(All financial figures are approximate and in Canadian dollars unless
CALGARY, Oct. 23 /CNW/ - Suncor Energy Inc. announced today that its
Board of Directors has approved a $6 billion capital spending plan for 2009.
Approximately $3.6 billion in spending, or about 60% of the total, is targeted
to Suncor's Voyageur oil sands growth strategy.
"Following a thorough review in light of current financial market
conditions, we've modified our capital plans for 2009, reducing targeted
spending by more than a third" said Rick George, president and chief executive
officer. "Our aim is to ensure we are living within our means during a time of
market uncertainty, while also making the strategic spending decisions that
will allow us to continue on our growth path."
Suncor's 2009 plan maintains spending and construction timelines for the
third and fourth stages of the company's Firebag in-situ operations, part of
the $20.6 billion Voyageur strategy. Completion of Firebag stages 3 and 4 (in
2009 and 2010, respectively) is expected to provide increases in bitumen
production and future cash flow.
In the near-term, Suncor expects to scale down spending and the pace of
construction on the company's planned Voyageur upgrader, delaying targeted
completion by approximately one year. Stages five and six of Firebag in-situ
operations are expected to proceed but, as they are at relatively early phases
of development, spending and scheduling plans are flexible to respond to
"We remain committed to an integrated expansion strategy and targeted oil
sands production of 550,000 barrels per day," said George. "However, we've
always had options available to us in terms of how the expansion is rolled out
- and we believe in the current economic environment it's prudent to exercise
In addition to Voyageur program investment, Suncor plans 2009 capital
spending of $2.4 billion to support its base business. Approximately
$1.7 billion is targeted for the company's oil sands operations, including new
extraction facilities and various projects intended to improve the reliability
and productivity of oil sands assets. Continuing investments in emission
control equipment are also slated for 2009.
In Suncor's natural gas operations, plans call for spending of
approximately $300 million on exploration and production in 2009. In the
company's refining and marketing operations, approximately $400 million in
capital is slated for planned maintenance and environmental improvements.
Suncor expects similar levels of company-wide capital spending through
2012. 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 2009 capital spending plan is expected to be financed through
undrawn credit facilities and cash flow from operations.
This news release contains forward-looking statements that address goals,
expectations or projections about the future. These statements are not
guarantees of future performance and 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
Some of the forward-looking statements in this document may be identified
by words like "plan", "expected", "targeted", "continue, "aim", "may",
"impact" and similar expressions. These statements are not guarantees of
future performance. Readers are cautioned that actual results could differ
materially from those expressed or implied, 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.
For further information:
For further information: Media: Brad Bellows at (403) 269-8717;
Investors: John Rogers at (403) 269-8670