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Gold/Mining/Energy : Oil Sands and Related Stocks -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (17515)	8/31/2007 2:39:10 AM
From: was Michelangelo7	Read Replies (1) \| Respond to of 25575

"Due to the delay, it said the capital cost of the project, in which Nexen has a 50 percent stake, was expected to grow 10 percent to 15 percent over a previous C$5.3 billion forecast." So this puts the capital costs per flowing barrel/day at about $100,000, or in the same range as the large mining projects that are just getting started. And the costs are still rising. 10% - 15% in less than 2 months?!?! It's no wonder that oilsand stocks aren't getting any respect. It seems to me that these on-site upgraders are not worth the capital investment required. Encana's JV with Conoco is looking better and better all the time. And if CLL can produce bitumen for $30,000 per flowing barrel/day, why build an upgrader and more than triple your capital costs, just to capture the 30% - 40% differential? I won't get into THAI economics, since they've been stated here before, and we all know that it's not a proven industry standard but is still in pilot production stage. Disclosure and biases: My current oilsand holdings are large in PBG, and recently started building a small position in CLL. Other significant energy holdings are OIL, PMG, and HOC.