Canada's Suncor prepares oil sands growth as global majors exit
By Nia Williams
CALGARY, Alberta (Reuters) - Even as the world's largest energy companies exit Canada's high-cost oil sands the country's top producer Suncor Energy is lining up its next phase of growth in the world's third largest crude reserves.
The preliminary plans for new projects in remote northern Alberta follow a stream of multi-billion dollar deals in which international oil majors sold off oil sands assets to Canadian producers, who are betting technology and economies of scale will make the region competitive with other plays globally.
Suncor said on Monday it will file a regulatory application for its 160,000 barrel-per-day Lewis project later this year, and in March received approval for the 80,000 bpd Meadow Creek East plant. It also plans to file an application for the 40,000 bpd Meadow Creek West project later this year.
The company has not yet taken a final investment decision on any of the projects but if sanctioned they would boost the company's current output of 680,000-720,000 bpd by more than a third. In total, Canada produces around 4 million bpd.
Calgary-based Suncor cemented its position as the largest oil sands operator last year when it bought Canadian Oil Sands Ltd and Murphy Oil's stake in the giant Syncrude mining and upgrading project in two deals worth over C$5 billion ($3.66 billion).
Its strategy for future growth relies on building identical smaller thermal plants to help cut costs. This is how future development across the industry is expected to look, as the exit of the majors has drawn a line for now under the megaprojects that drove the industry's rapid expansion over the past 15 years.
Suncor will add new plants able to produce between 30,000-40,000 barrels per day every 12-18 months, chief executive Steve Williams said on a quarterly earnings call last month.
"We're working with contractors about how do we design this once and build it many times so we get that benefit of replication ... almost like a manufacturing plant," Williams said. Continued...