Canada's largest energy company Suncor Energy Inc. (SU,SU.TO) said Friday that its board has approved the company's C$5.5 billion capital spending plans for the year 2010. The Calgary, Alberta-based company noted that about C$1.5 billion will be directed towards growth project funding, mainly at oil sands operations. The remaining C$4 billion is intended to support existing operations.
Rick George, president and chief executive officer said, "While we've seen some improvement in crude oil prices and the overall economy, we believe that a conservative capital strategy remains the best approach for Suncor. We're looking at a level of capital investment that is supportable entirely from free cash flow at mid-cycle crude oil prices."
According to the company, majority of growth spending will be directed towards the Firebag Stage 3 in-situ oil sands expansion, about 50% of which was completed before being deferred in early 2009. Suncor now expects to start production in the project in second quarter of 2011, with volumes then beginning to ramp up toward design capacity of nearly 68 thousand barrels per day or bpd of bitumen. Further, the company intends to fund Firebag Stage 4 to support a target of first bitumen production in the fourth quarter of 2012. Stage 4 also has a design capacity of 68,000 bpd, Suncor said. Suncor will also direct a portion of the capital to complete Millennium Naphtha Unit, which is planned to add value to the company's product slate and for the expansion of Suncor's St. Clair Ethanol Plant. In addition, International and East Coast Canada growth capital plans include commitments in Libya and investments planned to bring the Ebla gas field in Syria into production in the second quarter of 2010. According to the company, sustaining capital in the upstream portion of the business for 2010 includes investments in its planned Tailings Reduction Operations and maintenance plans at Oil Sands, Natural Gas and International and Offshore facilities. Suncor said it will focus spending in downstream operations, mainly on investments to improve environmental performance and planned maintenance work.
Suncor added that its 2010 and ongoing spending plans reflect expected synergies resulting from its merger with Petro-Canada in August. Earlier, the company had projected operating synergies at C$300 million per year, which are now expected to exceed that target. SU closed Thursday's regular trading at $34.42 on the NYSE, while SU.TO ended at C$36.44.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.