Canadian Stocks Decline on Nexen Profit Miss, Oil-Sands Costs

Canada’s tar sands contain an estimated 175 billion barrels of recoverable oil, the biggest reserves outside the Middle East. Companies plan to spend as much as C$125 billion ($112 billion) to almost triple output from the deposits by 2015. Much of the production is to supply U.S. markets. Project costs have been inflated by competition for labor and equipment amid shortages.

Rising costs and the government initiative are a “big negative for oil companies, particularly oil-sands producers,” said Mathieu Roy, who helps manage $1.25 billion at Louisbourg Investments Inc. in Moncton, New Brunswick.

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