December 11, 2008 / 11:07 AM / 10 years ago

UPDATE 1-Petro-Canada sees 2009 spending down 36 pct

Dec 11 (Reuters) - Petro-Canada PCA.TO, Canada’s No. 4 oil exploration and production firm, expects to cut spending next year by 36 percent as it weathers falling oil prices and the economic turmoil.

The company, which last month delayed an investment decision for its Fort Hills oil sands mine and deferred an upgrader to cut the project’s C$21 billion pricetag, forecast capital spending of C$3.96 billion in 2009, down from the C$6.16 billion it expects to spend this year.

Petro-Canada’s budget includes C$2.1 billion for growth projects and C$1.34 billion for replacing reserves at its existing properties in Canada, the North Sea, and elsewhere.

Other spending plans include C$300 million for enhancing existing assets.

Canadian petroleum companies have been cutting back on spending plans for next year to cope with a shortage of inexpensive credit and oil prices that have fallen more than $100 a barrel since rising above $147 in July.

Petro-Canada said it expects 2009 oil and gas production to fall to a range between 360,000 and 395,000 barrels of oil equivalent per day, from its 2008 target of 400,000 to 420,000 boepd.

Petro-Canada shares closed up C$2.11 at C$29 Wednesday on the Toronto Stock Exchange. The shares have dropped 43 percent over the past 12 months, more than the 38 percent drop in the exchange’s benchmark index over the period. ($1=1.251 Canadian Dollar) (Reporting by Pratish Narayanan in Bangalore; Editing by Deepak Kannan)

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