Suncor reaches into Total’s deep pockets
New deal will help fuel bitumen belt expansions
Suncor Energy Inc. is reaching into Total S.A.’s deep pockets to fuel its growing oil sands ambitions. The Calgary firm today signaled that it plans to increase production from its bitumen belt operations to more than one million barrels of oil equivalent per day by 2020. The growth target is based on annual increases of 10 per cent per year in the oil sands and company-wide production growth of about eight per cent per year.
The $1.8-billion deal with Total will see the two firms resume construction of the stalled Voyageur upgrader, plus build the Fort Hills and Josyln mines. The deal is still subject certain regulatory approvals and has a closing target date of early 2011. Suncor president Rick George called the arrangement an “importnat element” as the firm looks to double its oil sands output. “The deal brings a strong partner to the table, helping us to accelerate development of our growth portfolio and share in the capital investment in a third upgrader and development of new mining projects,” he said in a release.
“We see several strategic advantages in the partnership with Total,” George continued. “They will be able to access our technological expertise and 43 years of oil sands knowledge, while we will benefit from Total’s global operating experience. Together, we will be able to pool our manpower and capital resources and bring our collective strengths to bear to manage these projects using best-in-class operating practices.”
Other aspects of Suncor’s planned capital spending for the new year include continued development of Stages 3 through 6 of its Firebag in situ scheme. The MacKay River in situ project will also see further investments. Projected capital spending will reach $6.7 billion for the entire year. The total includes $2.8 billion towards oil sands operations and another $3.9 billion in spending to sustain current operations, including maintenance and the deployment of new tailings reclamation technology.