The Syncrude Project is operated and administered by Syncrude Canada Ltd. on behalf of its joint venture owners. Syncrude Canada operates large oil sands mines, utilities plants, bitumen extraction plants and an upgrading complex that processes bitumen into a high-quality sweet crude oil. The Syncrude consortium was formed in 1964 with the official opening of the project and the first barrel shipped in 1978. Since that time, Syncrude has produced more than 1.8 billion barrels of synthetic crude oil. Syncrude's production is sent by pipeline to Edmonton area refineries and to pipeline terminals, which ship it to refineries in Canada and the United States.
Syncrude's joint venture owners pay their pro-rata share of all cash costs, including capital and operating expenses. Each owner is responsible for marketing its own portions of production.
LONG-LIFE RESERVES AND RESOURCES1
| As at December 31, 2007 (billions of barrels of SCO) | Syncrude | Canadian Oil Sands2 |
| Proved plus Probable Reserves | 4.9 | 1.8 |
| Contingent Resources – best estimate | 5.6 | 2.1 |
| Prospective Resources – best estimate | 2.2 | 0.8 |
| Remaining Recoverable Resources | 12.7 | 4.7 |
| 1 | Based on independent reserves and resources estimates by GLJ Petroleum Consultants Ltd. as of December 31, 2007. See reserves and resources cautionary advisory on inside front cover, definitions in the Glossary and Canadian Oil Sands' Annual Information Form. |
| 2 | The Trust, through its operating subsidiary, holds a 36.74 percent interest in the Syncrude Project. |
Following a re-evaluation of the resource base using higher TV/BIP ratios, Syncrude has remaining recoverable resources of 12.7 billion barrels of fully upgraded synthetic crude oil.
In 2006 Syncrude Canada Ltd. entered a Management Services Agreement with Imperial Oil Resources. It provides Syncrude with operational, technical and business management services that enable Syncrude to adopt global best practices from Imperial and its majority owner, ExxonMobil, in such areas as: maintenance and reliability, energy management, procurement and safety, health and environmental performance.
Syncrude is in the process of optimizing its newly expanded facility to achieve design productive capacity of 350,000 barrels per day on a sustained basis. Canadian Oil Sands estimates Syncrude will produce about 315,000 barrels per day at an average operating cost of $26.83 per barrel in 2008. Sustaining capital costs are expected to total $760 million (above figures gross to Syncrude; more information on Canadian Oil Sands' outlook is available in the Outlook section of the Management's Discussion and Analysis in this annual report).
