Canadian Oil Sands cuts 2009 Syncrude estimate

TORONTO (Reuters) - Canadian Oil Sands Trust said on Friday it is cutting its 2009 outlook for production from the Syncrude Canada Ltd oil sands venture, the world's largest producer of synthetic oil.

Canadian Oil, the joint venture's largest owner, cut the production forecast to 109 million barrels from 115 million barrels. It said this works out to 40 million barrels of production net to the trust, down from 42.3 million.

The revised estimate comes after Canadian Oil Sands said on Tuesday that Syncrude had taken one of its main processing units offline for two months of planned maintenance.

It said then that coker 8-3, part of Syncrude's upgrading operations, will undergo modifications to improve yield and run length during the turnaround.

Syncrude, which can produce as much as 350,000 barrels a day, has two other coker units that turn tar-like crude from the oil sands into refinery-ready light oil.

The trust said on Friday that the reduced forecasts are due to an extension in the schedule for turnaround work on Coker 8-3 and Syncrude's largest sulphur plant.

"As a result of these events, Syncrude production is expected to be lower in the first half of 2009 than originally anticipated," it said in statement.

"Canadian Oil Sands continues to expect modest turnaround activity and more reliable operations at Syncrude in the second half of 2009, resulting in improved production rates."

The trust cut its outlook for the range of Syncrude's 2009 production to 105 million to 112 million barrels from the previous range of 110 million barrels to 120 million barrels. The revised forecast works out to 38.6 million to 41.1 million barrels net to the trust.

The trust warned that the extension in the turnaround schedule is also expected to result in higher operating costs.

It said the exact amount of the costs could not be determined for now, but will be disclosed if material information becomes known. The trust will update investors when they release results on April 29.

Syncrude's other partners are Imperial Oil Ltd , Petro-Canada , ConocoPhillips , Nexen Inc , Nippon Oil Corp unit Mocal Energy Ltd and Murphy Oil Corp .

(Reporting by Jeffrey Hodgson; Editing by Gary Hill)