Financial & Economic Performance

About Our Financial Reporting

Letter from Syncrude’s Chief Financial Officer

Syncrude’s business activities are restricted to the operation of the Syncrude Project, a joint venture, and as such Syncrude does not sell or receive revenue from its production. Accordingly, Syncrude is not able to provide conventional financial statements.

Syncrude incurs operating costs and capital expenditures associated with its operations.

Certain additional costs, liabilities and obligations are carried directly by each joint venture participant. These include reclamation and site restoration obligations, hedging of commodity prices and foreign exchange, owner marketing and administrative costs, and pension costs dependent on market performance and changes in discount rates. Each joint venture participant accounts for their proportionate share of Syncrude’s costs in accordance with their stated accounting policies.

Financial information presented here has been prepared by management in accordance with accounting principles generally accepted in Canada and includes certain amounts based on estimates and management’s best judgments. This information is presented in un-audited form.

Management maintains a system of internal controls over financial reporting that provides reasonable assurance that all transactions are recorded, that the information provided realistically portrays the operating and business results, and that the assets of the Syncrude Project are safeguarded. Syncrude’s internal auditors review and evaluate compliance with internal controls. The Board of Directors of Syncrude is responsible for ensuring that management meets the requirements for internal controls over financial reporting. The Audit and Pension Committee of the Board of Directors discharges this responsibility and engages an external auditor to conduct an independent review of the financial reports.

Syncrude’s policy and practice is to meet the highest standard of ethical conduct in all of its activities, and to continuously improve its systems of internal business controls. Toward this end, the Syncrude organization is now upgrading its control systems and processes to ensure effective compliance with Bill C198 and related CSA regulation MI52-109 by year-end 2006.

Philip C. Lachambre
Executive Vice President and Chief Financial Officer