UPDATE 1-Suncor cuts spending, employees as oil prices plunge

Tue Jan 13, 2015 6:12pm EST
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(Adds details of spending cuts, investment manager comment)

By Nia Williams and Scott Haggett

CALGARY, Alberta Jan 13 (Reuters) - Canada's largest oil and gas company Suncor Energy Inc said on Tuesday it would cut about 1,000 employees and contractors, freeze hiring and slash C$1 billion (US$837 million) in capital spending in response to falling crude oil prices.

Suncor said it would also defer some capital projects that have not yet been sanctioned, such as MacKay River 2 in northern Alberta and the White Rose Extension offshore Atlantic Canada.

Production outlook for 2015 remained unchanged at 540,000 to 585,000 barrels per day.

"Today's cuts are consistent with our commitment to spend within our means and maintain a strong balance sheet," Suncor Chief Executive Steve Williams said in a statement.

"We will monitor the pricing environment and take further action as required."

Suncor's revision of its 2015 capital budget to between C$6.2 billion to C$6.8 million, from $7.2 billion to $7.8 billion when it was presented in November, brings it in line with other Canadian oil producers that have cut spending as oil prices fell.

Benchmark crude oil prices have fallen more than 50 percent since June in response to a global supply glut and producer group OPEC's refusal to cut production. U.S. crude fell to a near six-year low of $44.20 a barrel on Tuesday.   Continued...