The company says the “budget incorporates flexibility to respond quickly to any further deterioration in market conditions,” adding, “Both capital and operating expenditures can be scaled back to ensure the company continues to live within its means.”
Suncor in January slashed its previously reported 2015 budget by $1 billion (Can.) and said it would reduce its workforce by 1,000 (OGJ Online, Jan. 14, 2015). The company also said it would trim $600-800 million in operating expenses over the next 2 years.
Growth projects in 2016 are slated to receive 55% of the spending program with a vast majority targeting the upstream segment.
“Our oil sands production is expected to be slightly reduced in 2016 vs. 2015 as a result of significant planned maintenance activities scheduled at various facilities, including our first 5-year full turnaround at the U2 upgrader and major maintenance at Firebag,” said Steve Williams, Suncor president and chief executive officer.
“We remain focused on achieving further reliability improvements across our operations,” he said. “And, we’ll continue to build upon the momentum gained in 2015 in reducing cash costs per barrel at our oil sands operations.”
Suncor in October made a $4.3-billion (Can.) bid for Canadian Oil Sand Ltd., which COS rejected (OGJ Online, Oct. 19, 2015). A month earlier, the company agreed to acquire 10% interest in the Fort Hills oil sands project from Total E&P Canada Ltd. for $310 million (Can.) (OGJ Online, Sept. 21, 2015).