Suncor aims to sell up to $3.8 billion in assets in 2010

By Jeffrey Jones

CALGARY, Alberta (Reuters) - Suncor Energy Inc (SU.TO: Quote) aims to jettison up to C$4 billion ($3.8 billion) in assets, including a third of its natural gas holdings, in 2010 as it looks to cut debt after its takeover of Petro-Canada, its chief executive said on Friday.

The sales by Canada's biggest oil company will reduce its overall production by 10 percent, but that will be made up quickly as Suncor embarks on new projects as industry conditions improve during the economic recovery, CEO Rick George said.

He made the remarks after Suncor, known for its dominance in northern Alberta's oil sands, reported a 64 percent drop in operating profit in its initial quarter with Petro-Canada operations integrated into its own, due to big drops in oil and natural gas prices.

Besides gas operations, Suncor will look to unload smaller interests in the North Sea, all of its assets in Trinidad and Tobago as well as a corporate aircraft.

"In total the target that we have is about C$2 billion to C$4 billion worth of asset sales. Most of that will take place in 2010," George told analysts.

He also said he is confident that the company will beat its post-takeover target of C$300 million in annual cost savings and C$1 billion in reduced capital spending.

Suncor plans to announce its 2010 budget next week. In it, it will outline its priorities for numerous projects that it and Petro-Canada had planned, such as the expansion of its Firebag steam-driven oil sands project and the Fort Hills oil sands mining proposal, both in northern Alberta.

George ruled out following ConocoPhillips (COP.N: Quote) and selling its 12 percent stake in the Syncrude Canada Ltd oil sands venture, which it acquired in the Petro-Canada deal.