April 24, 2008 / 6:44 PM / 10 years ago

UPDATE 1-Suncor CEO says current oil prices unsustainable

(Adds details. In U.S. dollars unless noted)

CALGARY, Alberta, April 24 (Reuters) - Current oil prices above $115 a barrel are not sustainable over the long term, but the oil industry needs at least $75 a barrel to attract investment and bring on increasingly tougher to find reserves, Suncor Energy Inc’s (SU.TO) chief executive said on Thursday.

“To keep those new supplies coming on, which are going to be smaller and smaller, you’re going to need a good oil price. I just don’t think you’re going to need $115,” Suncor CEO Rick George told reporters after Suncor’s annual meeting.

He said the current floor price for the industry to operate could be in the $75-$80 a barrel range, although exact numbers are hard to estimate.

Suncor, best known as operator of Canada’s second largest oil sands mining and synthetic crude operations, has just started a C$20.6 billion ($20.2 billion) expansion that will lift production to 550,000 barrels a day by 2012 from 350,000 later this year.

The company does not formulate its plans expecting the sky-high prices to last, George said.

Today’s prices are driven by a combination of rising demand from n China, India and the Middle East, as well as output declines in Venezuela and Mexico, other key U.S. suppliers, he said.

U.S. crude was off $2.22 at $116.08 a barrel in New York late in Thursday’s session.

$1=$1.02 Canadian Reporting by Jeffrey Jones; editing by Rob Wilson

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