Suncor to go ahead with Fort Hills oil sand project, profit up

Thu Oct 31, 2013 12:06am EDT
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By Julie Gordon

VANCOUVER (Reuters) - Suncor Energy Inc (SU.TO: Quote), Canada's largest oil and gas company, said on Wednesday it was moving ahead with its Fort Hills oil sands project in Northern Alberta, with first production expected as soon as the fourth quarter of 2017.

The C$13.5 billion ($12.9 billion) project, located some 500 km (310 miles) north of Edmonton, Alberta, is a joint venture with France's Total SA (TOTF.PA: Quote) and diversified mining company Teck Resources Ltd TCKb.TO.

Suncor separately said its third-quarter profit rose 10 percent, boosted by record production from its Oil Sands segment and favorable pricing for western Canadian crude oil.

Net profit in the quarter was C$1.7 billion, or C$1.13 per share. That compares with earnings of C$1.5 billion, or C$1.01 per share, in the third quarter of 2012.

Operating profit, which excludes most one-time items, rose to C$1.4 billion, or 95 Canadian cents per share, up from C$1.3 billion, or 84 Canadian cents, in the year-ago quarter.

That beat the average analyst estimate of 87 Canadian cents per share, according to Thomson Reuters I/B/E/S.

Suncor's cash flow, a glimpse of its ability to pay for new projects like Fort Hills, fell 7 percent to C$2.5 billion, or C$1.69 per share, from C$2.7 billion, or C$1.79.

Production from the Calgary-based company's oil sands operations rose 16 percent to a record 396,400 barrels per day, while total output from its operations in North America, the North Sea and north Africa was 11 percent higher at 595,000 barrels of oil equivalent per day.   Continued...