Canada's largest synthetic crude project, Syncrude Canada Ltd, is losing roughly $6 on every barrel it produces at current prices, a company presentation showed on Aug. 19, a stark sign of the pain being felt by oil sands operators.

Even so, Canadian Oil Sands Ltd, the largest-interest owner in the Syncrude joint venture, said shutting in production is not something the company would consider given the high costs involved.

Syncrude is a 326,000 barrel per day mining and upgrading project in northern Alberta, at which mined oil sands bitumen is upgraded into refinery-ready synthetic crude.

In a presentation at the EnerCom Oil and Gas conference in Denver, Colorado, Siren Fisekci, COS vice president of investor and corporate relations, said Syncrude's break-even cost is C$57 ($43.46) a barrel.

That is around $6 higher than the current outright price for synthetic crude, which yesterday settled at $37.37 a barrel. Synthetic crude has been below $43 a barrel since early August as its discount to benchmark U.S. crude widened and global oil prices dived.

The cost to COS to produce Syncrude's fully upgraded oil is even steeper at C$62 ($47.27) a barrel once interest payments, administration, insurance and other costs are added in.

Break-even costs include operating expenses, regular maintenance, capital expenditures, crown royalties and development expenses and reclamation, according to the COS presentation.

Upgrading bitumen into synthetic crude adds extra expense, but the unusually detailed breakdown of costs underlines the difficulties facing all producers in northern Alberta.

The oil sands are the world's third-largest crude reserves, but have some of the highest operating expenses globally.

Despite that, producers are reluctant to halt output while waiting for prices to recover.

Scott Arnold, director of investor and corporate relations at COS, said the company was focused on improving production to lower per-barrel costs.

"From COS' perspective we believe the costs to shut in, and later restart, production are very significant. This is the case for most if not all oil sands projects," he said. "Shutting in production is not something COS would contemplate, even at current spot prices."

Syncrude is a joint venture of seven partners: COS, Suncor Energy, Imperial Oil, Mocal Energy, Murphy Oil , CNOOC subsidiary Nexen and China's Sinopec .

Arnold added any decision to shut in production would be made by all the Syncrude owners, who may each have different opinions on the matter.