Suncor shares sink after pullout from Syria

Mon Dec 12, 2011 1:35pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Suncor Energy Inc Chief Executive Rick George figured his investors were uneasy with the risks of new Middle East and North African operations when the company acquired Petro-Canada in 2009, and with Sunday's pullout from Syria that discomfort has been borne out a second time in less than a year.

Suncor shares sank 3 percent on Monday as investors weighed the Canadian company's retreat from a $1.2 billion Syrian gas project with no indication of any financial recourse. It came as Libyan operations recovered from a shutdown in that country early this year due to the civil war.

"I don't think it will be something where they will have any near-term recourse, so while sanctions are in place this will be offline and who knows how long that will be?" said Michael Dunn, an analyst with FirstEnergy Capital Corp.

Suncor shares were down 99 Canadian cents, or 3.4 percent, at C$28.86 on the Toronto Stock Exchange.

Before this year, some investors had speculated the Libyan and Syrian assets could be candidates for sales as their production and strategic value rose, especially after George singled them out as being outside Suncor's normal risk tolerance. But the uncertainty that had enveloped them as unrest grew in both countries squelched such talk.

Suncor said on Sunday it made the decision to declare force majeure for the Ebla field - essentially breaking contract terms due to uncontrollable circumstances - to comply with tough new European Union sanctions on Syria.

On Monday, as voting began in local elections in Syria, security forces battled pro-opposition army defectors in clashes that are starting to eclipse a campaign of peaceful protests against President Bashar-al Assad, raising fears that Syria is drifting into civil war.

Suncor, which is much better known for its sprawling oil sands operations in Alberta, said it is pulling out expatriate staff, though not providing numbers citing security reasons.   Continued...