(All financial figures are approximate and in Canadian dollars unless
CALGARY, Jan. 30 /CNW/ - Suncor Energy Inc. announced today that its
Board of Directors has approved the company's $7.5 billion capital spending
plans for 2008. Of this total, approximately $6 billion, or about 80% of the
total capital budget, is expected to be targeted to growth, primarily oil
sands projects. Approximately $1.5 billion is planned for sustaining existing
"This year marks a major ramp-up of capital spending directed toward our
goal of producing more than half a million barrels of oil per day," said Rick
George, president and chief executive officer. "As we increase growth
spending, we're also targeting a substantial increase to sustaining capital to
help ensure our operations are running safely and reliably and contributing to
a strong financial foundation over the coming years."
Suncor's growth capital budget is aimed at supporting the planned
expansion of in-situ bitumen production and the construction of a third
upgrader as part of the company's plans to increase oil sands production
capacity to 550,000 barrels per day (bpd) in 2012 (see separate news release
also issued today). The balance of growth spending is planned primarily for
completion of the expansion of production capacity to 350,000 bpd in 2008. The
growth budget also includes about $275 million to be spent in Suncor's natural
gas business to support the company's targeted production of 205 to
215 million cubic feet equivalent per day in 2008.
Of the planned $1.5 billion in sustaining capital, approximately
$1.2 billion is targeted for Suncor's oil sands operation, including
construction of the North Steepbank mine extension (which is expected to
replace bitumen from mined-out areas), a planned maintenance shutdown of
Upgrader 1 in the second quarter, and various projects intended to improve the
reliability and productivity of oil sands assets. Investments in emission
control equipment are also slated for 2008.
In Suncor's downstream operations, plans call for sustaining capital of
approximately $225 million to be spent in 2008, aimed at maintaining safe and
reliable operations following major growth projects at both the Sarnia,
Ontario refinery and the Commerce City, Colorado refinery during the past two
Suncor expects similar levels of company-wide capital spending over the
next several years. However, some projects, including components of Suncor's
planned in-situ expansion, are subject to regulatory approval and the outcome
may impact project details and related budgets.
Suncor's capital spending plan is expected to be financed through cash
flow from operations, credit facilities and access to debt capital markets.
This news release contains forward-looking statements that address goals,
expectations or projections about the future. These statements are based on
Suncor's current goals, expectations, estimates, projections and assumptions,
as well as its current budgets and plans for capital expenditures. Estimating
and budgeting for major capital projects is a process that involves
uncertainties and that evolves in stages, each with progressively more refined
data and a correspondingly narrower range of uncertainty. At very early
stages, when broad engineering design specifications are developed, the level
of uncertainty can result in price ranges with -30%/+50% (or similar levels)
of uncertainty. As project engineering progresses, vendor bids are studied,
goods and materials ordered and as the company moves closer to the build
stage, the level of uncertainty narrows. Generally, when projects receive
final Board of Directors approval, cost estimates have a range of uncertainty
that has narrowed to the -10%/+10% or similar range. These ranges establish an
expected high and low capital cost estimate for a project. When Suncor says
that a project is "on budget", it means Suncor still expects the final project
capital cost to fall within the current range of uncertainty for the project.
Even at this stage, the uncertainties in the estimating process and the impact
of future events, can and will cause actual results to differ, in some cases
materially, from our estimates. Some of the forward-looking statements in this
document may be identified by words like "plans", "expected", "targeted",
"help ensure", "intended" "goal", "aimed", "may" and similar expressions.
These statements are not guarantees of future performance. Actual results
could differ materially, as a result of factors, risks and uncertainties,
known and unknown, to which Suncor's business is subject. These could include:
changes in general economic, market and business conditions; fluctuations in
supply and demand for Suncor's products; fluctuations in commodity prices and
currency exchange rates; the impact of stakeholder consultation; the
regulatory process; technical issues; environmental issues; technological
capabilities; new legislation; actions by governmental authorities including
the imposition of taxes or changes to fees and royalties, the occurrence of
unexpected events; Suncor's capability to execute and implement its future
plans; and changes in current plans. Further discussion of the risks,
uncertainties and other factors that could affect these plans, and any actual
results, is included in Suncor's annual report to shareholders and other
documents filed with regulatory authorities.
Suncor Energy Inc. is an integrated energy company headquartered in
Calgary, Alberta. Suncor's oil sands business, located near Fort McMurray,
Alberta, extracts and upgrades oil sands and markets refinery feedstock and
diesel fuel, while operations throughout western Canada produce natural gas.
Suncor operates a refining and marketing business in Ontario with retail
distribution under the Sunoco brand. U.S.A. downstream assets include pipeline
and refining operations in Colorado and Wyoming and retail sales in the Denver
area under the Phillips 66(R) brand. Suncor's common shares (symbol: SU) are
listed on the Toronto and New York stock exchanges.
Suncor Energy (U.S.A.) Inc. is an authorized licensee of the
Phillips 66(R) brand and marks in the state of Colorado. Sunoco in Canada is
separate and unrelated to Sunoco in the United States, which is owned by
Sunoco, Inc. of Philadelphia.
For further information:
For further information: Media: Brad Bellows at (403) 269-8717;
Investors: John Rogers at (403) 269-8670