UPDATE 1-Suncor delays new oil sands mine, upgrader "challenged"

Thu Nov 1, 2012 2:47pm EDT
 
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* Delays Fort Hills mine to 2017

* Holds off on Voyageur upgrader while costs reviewed

* Says rising light oil production challenges economics

* Shares up 3.6 pct

By Scott Haggett

CALGARY, Alberta, Nov 1 (Reuters) - Suncor Energy Inc said on Thursday that rising light oil production threatens the profitability of a massive new upgrading facility planned by Canada's dominant oil sands producer as it delayed plans to expand output from the world's third-largest oil reserve.

The company. Canada's No. 1 integrated oil producer and refiner, backed away from what had been a C$20.6 billion ($20.65 billion) plan to boost production from its oil sands operations, delaying a new mining project for at least one year and putting a target date to build North America's largest upgrading facility on hold while it works to squeeze costs from the project.

Steve Williams, who stepped in as chief executive officer in May following the retirement of founding CEO Rick George, had already warned that Suncor would focus on profits rather than growth.

On Thursday he put that plan into action, pushing back the start up of the Fort Hills oil sands mine by one year, to 2017, as Suncor and partners Total SA and Teck Resources Ltd look for ways to boost the profitability of the multi-billion dollar project.   Continued...