BUSINESS
02/13/2012 06:43 EST | Updated 04/14/2012 05:12 EDT

Canadian Natural says Horizon oil output down until mid-to-late March

CALGARY - Canadian Natural Resources Ltd.'s Horizon oilsands mine won't return to full production until mid-to-late March, the major energy company said Monday.

Output has been suspended since Feb. 5 while Canadian Natural (TSX:CNQ) made repairs to its upgrader, which processes thick, sticky bitumen from the oilsands into a type of crude refineries can handle.

The problem was with a part of the upgrader called the fractionator, in which the oil is separated into various components.

"On February 11, upon gaining full access to the fractionator, Canadian Natural determined the damage to be somewhat more extensive than originally thought, with a current estimated time to return to full production levels now targeted for mid-to-late March," the company said in a statement.

The outage has caused Canadian Natural to lower its 2012 Horizon output targets to between 93,000 and 103,000 barrels per day of synthetic crude oil from 105,000 to 115,000 barrels per day.

Just over a year ago, an explosion badly damaged the upgrader at the mine north of Fort McMurray, Alta. Five workers were injured.

The company has attributed the fire to a valve opening at the top of a coking drum at the wrong time. Frigid temperatures in region at the time caused a great deal of freeze damage to the plant and forest fires later in the spring slowed repair work.

After shutting the mine for repairs, Horizon began churning out crude again in August.

Canadian Natural estimated repair and rebuild costs of between $400 million and $450 million but recouped much of that through insurance.

Canadian Natural is one of Canada's biggest oil and natural gas producers, with the bulk of its operations in Western Canada. It also has holdings in the U.K. portion of the North Sea and off the coast of West Africa.

In the oilsands, Canadian Natural is planning a second phase to its Horizon mine, and a new steam-driven oilsands project at Kirby, Alta.

Shares in Canadian Natural, which issued the Horizon update after markets closed, rose 42 cents to close at $38.17 on the Toronto Stock Exchange Monday.