Canada's Suncor Energy says to implement operating budget cuts in 2015

Wed Apr 1, 2015 10:35pm EDT
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April 1 (Reuters) - Canada's largest oil and gas company Suncor Energy Inc said on Wednesday that it expected to largely implement operating budget cuts of C$600 million ($476 million) to C$800 million in 2015, ahead of the previously projected two-year period.

The company had said in January that it would also cut about 1,000 jobs, freeze hiring and slash C$1 billion in capital spending in response to falling crude oil prices.

Several Canadian oil and gas producers have cut capital spending plans for 2015, following a sharp decline in oil prices since June.

Global benchmark Brent crude closed at $57.10 per barrel on Wednesday. Prices were just shy of $116 in June.

The reductions in operating budget will begin to be reflected in first quarter costs, Suncor said in a statement on Wednesday.

The Calgary-based company also said that the workforce reduction by about 1,000 employees and contractors was largely complete.

"Through the combination of deferring non-essential capital projects and working with suppliers and contractors to improve our capital efficiency, we've been able to significantly reduce our spending," Chief Executive Steve Williams said.

Suncor said it produced 598,000 barrels of oil equivalent per day (boepd), excluding production from Libya, in the first quarter ended March 31, up from 545,300 boepd a year earlier.

Production from the company's oil sands operations, the country's largest, averaged about 440,000 barrels per day (bpd), up from 389,300 bpd a year earlier. ($1 = 1.2607 Canadian dollars) (Reporting by Shubhankar Chakravorty in Bengaluru; Editing by Joseph Radford)