the absence of a coker maintenance turnaround. Crude oil prices at the plant gate averaged Cdn $52.36 per barrel, up from Cdn $42.82 per barrel in 2003.

Pro-forma revenues from crude oil shipments rose 39 per cent to $4.6 billion on the strength of higher crude prices and record crude oil shipments, partially offset by the impact of a stronger Canadian dollar. Operating costs were $18.61 per barrel, a decrease from the $21.07 per barrel recorded in 2003. Higher crude production and lower operating costs contributed to the unit cost reduction.

Pro-forma cash flow from operations was a record $2.9 billion, an increase of $1.2 billion from 2003 due to higher crude oil shipments and a higher average plant gate price. Operating netbacks rose to $33.23 per barrel, a more than 50 per cent increase from $21.32 a year earlier.

Pro-forma cash flow fully funded the $2.7 billion capital expenditure program, the largest in Syncrude’s history. Significant progress was made on the Stage 3 upgrader expansion; construction was 75 per cent complete by year-end, versus 35 per cent at the end of 2003. Mechanical completion is expected by early 2006, and completion of commissioning and start-up of all units is scheduled for mid-2006. Net cash flow after deducting capital program expenditures was $148 million, up $1,053 million over 2003.

Pro-forma return on total capital employed was 20.1 per cent in 2004 versus 14.8 per cent in 2003.