Company Provides Guidance on Integrated Oil Sands Strategy

CALGARY, ALBERTA--(CCNMatthews - Oct. 3, 2006) - Petro-Canada's 10 billion barrel oil sands resource is the engine of growth that will propel the company to a leading position among oil sands developers, Petro-Canada executives today will explain to an Investor Day audience.

"We're sitting on 10 billion barrels of total oil sands resource," said Neil Camarta, Petro-Canada's Senior Vice-President, Oil Sands. "And we now have an integrated strategy in place to bring it to market."

"On the mining side, with the Fort Hills project we're zeroing in on the best approach to get the oil from dirt to market," added Camarta. "We recognize that we're swimming against the tide of rising project costs - and this is the only time when we can do something about it. We're not going to rush things."

Initial Fort Hills estimates will be available early next year as part of the Design Basis Memorandum, which defines the intended size of the project and other important design parameters.

Petro-Canada is targeting Fort Hills bitumen production of 150,000 to 170,000 barrels per day in 2011. Subsequent phases could increase the total production to 370,000 b/d, pending regulatory approval.

The project includes a planned upgrader in Sturgeon County, 40 kilometres northeast of Edmonton in Alberta's industrial heartland. The upgrader will initially process up to 170,000 b/d of bitumen from the Fort Hills mine into as much as 145,000 b/d of synthetic crude oil, pending regulatory approval. The crude will then be marketed for refining into consumer products such as gasoline and diesel. Subsequent phases could increase the total upgrader capacity to about 320,000 b/d of synthetic crude by 2015.

Fort Hills Energy Limited Partnership comprises Petro-Canada with 55% interest (Operator), UTS Energy with 30% interest and Teck Cominco with 15% interest. Fort Hills has in excess of 2.8 billion barrels of bitumen resource.

On the in-situ side, Petro-Canada is an industry leader with 7.3 billion barrels (net to Petro-Canada) of top quality resource. The existing MacKay River SAGD facility is currently being debottlenecked to produce up to 30,000 b/d. A MacKay River expansion is expected to produce an additional 40,000 b/d by 2010, pending regulatory and internal approval. The company also has top-notch leases in Meadow Creek and Lewis - both in the heart of the in situ "fairway."

"Experience matters in the SAGD business - that and a great resource," said Camarta. "We fully expect our MacKay River expansion to be the most competitive SAGD project in the business."

A major conversion investment at the Edmonton Refinery and a processing agreement at Suncor Energy will enable the refinery to process up to 55,000 b/d of MacKay River bitumen by 2008. The refinery conversion includes an expansion of the coking capacity to process bitumen and synthetic crude. Combined with Syncrude processing capability, these plans will convert Edmonton to a fully oil sands based refinery that will produce up to 135,000 b/d of ultra low sulphur gasoline, diesel and other refined products.

"Most important is that this integrated line-up - from the reservoir to the gas tank - has very attractive economics," noted Camarta. "The combination of a great resource and an existing refinery is hard to beat."

Petro-Canada continues to play a leading role in the development of oil sands technology. The Company's line up of current and pending in situ pilots includes:

• Vapex, in which propane solvent is used in place of steam to mobilize underground bitumen, thus eliminating natural gas use;
• Co-injection of steam and solvent, aimed at reducing steam consumption;
• And, a field project at MacKay River that's providing us with valuable data about reservoir performance and how steam behaves in interbedded mudstone.

"Based on the results to date, I believe we will find more energy efficient and environmentally sustainable ways to develop our in-situ leases going forward," said Camarta. Technologies involving reduced steam consumption also limit greenhouse gas emissions and exposure to volatile natural gas prices.

Petro-Canada's Investor Day presentations will be webcast live beginning at 8:15 am MDT and conclude at 2:00 pm MDT and made publicly available at 3:00 pm MDT on the website.

Petro-Canada is one of Canada's largest oil and gas companies, operating in both the upstream and the downstream sectors of the industry in Canada and internationally. The Company creates value by responsibly developing energy resources and providing world class petroleum products and services. Petro-Canada is proud to be a National Partner to the Vancouver 2010 Olympic and Paralympic Winter Games. Petro-Canada's common shares trade on the Toronto Stock Exchange under the symbol PCA and on the New York Stock Exchange under the symbol PCZ.

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For more information please contact:

Petro-Canada (Calgary)
Media and general inquiries:
Chris Dawson, Corporate Communications
(403) 296-4270
Email: corpcomm@petro-canada.ca
or
Petro-Canada (Calgary)
Media and general inquiries:
Michelle Harries, Corporate Communications
(403) 296-3648
Email: corpcomm@petro-canada.ca
or
Petro-Canada (Calgary)
Investor and analyst inquiries:
Gord Ritchie, Investor Relations
(403) 296-7691
Email: investor@petro-canada.ca
Website: www.petro-canada.ca

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