In 2008, Petro-Canada's share of Trinidad and Tobago offshore production averaged 64 MMcf/d net, down from 71 MMcf/d net in 2007. Decreased production reflected additional maintenance at the Atlantic LNG plant, rebalancing of mutual aid production among producers to the Atlantic LNG plant and several brief shutdowns of the North Coast Marine Area (NCMA-1) asset to prepare for the startup of the new Poinsettia field. Trinidad and Tobago realized prices for natural gas averaged $7.15/Mcf in 2008, compared with $4.34/Mcf in 2007.
The Company holds a 17.3% working interest in the NCMA-1 offshore natural gas development project, where first gas was achieved in late 2006. Development of the Poinsettia field, with a platform and pipeline tie-back to the Hibiscus platform, was carried out on schedule during 2008. First gas is planned for the first quarter of 2009 from one subsea well, and six platform wells will commence drilling in the third quarter of 2009.
In 2008, Petro-Canada completed its eight-well exploration program in Block 22 and Block 1a/1b, which yielded four material discoveries (two on Block 22 and two on Block 1a). The Company expects to develop a strategy to commercialize these discoveries in 2009.
Other
In July 2008, Petro-Canada converted its existing reconnaissance licence in southern Morocco to an exploration permit. The Company’s partners in the exploration licence include German company RWE and the Moroccan National Office of Hydrocarbons.
Outlook
Production expectations in 2009
⋅
North Sea oil and gas production to average 85,000 boe/d net⋅
Other International oil and gas production to average 52,000 boe/d netGrowth plans
⋅
advance the redevelopment and exploration programs in Libya⋅
achieve scheduled milestones for the Syria Ebla gas project⋅
develop a commercialization strategy for discoveries in Trinidad and Tobago⋅
carry out a successful exploration programCapital spending plans in 20091
⋅
capital program of approximately $1,270 million is planned for International⋅
approximately $670 million, primarily for new growth projects in Syria and Libya⋅
approximately $470 million for reserves replacement spending in core areas, primarily at Buzzard, Guillemot West and Saxon⋅
approximately $130 million for exploration1 Petro-Canada will monitor energy and financial markets through 2009 and take advantage of the flexibility in its capital program to pace projects and adjust capital expenditures, as necessary.
International production from continuing operations is expected to be 137,000 boe/d net in 2009, lower than production levels of 157,200 boe/d net in 2008. Lower expected production in 2009 reflects a 28-day planned turnaround at Buzzard, announced OPEC production target cuts and natural declines in several fields.
Link to Petro-Canada's Corporate and Strategic Priorities
The International business is aligned with Petro-Canada's strategic priorities as outlined by its progress in 2008 and goals for 2009.
PRIORITY 2008 GOALS 2008 RESULTS 2009 GOALS
Delivering Profitable Growth with a Focus on Operated, Long-Life Assets
⋅
evaluate 2007 exploration results and deliver 2008 exploration program⋅
develop a transition plan for the Libya Concession Development project⋅
develop a detailed exploration program in Libya⋅
award EPC contract for Syria Ebla gas project and finalize commercial agreements⋅
spud first well for the Syria Ebla gas project⋅
evaluate opportunities to commercialize Trinidad and Tobago gas discoveries, subject to exploration results⋅
drilled 13 exploration wells, with nine wells completed as discoveries, four wells abandoned as dry holes and one well still drilling at year end⋅
signed six new EPSAs with the Libya NOC, adding reserves and extending terms by an expected 30 years with improved commercial terms⋅
commenced 3D seismic program in Libya⋅
completed 50% of Syria Ebla gas project⋅
commenced seismic and development drilling on the Syria Ebla gas project⋅
participated in four gas discoveries in Trinidad and Tobago and began study of commercialization options⋅
continue appraisal and development planning for the U.K. and the Netherlands exploration discoveries⋅
drill up to three exploration wells in the U.K. and Norway depending on rig availability⋅
continue Libya exploration 3D seismic program and start exploration drilling program⋅
prepare and submit redevelopment plans for the Libya Amal field and pursue early production gains across the new contract areas⋅
complete the Syria Ebla seismic program and continue development drilling and construction of the Syria Ebla gas plant with a first gas target of mid-2010⋅
develop appraisal andcommercialization strategies for the Trinidad and Tobago discoveries
Driving for First Quartile
Operation of Our Assets
⋅
maintain excellent production efficiency at the Petro-Canadaoperated De Ruyter and Hanze platforms
⋅
deliver plateau level production at Buzzard while the enhancement program is implemented⋅
delivered 97% reliability at both De Ruyter and Hanze facilities⋅
Buzzard achieved average production of 205,000 boe/d gross (61,300 boe/d net), in line with plateau production expectations⋅
maintain greater than 90% reliability at Hanze and De Ruyter and drill a Hanze Pliocene development well⋅
develop and implement Triton de-bottlenecking and reliability improvement plans⋅
identify and implement opportunities to reduce administrative and operating costs across the businessContinuing to Work at Being a Responsible Company