Canada’s Suncor Reports Loss, Slashes Expansion
Canada’s second-largest oil sands operator, Suncor Energy Inc., is blaming falling commodity prices for causing their first loss in 16 years which is forcing them to reduce their planned 2009 budget.
Suncor slashed its 2009 capital spending plans in half, to $3 billion from the $6 billion set late last year, which itself was reduced from a fore-casted $9 billion.
“The tail end of 2008 was a very tumultuous time in the financial and the commodity markets. In lots of ways, we’re more than glad to see 2008 in the rearview mirror,” Suncor Chief Executive Rick George said on a conference call.
The company is hoping that 2009 will usher in better market conditions for the company than 2008, whcih saw crude oil prices plummet more than $100 from their high of $147 per barrel.
“The reason we took the step to go to $3 billion is that we just don’t know . . . how long this trough lasts, when we’ll see the commodity cycle start moving back in and when we’ll see oil prices, for example, move back up,” George said.
The Calgary-based company said that its tar-sands oil operations have taken the hardest hit.
The energy company is winding down its Voyageur project, which would have added 200,000 barrels per day of new synthetic crude production by 2013.
“What you can expect from us is that we’ll no longer talk about Voyageur as a big, $20-billion project,” said George. “When we restart these, we’ll restart them one project at a time.”
Suncor, which also operates refineries in Ontario and Colorado, watched its shares drop $4.53, more than 20 percent, during trading on the New York Stock Exchange on Tuesday. Their shares have fallen more than well over 50 percent in the past year.