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Syncrude's oil sands plant at Mildred Lake north of Fort McMurray, Alta.

Kevin Van Paassen/The Globe and Mail

Spending expectations for 2013 are down by 11 per cent at Syncrude Canada Ltd. amid broader industry concern over the cost of oil sands production.

On Thursday, Canadian Oil Sands Ltd. released 2013 budget documents that show its share of capital spending falling to $1.3-billion. The company, which owns a 36.75 per cent interest in Syncrude, had budgeted $1.46-million in spending for 2012.

Canadian Oil Sands expects Syncrude production to rise by 3 per cent from actual output in 2012. However, its 2013 expectations of 110 million barrels are down slightly from year-ago expectations for 2012 of 113 million barrels.

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Some $836-million of the 2013 spending will be put toward measures such as replacing or relocating mining infrastructure, as well as building new facilities to clean up toxic mine effluent. Most of the remainder will go to regular maintenance.

In a statement, COS chief executive Marcel Coutu said the company intended to make "significant progress" on major capital projects. That will place it "in the advantageous position of having the infrastructure in place to produce strong, stable volumes of fully upgraded, light crude oil for decades."

Among the company's targets are to achieve per-barrel operating costs in 2013 of $36.67 per barrel, which is actually slightly above third-quarter costs of $36.17, but below 2012 average costs of $39.14.

Costs have emerged as a significant issue for the oil sands, as blocked pipelines and competition from burgeoning U.S. crude supplies weigh on the price of Canadian crude.

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