Canadian Natural Resources Ltd.'s Horizon oil sands plant in northern Alberta has been shut down for unplanned repairs, the company said on Tuesday, pushing up North American oil prices and pressuring the company's shares.
Canadian Natural, the country's biggest independent oil explorer, gave few details of the outage, but a source familiar with the situation said the 110,000 barrel a day plant could be off line for two to three weeks.
The shutdown came as price discounts for the synthetic oil wrung from the Canadian oil sands had been deepening to record levels due to booming industry-wide supplies as well as tight pipeline space. The Horizon news briefly narrowed that spread.
It also contributed to a $3 (U.S.) spike in U.S. benchmark West Texas Intermediate prices and helped narrow its deficit to Brent crude to $18 a barrel from a three-month low under $20. WTI settled up $1.50 a barrel at $98.41 on Tuesday.
Shares in Canadian Natural, whose Horizon oil sands project was halted for seven months last year due to a devastating fire, fell $1.76 (Canadian), or 4.4 per cent, to $38.52 on the Toronto Stock Exchange. They had fallen as much as 5.2 per cent in the session.
The company said in a brief e-mail that it was not making any changes to its annual production targets as a result of the outage at Horizon, Canada's fourth-largest oil sands mining and synthetic crude processing venture.
It has forecast oil sands production of 105,000 to 115,000 barrels a day for 2012, and overall oil and gas liquids output of 464,000 to 504,000 barrels a day.
The work at the plant, which is said to be concentrated on one of the fractionation towers, follows weekend maintenance at the site, the source said.