Suncor Says Oil Sands Becoming Increasingly Important
By Sonja Franklin and Doug Alexander
Oct. 7 (Bloomberg) -- Suncor Energy Inc. Chief Executive Officer Rick George said Alberta’s oil sands are increasingly important as a supplier of energy.
“As conventional oil worldwide becomes increasingly difficult to find, develop and more costly, the oil sands, the second-largest oil base in the world, will play a bigger and bigger role,” he said in a speech to the Economic Club of Canada in Toronto today.
Oil prices, currently above $69 a barrel, will probably not rise as high as $100 before the end of the year, he told reporters after his speech. They may range from $60 to $75 until the global economy recovers, he added. He said demand for energy from India and China in particular “remains relatively strong.”
Led by George, Calgary-based Suncor completed its C$19.2 billion ($18.1 billion) acquisition of Petro-Canada in August, the biggest takeover for a Canadian oil company ever.
Suncor has said it may shed natural-gas assets to focus on oil projects such as crude production from the tar sands and will save C$1 billion in capital spending and C$300 million in operational expenditures a year. Those savings may be even higher, George said today.
The company is cutting 1,000 jobs as part of the reorganization. Suncor has announced the planned divestiture of 104 gas stations in Ontario.
Big Reserves
About 42 percent of Suncor’s production comes from the oil sands, the world’s second-biggest crude reserves after Saudi Arabia’s. The tar-like sands are located about 750 kilometers (466 miles) north of Calgary. Output from the oil sands may almost double to 2.2 million barrels a day by 2015, the Canadian Association of Petroleum Producers estimates.
The purchase of Petro-Canada created a company that produces the equivalent of 710,000 barrels a day from the oil sands to fields in the North Sea and North Africa, processes crude at refineries in places like Montreal and Colorado and sells gasoline under the Petro-Canada and Sunoco brands.
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