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The increase in total operating expenses in the first quarter of 2013 reflects:
-- higher production and maintenance costs, primarily due to unplanned outages in extraction units; and-- higher natural gas purchases due to higher prices.
The increase in per-barrel operating expenses in the first quarter of 2013 also reflects lower sales volumes.
The following table shows operating expenses per barrel of bitumen and SCO. The information allocates costs to bitumen production and upgrading on the basis used to determine Crown royalties.
Three Months Ended March 31 2013 2012(3)----------------------------------------------------------------------------($ per barrel) Bitumen SCO Bitumen SCO----------------------------------------------------------------------------Bitumen production $ 25.02 $ 30.64 $ 19.95 $ 24.17Internal fuel allocation(1) 2.65 3.25 2.14 2.59----------------------------------------------------------------------------Total bitumen production expenses $ 27.67 $ 33.89 $ 22.09 $ 26.76----------------------------------------------------------------------------Upgrading(2) $ 10.56 $ 8.41Less: internal fuel allocation(1) (3.25) (2.59)----------------------------------------------------------------------------Total upgrading expenses $ 7.31 $ 5.82----------------------------------------------------------------------------Total operating expenses $ 41.20 $ 32.58--------------------------------------------------------------------------------------------------------------------------------------------------------(thousands of barrels per day)----------------------------------------------------------------------------Syncrude production volumes 319 260 357 295Canadian Oil Sands sales volumes 96 108--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Reflects energy generated by the upgrader that is used in the bitumen production process and is valued by reference to natural gas and diesel prices. Natural gas prices averaged $2.95 per GJ and $2.23 per GJ in the three months ended March 31, 2013 and March 31, 2012, respectively. Diesel prices averaged $0.90 per litre and $0.93 per litre in the three months ended March 31, 2013 and March 31, 2012, respectively.(2) Upgrading expenses include the production and maintenance expenses associated with processing and upgrading bitumen to SCO.(3) Certain comparative period amounts have been restated to conform to the current period presentation.
Crown Royalties
Crown royalties decreased to $23 million, or $2.69 per barrel, in the first quarter of 2013, from $96 million, or $9.71 per barrel, in the first quarter of 2012 due primarily to increases in deductible capital expenditures and lower bitumen volumes and prices in the 2013 first quarter. The higher capital expenditures reflect spending on capital projects to replace or relocate Syncrude mine trains and to support tailings management plans.
